G-M9STG7821V Shipping Subscription Boxes from the USA to Canada and internationally - Outside the Box with Asendia USA

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Published on:

22nd May 2024

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

Our special guest, John Haji, Co-founder and Head of Partnerships, SubSummit, discusses the growth areas in the physical box space, subscribe and save functions, eliminating the churn rate surrounding the delivery experience and more!

About John Haji:

John is a subscription guru and a serial entrepreneur with a decade's worth of experience in the subscription space. He co-founded SubSummit, the first and only conference devoted exclusively to those who work in or alongside the subscription commerce industry. SubSummit connects today's industry leaders, innovators, and partners who are driving the rapid evolution of how consumers discover, buy, and experience new products.

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Transcript
::

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

::

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

::

Thanks so much for listening. Enjoy.

::

There's a lot of facets of logistics

::

that play into the post-purchase experience

::

that are very important to hone in on.

::

Awesome.

::

Those are those are great points. I agree.

::

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

::

to a lot of these brands in the

subscription box space is to,

::

you know, obviously, you know,

we can talk about this is what we do,

::

but when it comes down to it is we want to

help create a great customer experience.

::

We want to help eliminate as much churn

as absolutely possible.

::

You know, surrounding the delivery

experience for, you know, your box.

::

Right.

::

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

a skincare brand.

::

Right.

::

And how important it is

that if you're on this 30 day

::

continuity program where you're

going to run out of supplies,

::

that, making sure that your deliveries

come at a very regular cadence,

::

it's fulfilled at a very similar time

and also delivered in a very similar timeframe.

::

How important that is to make sure

::

that you're not losing subscribers,

you know, something like that situation,

::

Especially on a

::

you made a really good point there too

as well, especially on products that are,

::

you know, depletable products

like you want to adhere to a schedule,

::

where this product is arriving

every 30 days.

::

It's I think the experience

is even more important versus

::

a subscription box that is providing some level

like discovery and delight on a product

::

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

of a need versus like, a want.

::

But for those, those subscription box

companies that have products of

::

that are more of a need.

::

You know, it's really,

really important to kind of,

::

just strengthen

::

the experience so that the cadence

that they're expecting is, is on par.

::

Absolutely.

::

The other thing that I have found is

you talked about,

::

you know, milestone tracking updates,

consistent tracking updates.

::

So with customer experience comes in.

::

And just as the market shifted from,

you know, if we look at pre-COVID

::

to, let's call it post-COVID,

you know, the amount of,

::

you know, shippers that have transitioned

or are working to transition from a,

::

you know, a DDU delivery method

to a DDP delivery method, right?

::

And there are a specific set of challenges

with a subscription box

::

because of the high SKU count,

typically in each individual order.

::

So, that can create a challenge

::

for some shippers.

::

and again, the purpose of this podcast

is more educational.

::

Right?

::

But it's for the purpose

of conversation too.

::

I have to be able to speak to certain

networks, and that includes our network.

::

Right.

::

So I look at what we do, even since,

since we stopped

::

with, with G box, but we launched our own

Canadian delivery network, right.

::

It's it's completely DDP delivery network.

::

We now facilities in Mississauga,

Calgary, and Vancouver.

::

And what our team, though

::

our Canadian team is able to do

is to get a pre set list of,

::

you know, not ingredients, but SKUs really

you know of what's inside of each box.

::

They can categorize them

and they can, you know,

::

classify everything and do it

ahead of time before the actual packages

::

are getting to the border

to help with a seamless clearance process.

::

So there's no delays in that way.

::

But also to be able to say,

hey, we we can't, you know,

::

we can't do this, you know, aerosol

or we can't do whatever that might be.

::

And I'm saying all this

to lead it back to, and again,

::

this is not tooting my own horn,

but it's so important for a brand to,

::

it's better than a horse reference

that we've had in the last two episodes.

::

Not that he’s tooting his own horn.

::

Okay. All right, so.

::

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

::

Cut that one out right there. Yeah.

::

So it's better though.

::

It's it's so important

::

and vital to work with work

with a partner in the logistics space.

::

I think that genuinely cares

and is knowledgeable about these things.

::

To be able to really help,

you know, again, we're going to

::

we're going to work to make sure

that you have a good experience.

