Subscription Box Basics

Back To the Basics (6/6): Subscription Box Product Sourcing

August 28, 2023 Episode 177
Subscription Box Basics
Back To the Basics (6/6): Subscription Box Product Sourcing
Show Notes Transcript

Welcome to the Back to the Basics series! (6 of 6)

Head Coach Julie talks about the topic she gets asked about the most: product sourcing. In the first part of this episode, she shares specifically where and how she product source for Sparkle Hustle Grow. And then in the second part, she gives some pro tips on how to source the best items.

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Hey everybody. And welcome back to subscription box basics. This is your head coach, Julie. And today I'm wrapping up our six part back to the basics series. I hope you've been enjoying it. I sure have. We've talked about so many things during this series. Things like the subscription box model. And how you actually make money with it. I told you my launch story. We've talked about the language of the subscription box industry and last week. I helped you carve out your concept. Yes. We've talked about a lot already. If you've missed any of that, go back now, listen to those episodes. And today we're talking about product sourcing. This is one of the questions that I get more than anything. So I wanted to dedicate an episode to talk about product sourcing. In other words, where the heck do you get all the product that you put in the boxes? Spoiler, you don't walk into stores and buy from the shelves. There's another way to do it. And I'm going to talk about it. Where do you get your products? How do you find your products? So it's one of the most fun things about subscription boxes, you know, curating the product selection, but also one of the most time consuming and therefore challenging parts. In the first part of this episode, I'll share specifically where and how I product source. And then in the second part of the episode, I'll give you some pro tips on sourcing the best items. As a subscription box owner, a lot of thought needs to go into what items you're going to choose for each month. So with Sparkle Hustle Grow, I would start with a theme and then build products around that They always have to be pretty. Practical, good quality, cohesive, kind of in what purpose they serve, but also from a color standpoint, we want them to look good because that can really impact the unboxing experience. So I'm always asked, where do I do my sourcing? And I swear, I'm always on the lookout. So when I go shopping at Target or Staples, when websites of products that I've picked up along the way. The first place that I start sourcing products is at retail stores. When you're just out there shopping at places like Target, Walmart, Staples is a great place for office supplies. But if you carry toys and You get the point here. Go to stores that carry items that would make a good fit. So when I'm out shopping, if I see a product that I like in the store, I either buy one to use in my box as a mock up, or I take a picture of it so I can research it online. When I take that picture, I make sure that the product is in there, the retail price is showing, and then I usually turn it over, the product, I turn it over, and take a picture of right around the UPC code. Usually there's an item number, , but you'll also find a website or a brand name there, and that's where you can start your research. Another thing to think about, though, When you're looking at stores that are as large as Target and Staples is sometimes they have products that are custom made, like exclusively made for them. It might be a brand that sells all over the place online and in stores. You can find them everywhere, but they might have a partnership agreement with someone like Target to get an exclusive product. So keep that in mind as you pick up a product at a retail store. It may or may not be available for the general public or for like a reseller like yourself to purchase. The next place I find products for my subscription box is Amazon. I don't buy them there, but I research them there. Well, I take that back. I did buy some stuff from Amazon in my first few months because it was convenient. I didn't know any better, but I'll talk more about that later. Why I love Amazon though is because there are thousands and thousands of products in there. So you can really do some market research in there, find products that you might Not find in the retail stores or locally and even better you can read reviews on those products Before you commit to a product you can look at those reviews and see what good things and especially what bad things people are saying About that particular product. So if they say it breaks easily stay far far away from that product You do not want to put it in your box So Amazon is another place, and to be honest with you, you guys, the first, I don't know, a month or two, maybe three, I did buy some products from Amazon to put into my subscription box, and here's why. Amazon usually has lower than retail price, but they don't have a minimum. Like, they don't say you have to spend 250 to get that product. Whereas when you reach out to a wholesaler, A brand that's trying to sell you their product. Sometimes they have a minimum order level. Uh, in my experience, I've seen that minimum order be 250, sometimes even 500. When I first launched, I didn't need that many products because I was only shipping about 50 or so boxes. And so when I did look at places like Amazon or jet. com. I did that to get some good pricing and basically trying to have a lower cost to entry to the products that I wanted, knowing that eventually when I had more subscribers, I would easily be able to hit those minimum order levels to buy direct. The next place I find products for my subscription box is specialty shops. So specialty shops could be anything. They could be online, they could be in store, like a retail location. And what that really means is if you're looking for stationery, go to a stationery shop. If you're looking for party supplies. Go to a party supply store. Other places that are specialty shops would be something, in my opinion, like Etsy. So a lot of times you can just research on Etsy, maybe find some great handmade goods that would make a good fit for your subscription box. And then you could reach out to that Etsy merchant and ask them if they do wholesale or ask them if they do discounts on bulk orders. And if you remember from past episodes, a lot of times that