05 part 2: Do's and Don'ts of shipping Subscription Boxes from the USA to Canada and internationally

:: 00:10:10

Hey everybody, welcome back to part two, episode five.

:: 00:14:01

Focused on subscription boxes with our special guest, John Haji.

:: 00:17:10

Thanks so much for listening. Enjoy.

:: 00:19:13

There's a lot of facets of logistics

:: 00:21:09

that play into the post-purchase experience

:: 00:23:08

that are very important to hone in on.

:: 00:26:05

Awesome.

:: 00:26:12

Those are those are great points. I agree.

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You know, our, our job as a, as a partner

:: 00:31:15

to a lot of these brands in the

subscription box space is to,

:: 00:36:12

you know, obviously, you know,

we can talk about this is what we do,

:: 00:39:08

but when it comes down to it is we want to

help create a great customer experience.

:: 00:44:04

We want to help eliminate as much churn

as absolutely possible.

:: 00:47:09

You know, surrounding the delivery

experience for, you know, your box.

:: 00:51:12

Right.

:: 00:52:01

So I think of, you know, let's think of

a skincare brand.

:: 00:55:08

Right.

:: 00:56:02

And how important it is

that if you're on this 30 day

:: 00:58:15

continuity program where you're

going to run out of supplies,

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that, making sure that your deliveries

come at a very regular cadence,

:: 01:06:10

it's fulfilled at a very similar time

and also delivered in a very similar timeframe.

:: 01:11:00

How important that is to make sure

:: 01:12:04

that you're not losing subscribers,

you know, something like that situation,

:: 01:16:09

Especially on a

:: 01:17:10

you made a really good point there too

as well, especially on products that are,

:: 01:21:03

you know, depletable products

like you want to adhere to a schedule,

:: 01:25:02

where this product is arriving

every 30 days.

:: 01:28:02

It's I think the experience

is even more important versus

:: 01:31:11

a subscription box that is providing some level

like discovery and delight on a product

:: 01:35:10

where maybe it's not so, so much of a

of a need versus like, a want.

:: 01:40:02

But for those, those subscription box

companies that have products of

:: 01:43:15

that are more of a need.

:: 01:45:04

You know, it's really,

really important to kind of,

:: 01:48:02

just strengthen

:: 01:50:15

the experience so that the cadence

that they're expecting is, is on par.

:: 01:56:07

Absolutely.

:: 01:57:04

The other thing that I have found is

you talked about,

:: 02:01:00

you know, milestone tracking updates,

consistent tracking updates.

:: 02:03:11

So with customer experience comes in.

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And just as the market shifted from,

you know, if we look at pre-COVID

:: 02:10:07

to, let's call it post-COVID,

you know, the amount of,

:: 02:14:06

you know, shippers that have transitioned

or are working to transition from a,

:: 02:17:08

you know, a DDU delivery method

to a DDP delivery method, right?

:: 02:21:01

And there are a specific set of challenges

with a subscription box

:: 02:25:03

because of the high SKU count,

typically in each individual order.

:: 02:28:06

So, that can create a challenge

:: 02:31:12

for some shippers.

:: 02:34:14

and again, the purpose of this podcast

is more educational.

:: 02:37:13

Right?

:: 02:38:00

But it's for the purpose

of conversation too.

:: 02:40:15

I have to be able to speak to certain

networks, and that includes our network.

:: 02:44:11

Right.

:: 02:44:15

So I look at what we do, even since,

since we stopped

:: 02:48:09

with, with G box, but we launched our own

Canadian delivery network, right.

:: 02:52:01

It's it's completely DDP delivery network.

:: 02:54:01

We now facilities in Mississauga,

Calgary, and Vancouver.

:: 02:57:02

And what our team, though

:: 02:58:03

our Canadian team is able to do

is to get a pre set list of,

:: 03:02:04

you know, not ingredients, but SKUs really

you know of what's inside of each box.

:: 03:07:11

They can categorize them

and they can, you know,

:: 03:10:00

classify everything and do it

ahead of time before the actual packages

:: 03:13:09

are getting to the border

to help with a seamless clearance process.

:: 03:16:09

So there's no delays in that way.

:: 03:18:07

But also to be able to say,

hey, we we can't, you know,

:: 03:21:03

we can't do this, you know, aerosol

or we can't do whatever that might be.