::

We're going to help

to eliminate as much churn as possible,

::

keep that customer as long as possible

by us being a partner to your business.

::

and that's where that comes in.

::

And I think, you know,

just for the sake of time,

::

I want to talk to you a little bit about

what you see in terms of differences,

::

with people that make decisions

surrounding logistics

::

when it comes to for subscription

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

::

maybe a mid-market level,

and then an enterprise level.

::

you know, box company

and what that may look like,

::

Kind of their thought processes, decision

making when going internationally?

::

Yes. Yeah.

::

I think on the startup side of things,

::

they're very much thinking,

let me just get my feet wet and,

::

and churn it out.

Yeah, that's right.

::

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

It’s about survival,

::

and let's make it happen.

Yeah.

::

Yeah, and honestly the advice there too

is because you touched on it is

::

no one really should be entering

internationally unless they've done their,

::

unless they've done

like rigorous research on

::

shipping internationally when it comes

to like costs, the products inside,

::

Right.

::

Like while the box for a lot of folks

is one single SKU,

::

there are multiple different SKUs

within that box and multiple different

::

products within the box that have

::

different, maybe harmonization codes,

and there's different rules

::

and regulations around

the different products inside that box.

::

So before anybody enters

in internationally,

::

even as a startup,

they should be researching that.

::

But I think startups are

always just thinking,

::

let me just get into international,

::

once they start to get to that mid-level

range, and even in the enterprise, it's

::

it's very easy on the

operations side of things.

::

And I was very guilty of doing this.

::

I don't want to use the word guilty

in a negative way.

::

Is that like we're always looking at,

you know, cut costs somewhere

::

and finding the best carrier

who's going to help us cut costs but also

::

deliver on transit times, who's

also going to understand the subscription

::

industry to help us mitigate

these risk of when these boxes

::

are coming over the border.

::

So, mid-level and enterprise I,

::

I'm going to package them

together because I think

::

they're always thinking about that.

::

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

::

It's well, I'm experiencing issues

with, with our packages.

::

Maybe the costs are fine,

but when they're coming into the country,

::

they're not moving as quickly

or we're coming up where

::

we're having issues at the border.

::

And so finding the right partner who's

going to help mitigate all those risks

::

and who understands the industry,

::

and understands

the nuances of a subscription box,

::

is going to come into play

for a lot of those, those brands.

::

Yeah.

::

Go ahead.

So that's a great point.

::

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

::

So you've been doing this

a long time, obviously.

::

The clients’ behavior

or anything or their customers,

::

what has changed your opinion

from when this first started out,

::

when you were in the beginning is

what has changed in the market, in your opinion?

::

Anything? Any kind of buying

behaviors has changed?

::

Cause I... when I was at UPS,

we had a lot of these companies,

::

and in some the cadence

was the first to the fifth,

::

they would ship.

::

Then the other group would ship

the eight to the 10th and whatever, and

::

but during COVID,

it kind of slid a little bit

::

because the transit expectations

were longer. Right?

::

And that was a tough time

for subscription boxes.

::

But it was good.

A lot of people were home.

::

But I'm just curious, what,

in your opinion, has changed? Anything?

::

In the market of what

the expectation in this sub space?

::

Yeah.

::

Well, you know,

::

I think there's a lot of things

that there's a couple different thing

::

that changes, you know,

where it was very much

::

the subscription box space,

at least when we started off,

::

it seemed like there were

more boxes out there

::

that were all about discovery

and delight of different products.

::

And they would have

this, you know, bulk renewal,

::

has shifted to

::

especially when COVID hit, it was,

you know, everyone, everyone

::

didn't realize how many subscriptions

A. they had to begin with.

::

Everyone always says they have like four...

Exactly, exactly.

::

...four subscriptions.

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

::

She has eight of them.

Yeah.

::

Yeah.

That's a lot of money a month.

::

Yeah, right.

Right Sharvon?

::

Nah, I'm just kidding.

::

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

when people kind of back

::

into their finances and realize

how many actual subscriptions they have.

::

So then they start to, to cut back at,

::

okay, which ones do I keep,

which ones I don't.

::

And I think the ones that

were more of a

::

need stayed, versus the ones that

were just kind of a want,

::

so, you know, I'm subscribed

to a couple of subscriptions.

::

One is an air filter for my,

for my AC system.

::

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

You’re living...