wholesale price is going to be right around 50% off. So it's a great place to find some products for your subscription box. Just be aware that you always want to get a sample. Always, always, always get a sample of a product, especially something on Etsy, for example. You want to make sure that it is built well and that it's good quality and the packaging actually matches what was shown in the picture on the listing. So ask them for a sample to get in hand. to test the quality to make sure you really love the product and that it fits in your box and you want to buy more of them. The next place I find products are retail trade shows. So this is something different. You might not have ever been to a retail trade show, but I'll just give you a quick example. I went to a multi day event in New York city called the National Stationery Show. Yes, it's a thing and it's glorious. Imagine all of your favorite pen. Paper, stationery, and book vendors all in the same room, and it's free to browse. I hear the angels singing, but in all honesty, it really is an amazing show. We have so much fun at it, and by taking the time to go to that event. We got to meet hundreds of potential vendors that had stationery, they had office supplies, some of them did custom work where you could get your brand printed on things. They had all kinds of things like calendars, pens, paper, and it was all in one place for me and my team. We were literally giddy with excitement. So we spent the day walking around with my box in hand, yes, I carry that box around under my arm so people can see it, recognize it, we can test products in it to make sure they fit. So we spent the day walking around with the box, introducing ourselves to vendors in person, getting their catalogs, their business cards, and taking samples of their products, showing them what it would look like to be in the box. We liked having the box there, not only to make sure it fit, but also for the vendor to see the excitement of what it would look like to be a part of the Sparkle Hustle Grow box. Seeing that actual box makes such a difference. So I would encourage you to do some researching online to see what type of retail trade shows would be relevant to your industry. There's toy shows. There's a show for baby and kids called the ABC Kids Show. There's healthy food and natural foods expos. There's so many out there. You just need to find the ones that fit your industry and take the time to go to those events. Having everything in one place was not only super convenient, but it was so fun to share our journey on social media, so our audience could follow along, and they did. They were there for it. We'd post pics of products and let them vote. We shared behind the scenes. We shared pictures with some of our actual vendors. It really created quite a buzz in our community. Plus we walked away with so many contacts and we did business with so many people. And a little pro tip on this one is that a lot of times vendors at these shows, they get these trade shows or expos. have special deals if you order at the event. So if you go knowing your numbers, like how many you need for your next box, or the, you know, the next three boxes, you can go ready to purchase and you can likely get an even better deal than you could after the show or if you were just talking to them direct. The next place I find products for my subscription box is direct from the vendor. So remember when I was telling you that when I'm at retail stores, I either grab a product or, you know, buy it, take it home and take, or take pictures of it. Then I like to reach out directly to that vendor or to that brand. And here's exactly how I do it. The first thing I do after I take that product home or take pictures of it is I check their website and I look for wholesale information. This is specifically for the brand, not for the retail store. So not Target. com, but you would look at Poppin. com, for example, if I was looking to buy... Uh, product from Poppin that I got at Target. So if I go to their website, if I can't find their wholesale information, I'll look for contact forms or even maybe just reach out to the company via social media. And this is almost always what I start with. I'd say, Hi, I run a monthly subscription box for female entrepreneurs, and I'm interested in purchasing, then I put the product name, in bulk. Who can I speak to about wholesale pricing? And so that gets the conversation started. Super simple. One little sentence basically. Never go in guns blazing, asking for a free product. Don't do it. Especially when you are brand new, you just want to first get the attention of the sales team, and then you can provide them with details of your box. Whether it's through this couple of lines of text and an email, or maybe you send them a one page media kit, which I can talk about in another episode. So at this time, the conversation gets started, I like to let them know quantity, especially if it's a large number because that's going to get their attention. Also when I'm having those first kind of back and forth conversations with them, I'll let them know my need by date and the zip code of my warehouse or wherever your shipping address is so they can estimate shipping. It's really a lot easier than you would think just to get this conversation started and just again to get that contact name or a phone number so you can speak directly to someone specifically about your needs. And when I speak to vendors, I only consider a handful of items that are very specific to Sparkle Hustle Grow. Why? Because we have some limitations. For example, boxes are 6x9x3 inches. So if a product doesn't fit those dimensions, then I can't use it. And I don't want to waste their time or get a sample of a product that I can't use. So you want to make sure that you consider the actual product packaging as your considering these items. Once you have that conversation going with the vendor, you can ask things like if the product's going to come packed loose, or maybe with a poly bag, which is just like a clear plastic bag, or will it have retail packaging with a hang tag, or maybe it's in a box. You got to think about will the packaging design appeal to your audience? And it may seem kind of weird to consider this, but depending on where you're buying from, you need to make sure that the packaging is in the right language. No offense, but when all the writing on a product package is in another language, it can have a negative impact on the experience