:: 03:25:09

And I'm saying all this

to lead it back to, and again,

:: 03:29:04

this is not tooting my own horn,

but it's so important for a brand to,

:: 03:33:11

it's better than a horse reference

that we've had in the last two episodes.

:: 03:36:07

Not that he’s tooting his own horn.

:: 03:37:06

Okay. All right, so.

:: 03:38:13

But it's. Go ahead. Go on. Please. Go on.

:: 03:41:07

Cut that one out right there. Yeah.

:: 03:42:12

So it's better though.

:: 03:45:03

It's it's so important

:: 03:46:02

and vital to work with work

with a partner in the logistics space.

:: 03:50:04

I think that genuinely cares

and is knowledgeable about these things.

:: 03:52:15

To be able to really help,

you know, again, we're going to

:: 03:55:05

we're going to work to make sure

that you have a good experience.

:: 03:57:07

We're going to help

to eliminate as much churn as possible,

:: 03:59:14

keep that customer as long as possible

by us being a partner to your business.

:: 04:04:02

and that's where that comes in.

:: 04:06:06

And I think, you know,

just for the sake of time,

:: 04:09:13

I want to talk to you a little bit about

what you see in terms of differences,

:: 04:13:01

with people that make decisions

surrounding logistics

:: 04:16:07

when it comes to for subscription

box space, you know, let's say a start up,

:: 04:19:13

maybe a mid-market level,

and then an enterprise level.

:: 04:22:15

you know, box company

and what that may look like,

:: 04:27:14

Kind of their thought processes, decision

making when going internationally?

:: 04:31:11

Yes. Yeah.

:: 04:33:10

I think on the startup side of things,

:: 04:36:10

they're very much thinking,

let me just get my feet wet and,

:: 04:41:07

and churn it out.

Yeah, that's right.

:: 04:42:08

That's, that's their typical...

It’s about survival,

:: 04:44:13

and let's make it happen.

Yeah.

:: 04:46:10

Yeah, and honestly the advice there too

is because you touched on it is

:: 04:51:10

no one really should be entering

internationally unless they've done their,

:: 04:55:14

unless they've done

like rigorous research on

:: 04:59:01

shipping internationally when it comes

to like costs, the products inside,

:: 05:02:14

Right.

:: 05:03:01

Like while the box for a lot of folks

is one single SKU,

:: 05:07:13

there are multiple different SKUs

within that box and multiple different

:: 05:11:09

products within the box that have

:: 05:13:06

different, maybe harmonization codes,

and there's different rules

:: 05:16:05

and regulations around

the different products inside that box.

:: 05:18:06

So before anybody enters

in internationally,

:: 05:21:03

even as a startup,

they should be researching that.

:: 05:23:02

But I think startups are

always just thinking,

:: 05:24:15

let me just get into international,

:: 05:27:03

once they start to get to that mid-level

range, and even in the enterprise, it's

:: 05:31:08

it's very easy on the

operations side of things.

:: 05:33:08

And I was very guilty of doing this.

:: 05:34:13

I don't want to use the word guilty

in a negative way.

:: 05:37:04

Is that like we're always looking at,

you know, cut costs somewhere

:: 05:40:13

and finding the best carrier

who's going to help us cut costs but also

:: 05:43:15

deliver on transit times, who's

also going to understand the subscription

:: 05:48:06

industry to help us mitigate

these risk of when these boxes

:: 05:52:01

are coming over the border.

:: 05:54:10

So, mid-level and enterprise I,

:: 05:57:00

I'm going to package them

together because I think

:: 05:59:05

they're always thinking about that.

:: 06:00:15

Right. It's, it's the costs.

:: 06:03:11

It's well, I'm experiencing issues

with, with our packages.

:: 06:08:13

Maybe the costs are fine,

but when they're coming into the country,

:: 06:11:07

they're not moving as quickly

or we're coming up where

:: 06:15:04

we're having issues at the border.

:: 06:16:13

And so finding the right partner who's

going to help mitigate all those risks

:: 06:20:11

and who understands the industry,

:: 06:22:12

and understands

the nuances of a subscription box,

:: 06:26:11

is going to come into play

for a lot of those, those brands.

:: 06:30:12

Yeah.

:: 06:31:08

Go ahead.

So that's a great point.

:: 06:34:03

I had a... I wanted to ask your opinion.

:: 06:36:02

So you've been doing this

a long time, obviously.