::

You're living that husband and dad life.

::

Okay, you got to take care...

I don’t have to jump in my car,

::

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

::

and grab an air filter.

::

But that's something that you need

to replace every single month.

::

Right.

::

And, you know, no one thinks about those,

those subscriptions, but,

::

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

of subscription that you purchase, ones

::

that are maybe a little bit

more of a, of a need than a want.

::

And then also has shifted

a lot in subscription box

::

companies is the ability

to offer the consumer this flexibility

::

to manage their subscription

with a little bit more autonomy.

::

Right.

::

So making it easier for them

to log into their accounts,

::

if they don't want the box this month

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

::

giving them the kind of

the flexibility to say,

::

you know, you don't have

to subscribe this month.

::

And that kind of actually helps

increase the LTV on the consumer

::

because they don't have to

they don't think that, okay,

::

I have to go through this

daunting process of canceling right now

::

because they've given me this flexibility

of just pausing it this month.

::

And you're more likely to save

that customer by offering the flexibility

::

to manage their subscription

with a little bit more autonomy.

::

And that's something that we're seeing

more with subscriptions as well.

::

So you... that's a good point

because it's mostly apparel, right?

::

Like I know a couple of large...

Could be skincare, could be apparel.

::

You can go in and pause.

A couple of large ones...

::

Typically what will happen is

you'll get a notification,

::

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

or we're doing something like that,

::

you know, limit, you know,

want to modify any changes.

::

You can go in and you can change.

::

Very cool functionality.

::

So John, I know we're

getting close on time.

::

We are?

::

JW, we are.

::

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

home here. So here we go.

::

So a couple things I wanted to share,

some statistics for the listeners out there.

::

I know you know I love dropping a little knowledge.

Here we go.

::

No, in the last podcast we put out

or maybe the one before that

::

I can't keep track.

::

But John, think about these

numbers real quick.

::

The UK

::

e-commerce market in

::

2023 is valued at $169 billion.

::

Canada valued at $44 billion.

::

Australia sits at about $45 billion.

::

Okay, so we're looking at,

::

just a tremendous amount of money there.

::

You're not going to add it up?

::

But no, no, no,

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

::

But...what I want to...

Did you say UK at 169?

::

UK at 169 and Canada at 44?

::

Yes. Canada's ninth largest...

Canada's ninth largest e-commerce market.

::

UK is the third largest.

::

It's China, US, UK.

::

And then there's country... because we

::

one of the podcasts we recorded

previously focused on Canada, UK, Australia.

::

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

::

And as Asendia USA,

our our largest export countries,

::

for our business is Canada, Australia, UK.

::

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

Yeah. So, but for us,

::

as an organization, our largest partner

for export is Canada.

::

And that's what we focus on more.

But anyway, let's

::

so, shifting over here real quick,

::

if you can give us two minutes,

I just want to know,

::

I think probably for my

own personal knowledge is,

::

what are a couple bullet points,

biggest challenges facing subscription

::

box companies just going into this year

or throughout this year?

::

I know I'm hitting you

with the good stuff.

::

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

No, just in general.

::

In general.

I would say growth strategy. Right?

::

I mean, you know, it's

running business, right?

::

Yeah.

::

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

focusing on is acquisition and retention.

::

So how do we better acquire customers?

::

And especially since

::

sometimes, you know, paid

media could be such a volatile market,

::

one day you acquire a customer at $10

one day or acquiring a customer at $100.

::

So it's making sure that

on the acquisition side of things, you're

::

balancing it well enough across

a diversified set of channels

::

to acquire customers

and lower your cost to acquire them.

::

That's always been a challenge.

::

A lot of folks are,

a lot of merchants are always focusing on.

::

And then, of course,

you know, retaining them.

::

You know, when acquisition is so volatile

and costs are through the roof,

::

you have this, this loyal customer

base, who,

::

who are who's already purchased from you,

who's already engaged with you.

::

And so you want to make sure

that you're nurturing those relationships

::

and providing an amazing experience

even after the fact, because those are

::

the ones who know your brand, who have

been loyal supporters of your brand.

::

So it's focusing on how to

better retain them

::

and just enhance the experience for them

as they are part of your community

::

and your brand for as long as they are,

because of course that increases LTV.