for my subscribers. They are sensitive to that. So it's just something else to think about. Uh, another thing you want to think about is will it fit the budget? So at this point in my business, I know real well what price ranges I can consider for my budget. And I keep that in mind when I'm asking about products, but I also share that number with vendors. I say, I'm looking for products in this price range. What do you have available? So you've got to know what's going to fit in your budget. You want to think about, is it good quality? You always want to get a sample in hand before buying, especially when buying in bulk. You get it before you commit to that bulk order. And what you can do is just ask that vendor if you're serious about purchasing from them. And once you kind of start establishing that relationship with them. You can ask them, can you please send me a sample? And a lot of times they'll send you that sample free of charge, but sometimes you're going to have to pay for it to get one in house. It is so important though, if it's a product you really want to include, you definitely need to get a sample one way or the other. You want to make sure that it's good quality. You want to make sure that product is up to your standards and that you can place that sample in a box mock up to see how well it fits, especially with the other products that you're sourcing. Both from a size perspective, so the box can actually shut, but also aesthetically, does it look good with the other products that you have sourced? You never want to be in a situation where a product physically doesn't fit. That's the worst. So if that means you carry a little measuring tape with you in your purse, when you go shopping, so you can measure products, so be it. If you're talking to vendors, ask them what the packaging size is, not just what the product size is. Another thing that I consider is, does it come in multiple colors? For example, , we prefered feminine colors. So like pinks, whites, turquoises, a lot of times we'll use metallics like golds and silvers, that type of thing. But I didn't typically put in, like, green items or gray items or items that just aren't as bright and colorful and inspiring. So I want to make sure that the product I choose comes in a color that we prefer. You will want to have that conversation. When you're speaking to your sales rep, because sometimes when you buy in bulk, they just assume that you will take the random color assortment that they offer on their website. But if you only want the pink ones, then you need to make sure that's clear and that there's no surprises when your package arrives. So we talked a little bit about things to consider, but let's go back to talking about places where I find products. The last place I find products for my subscription box is through distributors. And so a distributor is kind of like this middleman that sits in between the vendor and the buyer. They're kind of like this connector that sells on behalf of the brand. You'll find that a lot of large brands use distributors to sew Well, in my opinion, I think it's so they can have a further reach without having so much of that staff, that sales staff in house. They can just sell to the one distributor and then the distributor has the channels to get it out in all the retail outlets. And so I don't deal with distributors a whole lot. I don't, I found that I just don't need to, uh, there are some craft companies and office supply brands that I know. Post it, for example, in the past I've tried to buy Post its direct and they use distributors because I've tried to reach them and When I got information with phone numbers and email addresses, they said these are our distributors that we work with You'll want to speak directly with them to get your hands on our product So those are the places where I find products for my subscription box retail stores Amazon, specialty shops, and even places like Etsy, retail trade shows, directly from the brand or directly from the product maker, and then through distributors. Before you buy any products for your box, let's take a minute to talk about perceived value. I'd like to give you some tips on this because it's super important as part of the product sourcing process. Perceived value refers to the value that your subscriber perceives the product to be worth. It gets kind of tricky though, because you have to really think hard about this. So often people will buy on Amazon, and Amazon prices are typically less than the retail price. Less than what you would buy in store. And trust me when I say that if you include Target dollar spot items, or items from the dollar store, your audience will know. They shop those places too, right? So, unless you want that perceived value of it being a dollar spot box, just don't buy those items. Don't include them. Include things that are going to have a higher perceived value. So here's some things that can improve perceived value. Brand names. People love to be surprised with products from their favorite brands and aligning with those reputable brands helps. It helps you build your own brand's perception and reputation. Another thing to think about with perceived value is quality. Is the product cheap looking or is it built solid? You know, what is it made of? So if it's plastic, specifically white plastic, for example, does it feel solid or does it feel like really cheap plastic. You guys know what I'm talking about. You can tell when a product feels or looks cheap. Another thing that improves perceived value is size. So if a box is packed with lots of small items, it really can feel less valuable. So you want to choose products of different sizes and use filler like crinkle cut, for example, if needed to give the illusion of a more full box. And if you happen to have a lot of small items, add that extra filler, like crinkle cut, to the bottom of the box to make the box actually look more full when it's first opened. Don't just pile a bunch of crinkle cut on the top, put it on the bottom. And that can help improve perceived value if you do have a lot of small items. In general, I would suggest that you have a very good assortment of different sized items. Another thing that can improve perceived value is the weight of items. This one might seem strange at first, but if you think about it, sometimes a heavier item can feel more valuable. It may be heavier because it's made with higher quality materials, or maybe it's just a larger item in general. But for the