:: 06:38:09

The clients’ behavior

or anything or their customers,

:: 06:41:15

what has changed your opinion

from when this first started out,

:: 06:44:14

when you were in the beginning is

what has changed in the market, in your opinion?

:: 06:49:00

Anything? Any kind of buying

behaviors has changed?

:: 06:51:14

Cause I... when I was at UPS,

we had a lot of these companies,

:: 06:55:05

and in some the cadence

was the first to the fifth,

:: 07:00:04

they would ship.

:: 07:00:15

Then the other group would ship

the eight to the 10th and whatever, and

:: 07:05:14

but during COVID,

it kind of slid a little bit

:: 07:08:11

because the transit expectations

were longer. Right?

:: 07:11:02

And that was a tough time

for subscription boxes.

:: 07:13:00

But it was good.

A lot of people were home.

:: 07:15:02

But I'm just curious, what,

in your opinion, has changed? Anything?

:: 07:17:14

In the market of what

the expectation in this sub space?

:: 07:21:03

Yeah.

:: 07:21:08

Well, you know,

:: 07:23:03

I think there's a lot of things

that there's a couple different thing

:: 07:26:01

that changes, you know,

where it was very much

:: 07:30:00

the subscription box space,

at least when we started off,

:: 07:32:09

it seemed like there were

more boxes out there

:: 07:34:05

that were all about discovery

and delight of different products.

:: 07:37:14

And they would have

this, you know, bulk renewal,

:: 07:41:02

has shifted to

:: 07:42:11

especially when COVID hit, it was,

you know, everyone, everyone

:: 07:46:10

didn't realize how many subscriptions

A. they had to begin with.

:: 07:49:13

Everyone always says they have like four...

Exactly, exactly.

:: 07:52:04

...four subscriptions.

I have a friend of mine has eight of them. Eight!

:: 07:54:08

She has eight of them.

Yeah.

:: 07:56:00

Yeah.

That's a lot of money a month.

:: 07:58:00

Yeah, right.

Right Sharvon?

:: 07:59:04

Nah, I'm just kidding.

:: 07:59:11

Yeah, it's it's it's crazy

when people kind of back

:: 08:03:03

into their finances and realize

how many actual subscriptions they have.

:: 08:06:12

So then they start to, to cut back at,

:: 08:08:12

okay, which ones do I keep,

which ones I don't.

:: 08:10:09

And I think the ones that

were more of a

:: 08:13:10

need stayed, versus the ones that

were just kind of a want,

:: 08:18:04

so, you know, I'm subscribed

to a couple of subscriptions.

:: 08:22:10

One is an air filter for my,

for my AC system.

:: 08:26:15

Every three months I get a filter sent to my...

You’re living...

:: 08:29:13

You're living that husband and dad life.

:: 08:31:09

Okay, you got to take care...

I don’t have to jump in my car,

:: 08:32:15

I don't have to go to the local Home Depot.

:: 08:34:07

and grab an air filter.

:: 08:35:15

But that's something that you need

to replace every single month.

:: 08:38:04

Right.

:: 08:39:11

And, you know, no one thinks about those,

those subscriptions, but,

:: 08:42:15

you know, there's been a shift in the type

of subscription that you purchase, ones

:: 08:47:06

that are maybe a little bit

more of a, of a need than a want.

:: 08:50:11

And then also has shifted

a lot in subscription box

:: 08:54:05

companies is the ability

to offer the consumer this flexibility

:: 09:00:01

to manage their subscription

with a little bit more autonomy.

:: 09:03:07

Right.

:: 09:03:10

So making it easier for them

to log into their accounts,

:: 09:06:12

if they don't want the box this month

to put it on hold, pause it, skip a month.

:: 09:12:02

giving them the kind of

the flexibility to say,

:: 09:16:01

you know, you don't have

to subscribe this month.

:: 09:18:11

And that kind of actually helps

increase the LTV on the consumer

:: 09:22:14

because they don't have to

they don't think that, okay,

:: 09:24:13

I have to go through this

daunting process of canceling right now

:: 09:27:06

because they've given me this flexibility

of just pausing it this month.

:: 09:30:13

And you're more likely to save

that customer by offering the flexibility

:: 09:33:14

to manage their subscription

with a little bit more autonomy.

:: 09:37:08

And that's something that we're seeing

more with subscriptions as well.

:: 09:41:00

So you... that's a good point

because it's mostly apparel, right?