::

So, those are probably the two one

and two things to focus

::

is on a better acquire customers,

::

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

sure that you're retaining them,

::

to increase LTV and just nurturing them

and creating a better experience for them.

::

Okay.

Hey John. Hey John. Two questions.

::

What do you think's acceptable churn?

::

Percentage?

::

In your opinion.

::

Six... 6 to 8%.

::

Wow. That's pretty good.

::

And then the thing... what's the

average length of a sub box

::

keeps the customer?

LTV?

::

Yeah.

Lifetime Value.

::

Yeah, how long? *cough* Sorry.

::

Great question.

::

And obviously I think it varies depending

on the industry the actual box is in.

::

Right.

::

You're going to see again going back to

products that are depleteable and replenishable.

::

I bet the consumer that is subscribed

to Dollar Shave Club

::

or Harry's Razor has a much greater LTV

and they've received many more boxes

::

than let's say a Gentleman's Box,

because after so many months

::

you can love the socks

and the ties in the box,

::

but your sock drawer

gets full, right?

::

Not this guy. Never quit.

::

Never quit.

::

Not Nick. Nick was our...

So what do you think about...

::

Nick was our...

::

What do you go, him? No, no.

::

Come on.

Nick was a subscriber for years.

::

Right?

Years!

::

Years.

A lot of socks my friend.

::

He was an outlier.

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

::

Yeah he was...he was an outlier.

He’s afraid of me.

::

And then you have any of the subscription

box that are monthly versus quarterly.

::

So. Right.

::

The the box count,

the LTV count is much different.

::

And then there's

pricing that plays into it as well

::

where some boxes are $9.99

all the way to $159.

::

So there's obviously, a lot of different

factors that play into it.

::

But I would say

::

kind of general rule of thumb for anybody

that has a subscription box

::

and is looking to generate high LTV

on their subscription box,

::

it's about thinking about those products

::

that are going to fall

into this kind of category of,

::

you know, continuity

where you need to get it more and more.

::

You're going to see that the consumer

is going to stay on much longer

::

with those type of products

::

than something that is more of like,

you know, a discover and delight product.

::

And if you are a discover

and delight product,

::

make sure you're focusing on delivering

an amazing experience, building an awesome

::

community, engaging with the person.

::

And that's going to help kind of offset

and create better LTV for them.

::

Okay. All right.

::

Well, this has been fantastic.

::

I want to highlight...

Are you cutting him off?

::

Well he's got to go to a meeting,

I'm sure.

::

So we've got the sign behind him

::

that for the show that that he has been

running and started and founded for years.

::

SubSummit in Dallas,

th,:

::

Be there. Don't miss it.

::

And then I just want to thank you,

John, for your time.

::

We both do, to talk today

to today's listeners about the

::

do’s and don'ts of shipping

subscription boxes internationally.

::

We went on an adventure, a journey.

We talked a lot about just holistic industry stuff.

::

But thank you so much for your time.

::

Yeah. John, Nick,

thank you so much for having me on

::

and allowing me to share my knowledge.

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About the Podcast

Outside the Box with Asendia USA
e-Commerce, Logistics, and Sustainability best practices
Are you an online retailer shipping packages internationally? "Outside the Box" is Asendia USA's podcast educating US-based e-tailers on international shipping topics and how they can expand their global e-commerce footprint.

• Are you struggling with navigating international customs clearance?
• Want to learn how to reduce your global shipping costs?
• Need to improve your transit times for a better shopper experience?
• Interested in learning about online shopper behavior in other countries?

Then this podcast is for you!

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About your hosts

John Walsh

Profile picture for John Walsh
John Walsh, Vice President of Sales at Asendia USA, oversees the growth of our e-PAQ Elite DPD international shipping solution. With more than 40 years of e-commerce industry experience, John was previously the Vice President of Business Development for UPS Mail Innovations. His expertise in sales, marketing, and operations makes John a valuable industry expert in international and domestic e-commerce shipping.

Nick Agnetti

Profile picture for Nick Agnetti
Nick Agnetti, Enterprise Sales Executive at Asendia USA, has over a decade of e-commerce industry experience helping top-tier online retailers, marketplace sellers, and subscription box companies convert their international traffic into actual sales and repeat customers. His background in sales, business development, and logistics establishes Nick as a reputable voice in the international e-commerce logistics arena.