Subscription Box Answers

Warehouse or Fulfillment Center? My Perspective. (We have done both)

• Liam Brennan

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When we started BusterBox, we moved into our first office space/warehouse immediately. It didn’t take long before we outgrew that space and had to move again. Soon after, we outgrew the new space too and relocated to a much bigger warehouse.

Then Brexit hit, and we were forced to transition to using a fulfillment center.

In this episode, I share my perspective after experiencing both options. A big question I often see in the subscription box space is: What’s the better option – managing your own warehouse or using a fulfillment center?

Both options can work, but I personally much prefer using a fulfillment center.

If you’re at the stage where you’re wondering what the next move for your subscription box business should be, I highly recommend checking out this episode.

And if you have a question you want answered on the show, head over to www.SubscriptionBoxResources.com, join the free Facebook group, and post your question there."**

Speaker 1:

Welcome to Subscription Box Answers with your host, liam Brennan. You're no rubbish, no crap. Straight to the point podcast with real, actionable tips, real strategies and insights from the industry which will help you start and grow your own successful subscription box business. You ask the questions, you ask the questions, you ask the questions. Liam gives the answers. It's as simple as that.

Speaker 2:

Welcome back to a brand new episode of Subscription Box Answers. I hope you're having a really good day. On today's episode, we are discussing fulfillment centers versus warehouses and what is the better option. Now, I'm doing this because we are coming into 2025 and a lot of people will be thinking what is the next step for my business? Should I go to a fulfillment center? Should I lease a warehouse? What is the next step to push forward now for us in BusterBox, we have been in a few different warehouses and we've used a few different fulfillment centers. So what I'm going to do is I'm just going to share our experience with this and hopefully you can learn from it. Okay, because we've been doing this for a long time. We've experienced both sides of fulfillment.

Speaker 2:

Now, the first point is right. If you've just set up your business and you're growing and you're still packing boxes in your house, that's absolutely great. But you will reach a point where you will want to move out of your house, unless you have a lot of space around your house, like, if, a big basement or a big garage or something and in that case, great, because you're going to save money if you don't have to move out of there. But for those that do need to move out, let me explain what happened with us. Okay, so we obviously set up our business the end of 2015, but our first boxes went out in 2016 and we got a small office slash packing space pretty much immediately. Okay, and the reason why we did that was there was one big supplier in Ireland who would not work with us unless we had our own office slash packing space. They said they're not going to be driving trucks down like residential areas and taking pallets out and bringing them into somebody's house. There just wouldn't be room and they don't operate like that. So we went out and we got a packing space slash office straight away. Now, this was small. Okay, this was small.

Speaker 2:

We were still working full-time at this point, but after work, every day, we would drive down to our new office slash packing space and we'd do some work and we'd pack some boxes and we thought it was great at the time because it felt like we actually had a real company. This was actually before we were even generating revenue, but thankfully, we started generating revenue pretty, pretty quickly. It quickly became a nightmare in this space because our packing space were up these really tight stairs and it was really difficult to get products up and down the stairs. So we never stayed in this place for very long. We moved to a different office slash packing space, and this this was much nicer way, way nicer. It was bigger, it was in a nicer area, it was quicker to get there from our houses and it was just a better place.

Speaker 2:

Now at this point we were actually full-time in our company. Okay, we, the Traverse, had moved full-time into the company. We had no other, but we were going to this office slash packing space every single day and working there. Now we kept growing so very quickly. We outgrew this new office and this new packing space. There's actually a picture of me in there and there's just boxes everywhere, literally everywhere. You couldn't move in the place and it was a decent enough size out the back of it, but we just outgrew it. Now, thankfully, we became friends with our neighbor who had a bigger office slash packing space beside us and he actually allowed us to use some of his space to pack and we were very lucky, because if he never allowed us to do that, I don't know what we would do. We would have outgrown our new office really, really quickly and we were in a lease, so it wasn't ideal Now having the use of our own packing space and some of his packing space. It did us for a while, but then we reached the point where we outgrew all of that again and it was getting really, really tight.

Speaker 2:

I remember one christmas down there. You literally could not move in the place. You literally could not move. There was boxes everywhere, there was hampers everywhere, there was people everywhere trying to pack up all the orders. It was crazy down there, absolutely crazy.

Speaker 2:

Very shortly after that we moved warehouse again. We had to, we had no choice, and our neighbor asked us to go with him. We were going to get this really, really big warehouse. It had loads of space, there was an office upstairs for us, there was an office downstairs for him, there was loads of packing space and it was going to do us. So we moved with him into another warehouse. This warehouse did us a while. It was a big place, working around the clock. The company kept growing.

Speaker 2:

Before we knew it we were running out of space in this new warehouse as well and this was a big, big place. But again it was crazy. I remember another Christmas and it was just completely mental down there Boxes everywhere, hampers everywhere, people everywhere packing things up, trying to clear out rubbish, trying to make space. It was just crazy. So we quickly identified that we could add more space onto this warehouse. So we paid for a second floor to be added so that will give us a good bit more room to pack our boxes and store our stuff. And this gave us a bit of breathing space for a small bit more room to pack our boxes and store our stuff. And this gave us a bit of breathing space for a small bit of time. But guess what happened? Then? We outgrew it again and there was literally no room in this warehouse literally no room whatsoever. So, lucky for us, there was an empty warehouse literally across the road and we got permission to store some of our stuff in the empty warehouse across the road and we had to do that. There was just so many products, so many boxes, literally no room.