:: 09:44:08

Like I know a couple of large...

Could be skincare, could be apparel.

:: 09:47:14

You can go in and pause.

A couple of large ones...

:: 09:49:13

Typically what will happen is

you'll get a notification,

:: 09:52:03

it'll say, hey, we're preparing your box

or we're doing something like that,

:: 09:55:02

you know, limit, you know,

want to modify any changes.

:: 09:58:03

You can go in and you can change.

:: 09:59:09

Very cool functionality.

:: 10:00:07

So John, I know we're

getting close on time.

:: 10:02:01

We are?

:: 10:03:12

JW, we are.

:: 10:04:01

So so let's we're going to bring it

home here. So here we go.

:: 10:06:12

So a couple things I wanted to share,

some statistics for the listeners out there.

:: 10:10:14

I know you know I love dropping a little knowledge.

Here we go.

:: 10:12:15

No, in the last podcast we put out

or maybe the one before that

:: 10:16:07

I can't keep track.

:: 10:17:07

But John, think about these

numbers real quick.

:: 10:19:11

The UK

:: 10:21:15

e-commerce market in

:: 10:23:00

2023 is valued at $169 billion.

:: 10:26:10

Canada valued at $44 billion.

:: 10:30:03

Australia sits at about $45 billion.

:: 10:33:08

Okay, so we're looking at,

:: 10:37:03

just a tremendous amount of money there.

:: 10:38:11

You're not going to add it up?

:: 10:39:07

But no, no, no,

I'm not going to add that up right now.

:: 10:41:00

But...what I want to...

Did you say UK at 169?

:: 10:43:08

UK at 169 and Canada at 44?

:: 10:46:15

Yes. Canada's ninth largest...

Canada's ninth largest e-commerce market.

:: 10:50:07

UK is the third largest.

:: 10:51:13

It's China, US, UK.

:: 10:54:03

And then there's country... because we

:: 10:56:15

one of the podcasts we recorded

previously focused on Canada, UK, Australia.

:: 11:00:09

So that's why I'm talking about these.

:: 11:01:15

And as Asendia USA,

our our largest export countries,

:: 11:05:10

for our business is Canada, Australia, UK.

:: 11:08:06

And that's why we're focusing on them.

Yeah. So, but for us,

:: 11:13:05

as an organization, our largest partner

for export is Canada.

:: 11:16:12

And that's what we focus on more.

But anyway, let's

:: 11:18:15

so, shifting over here real quick,

:: 11:22:01

if you can give us two minutes,

I just want to know,

:: 11:24:08

I think probably for my

own personal knowledge is,

:: 11:26:12

what are a couple bullet points,

biggest challenges facing subscription

:: 11:30:14

box companies just going into this year

or throughout this year?

:: 11:35:08

I know I'm hitting you

with the good stuff.

:: 11:38:13

As it's related to logistics or as a whole?

No, just in general.

:: 11:42:14

In general.

I would say growth strategy. Right?

:: 11:45:00

I mean, you know, it's

running business, right?

:: 11:47:13

Yeah.

:: 11:48:01

One...the one and two punch that everyone is always

focusing on is acquisition and retention.

:: 11:53:01

So how do we better acquire customers?

:: 11:54:15

And especially since

:: 11:57:04

sometimes, you know, paid

media could be such a volatile market,

:: 12:00:06

one day you acquire a customer at $10

one day or acquiring a customer at $100.

:: 12:04:02

So it's making sure that

on the acquisition side of things, you're

:: 12:07:04

balancing it well enough across

a diversified set of channels

:: 12:11:08

to acquire customers

and lower your cost to acquire them.

:: 12:14:05

That's always been a challenge.

:: 12:15:13

A lot of folks are,

a lot of merchants are always focusing on.

:: 12:19:05

And then, of course,

you know, retaining them.

:: 12:22:07

You know, when acquisition is so volatile

and costs are through the roof,

:: 12:26:10

you have this, this loyal customer

base, who,

:: 12:29:05

who are who's already purchased from you,

who's already engaged with you.

:: 12:33:07

And so you want to make sure

that you're nurturing those relationships

:: 12:36:11

and providing an amazing experience

even after the fact, because those are

:: 12:40:05

the ones who know your brand, who have

been loyal supporters of your brand.

:: 12:44:09

So it's focusing on how to

better retain them

:: 12:47:10

and just enhance the experience for them

as they are part of your community

:: 12:52:02

and your brand for as long as they are,

because of course that increases LTV.

:: 12:56:02

So, those are probably the two one

and two things to focus

:: 12:59:01

is on a better acquire customers,

:: 13:00:09

but then also, once you do, it's making

sure that you're retaining them,

:: 13:04:07

to increase LTV and just nurturing them

and creating a better experience for them.

:: 13:09:02

Okay.

Hey John. Hey John. Two questions.

:: 13:11:12

What do you think's acceptable churn?

:: 13:14:08

Percentage?

:: 13:15:13

In your opinion.

:: 13:18:12

Six... 6 to 8%.

:: 13:21:05

Wow. That's pretty good.

:: 13:22:03

And then the thing... what's the

average length of a sub box

:: 13:26:05

keeps the customer?

LTV?

:: 13:28:04

Yeah.

Lifetime Value.

:: 13:29:05

Yeah, how long? *cough* Sorry.

:: 13:32:10

Great question.

:: 13:33:04

And obviously I think it varies depending

on the industry the actual box is in.

:: 13:38:12

Right.

:: 13:39:01

You're going to see again going back to

products that are depleteable and replenishable.

:: 13:42:15

I bet the consumer that is subscribed

to Dollar Shave Club

:: 13:45:12

or Harry's Razor has a much greater LTV

and they've received many more boxes

:: 13:50:15

than let's say a Gentleman's Box,

because after so many months

:: 13:55:11

you can love the socks

and the ties in the box,

:: 13:57:15

but your sock drawer

gets full, right?

:: 14:00:04

Not this guy. Never quit.

:: 14:01:12

Never quit.

:: 14:02:04

Not Nick. Nick was our...

So what do you think about...

:: 14:05:00

Nick was our...

:: 14:05:08

What do you go, him? No, no.

:: 14:07:04

Come on.

Nick was a subscriber for years.

:: 14:10:00

Right?

Years!

:: 14:11:01

Years.

A lot of socks my friend.

:: 14:12:03

He was an outlier.

I’m surprised you didn’t change your strategy then, why...

:: 14:14:04

Yeah he was...he was an outlier.

He’s afraid of me.

:: 14:16:15

And then you have any of the subscription

box that are monthly versus quarterly.

:: 14:20:09

So. Right.

:: 14:21:09

The the box count,

the LTV count is much different.

:: 14:23:14

And then there's

pricing that plays into it as well

:: 14:26:01

where some boxes are $9.99

all the way to $159.

:: 14:29:02

So there's obviously, a lot of different

factors that play into it.

:: 14:32:03

But I would say

:: 14:34:07

kind of general rule of thumb for anybody

that has a subscription box

:: 14:38:01

and is looking to generate high LTV

on their subscription box,

:: 14:42:02

it's about thinking about those products

:: 14:44:02

that are going to fall

into this kind of category of,

:: 14:47:04

you know, continuity

where you need to get it more and more.

:: 14:49:09

You're going to see that the consumer

is going to stay on much longer

:: 14:52:09

with those type of products

:: 14:53:12

than something that is more of like,

you know, a discover and delight product.

:: 14:58:00

And if you are a discover

and delight product,

:: 14:59:11

make sure you're focusing on delivering

an amazing experience, building an awesome

:: 15:03:07

community, engaging with the person.

:: 15:05:02

And that's going to help kind of offset

and create better LTV for them.

:: 15:09:01

Okay. All right.

:: 15:10:00

Well, this has been fantastic.

:: 15:11:12

I want to highlight...

Are you cutting him off?

:: 15:13:06

Well he's got to go to a meeting,

I'm sure.

:: 15:15:13

So we've got the sign behind him

:: 15:17:11

that for the show that that he has been

running and started and founded for years.

:: 15:23:01

SubSummit in Dallas,

th,: 2024

:: 15:27:06

Be there. Don't miss it.

:: 15:29:06

And then I just want to thank you,

John, for your time.

:: 15:31:05

We both do, to talk today

to today's listeners about the

:: 15:34:05

do’s and don'ts of shipping

subscription boxes internationally.

:: 15:36:08

We went on an adventure, a journey.

We talked a lot about just holistic industry stuff.

:: 15:40:13

But thank you so much for your time.

:: 15:42:15

Yeah. John, Nick,

thank you so much for having me on

:: 15:44:10

and allowing me to share my knowledge.