Speaker 2:

Now, as you can see, there's a common theme here, right? We kept outgrowing our warehouses. Now, it's a very good problem to have. I'm not going to lie, it's brilliant when your company is growing. It's definitely a really good problem. But it's challenging too If you keep outgrowing your space, especially if you're getting into leases like it's time consuming and expensive to keep moving as well. It takes some time to keep setting up new warehouses.

Speaker 2:

Now some people may be thinking why don't you just move into a gigantic warehouse at the very start? Now the truth about that is it's not very realistic. If you're a new business, right, you're not going to send your overheads up through the roof to move into this gigantic space, unless you've raised literally a ridiculous amount of money. You're just simply not going to do that because you're going to have very high bills and you're probably going to lock yourself into a lease in this place and it's just not realistic or the right thing to do financially.

Speaker 2:

But look after all of this happened. Very shortly after all of this happened, brexit came into play. Now, anybody who is in business and is in the uk exporting or whatever they know that this has been a complete nightmare. Okay, and everybody felt some pain because of this and I'm not going to get into it too much. But basically we had to move to a fulfillment center in the UK ASAP, otherwise we would have had some issues. So we moved to a fulfillment center. Now, up until this point, we were never really thinking about using a fulfillment center. It came up but we weren't really thinking about it seriously. We were happy enough in our warehouse, even though we were quite stressed out because we kept outgrowing all of these places, we were quite happy. Moving to a fulfillment center, I would say, has been a complete game changer for our business. It saved us so much time.

Speaker 2:

Now I'm going to touch on a few different things here. Right, when you're running your own warehouse right and you're doing your own packet. Right and you're doing your own packing, you have to manage the staff okay. You have to have insurance. You have to have health and safety training in place. You may need to find casual workers. That is not always easy to do. When you get to a certain size. There's going to be trucks pulling up packed with pallets and you're going to need a forklift to take them pallets down. We had to buy a forklift. That's expensive and we have to have somebody there at all times who knew how to operate the forklift to take the pallets down.

Speaker 2:

You need to worry about getting rid of rubbish out of your warehouse and if you've a lot of products coming all the time, that can build up very quickly and it's time consuming. Getting rid of it, all of this stuff is very time consuming. Making space in your warehouse, having a system in place to make sure the boxes have been packed as quickly as possible and as efficiently as possible all this stuff is time consuming and if you have one shipment day every month like a big shipment day, it's crazy. Down there around that time of month it can be absolutely crazy. Now don't get me wrong. It's very exciting, especially when you're new to business and you're seeing your company grow in. It's great, it really is.

Speaker 2:

But after a while you want to free yourself up to work on your business and not work in your business. Work on your business and not work in your business. And in my experience, running a warehouse and organizing your own fulfillment means you're spending a lot of time working in the business. Even though you may not be packing the boxes yourself. There is still a lot of other things that need to be done all the time. Like I said, people being managed and all the other stuff that I covered. So it really can take up a lot of time.

Speaker 2:

Now we've been in a fulfillment center for a number of years now. We've used two different fulfillment centers and, like I said, it's freed up a lot of time for us and I don't think I'd ever want to go back Now. As far as cost goes, there's really not that much difference, but you just end up with way more free time which you can use to work on growing your business and make more money that way. Now, a lot of the time when subscription box owners are discussing fulfillment centers, they're like oh, it won't work for me because we've this going on, we've that going on, we've this going on. I don't really believe that is the case.

Speaker 2:

If you find a good fulfillment center, it can definitely work for you. Like in my business, we have so many different things going on, so many different kinds of boxes and special requests, because we have a dog toy and treat box. We get so many different people reaching out to us saying oh, he doesn't like this, he doesn't like grain free food, he's allergic to this, he doesn't like chicken, he doesn't like these kind of toys, needs strong, chiller toys, blah, blah. We get a lot of people reaching out to us and we have to service those requests, otherwise those customers will cancel and we'll have a really, really high churn rate. So we do service as many requests as we possibly can, and our fulfillment center does it for us now, and I actually don't think I've ever come across a subscription box business well, I can't think off the top of my head of one anyway that has more special requests than my own company and the dog toy and treat niche.

Speaker 2:

So yeah, I think if you can find a good fulfillment center, it can. It can definitely save you a lot of time and it will definitely be able to handle whatever you need it to handle. Now, depending on your platform, you may be able to connect your fulfillment center directly and they'll be able to just pull your orders. I know that's possible with Shopify and some fulfillment centers with subli as well, and, worst case scenario, if your fulfillment center doesn't plug in, you can just pull csv files and send over the order files. We've done that in the past and it works fine. That's just my story.

Speaker 2:

Okay, I'm not getting into any recommendations about fulfillment centers or anything. There's a few different fulfillment companies in the subscription box resources group, so feel free to post in there and ask for recommendations and I'm sure some companies that have used these fulfillment centers will get back to you and tell you if they're any use. Now, the majority of subscription box owners I know who have moved to a fulfilment centre say they're much better off as well. So, yeah, I just wanted to share that perspective, wanted to share that story of how it has gone for us, because we've done it all. We've been in multiple warehouses and we've used multiple fulfillment centers.

Speaker 2:

So I hope this episode helps you, especially as we go into 2025 and you're probably looking to push on with your business and you may be looking to make some changes Now. We'll be back next week at the exact same time as always. If you have a question you want answered on the show, head over to subscriptionboxresourcescom, join the free Facebook group and post your question there. And if I could ask you a big favor, if you've been listening to this for a while and you've got value from the episodes and you feel like you've learned something, would you mind giving me a review on Apple, spotify or wherever you listen to this podcast? It just helps me get it out to more people. Thanks very much and chat to you next week. Bye-bye.