most part, when you pick up a box, specifically a surprise box, like a subscription box, and it feels heavy, It gives us this perceived value of, wow, there's a lot in there, must be really good. So while we're talking about weight, there's another thing you have to think about though. You have to remember weight can play into your shipping costs depending on your carrier and depending on how you ship. For example, say you use U. S. Postal Service first class rates. The rate does vary based off of how heavy the item is. But if you use USPS cubic rate shipping at the time of this recording, you can fill that same box with as many items as you want. As long as it's under 20 pounds, it's still going to be the same shipping rate. So just something to think about when it comes. To the weight of the box and weight of items. Another thing that can improve perceived value is packaging of the product. Is it packaged in a box or does it have a bow or is it loose packed? Additional packaging can make the unboxing experience more fun. So when I first started I did buy some products that were in really boring packaging And then I repackaged them with labels or with bows or things like that just to make it a little bit more So, you know, make it look more valuable and make it a little more fun to see it and to open it. Now, just keep in mind, you don't want to get into a habit of repackaging a lot because as you scale, that is definitely going to become a challenge come packing week when you have to repackage a lot of smaller items before you can even put them in your box. So, just something to think about. Another thing to think about when it comes to perceived value is cohesiveness. Does your product variety look good together? Does it have a common theme? Themes, of course, are not a requirement, but it can definitely improve the perceived value because in photos and just, you know, as someone opens up the box and lays out all the products, if they do have that common theme, if they have similar color schemes, for example, even, it just looks better. And when something looks better, it has a higher perceived value. And lastly, I really believe that handwritten notes can bring a personal touch to the unboxing experience and help improve perceived value by making your brand more human. When I first launched Sparkle Hustle Grow in my first month, I included a handwritten note thanking them for being a founding member. And I remember seeing people post those all over social media about how much they loved that personal touch that nobody does that anymore. we can't write handwritten notes in every single month's box because of the quantity, but we did make sure to reach out with handwritten notes on other occasions. For example, if someone hits a certain milestone, or maybe they've been a subscriber for a year, or we found that they had a bad experience because of a previous product was broken, that merits a handwritten note. When we send that replacement product, sometimes we write that handwritten note and it will help improve the experience and ultimately improve the perceived value of your product. That's our entire box. Next, we're going to do an exercise to help you with your own product sourcing. On a piece of paper, I want you to brainstorm a list of dream items for your box, regardless of the cost. Regardless of the size, this is just an exercise to get it all out of your head and onto paper. Write down all the different items that you think your target audience would absolutely love to receive in their box. So later on, when you determine your box size, you're going to come back to this page and circle the items that would fit in your box dimensions and start researching those prices. And one more tip. As you're thinking about products and you're out shopping, if you see an item in store or online, remember that the standard wholesale pricing is usually about 50% off. So for example, if you see a product in store for 5, the wholesale price is pretty likely going to be about 2. 50. So that should give you a good guide as you determine your box price. And then as you start mocking up your boxes and determining what products you're going to carry. Thank you. That's going to help you. If you need a refresher on how the wholesale pricing model works, go back to the third episode in this series on how to make money with a subscription box business.. Okay, let's recap. Since we went over so much, we covered all the places where I research and buy products . And we talked about how to approach new vendors. And I gave you some tips. Well, that's a wrap. The back to the basic series is now concluded. Again, if you've missed any of the other episodes, feel free to go back, review them, listen to them anytime you want. It's this has been helpful for you. Please take a minute to rate and review this podcast. That is one of the main ways people find us. Other than if you would share it with a friend which we'd be ever so grateful, the other way people find us is through ratings and reviews. Now if after listening to this back to the basic series, you are hooked. And you are so ready to launch that subscription box business idea of yours, and you just don't know where to start. We have more resources. Obviously you can listen to other episodes in this podcast. We have been putting out a new episode every week for a couple years now. So there's plenty to listen to. But if you just want the roadmap, you're just like, just tell me what to do. Then I invite you to learn more about subscription box bootcamp, which is our course and community. That walks you through every step of launching your very own subscription box. We've got tools, templates, the support you need, and it comes with a private community of other people in the same business in this a lot of times in the same stage as you. That you can lean on. You can make box besties and you can just ask questions in a safe space. You can find more details about subscription box You'll find the links in the show notes. And then you just click through to learn more about bootcamp, or you can start with our free on demand training. That's where a lot of people start because they want to walk through more of the basics and get a little bit of mindset training before they dive head first. So you can get that free on demand forward slash launch. Again, that will be in the show notes, guys. Thank you so much for listening to today's episode for this entire series, and we hope that we're able to help support you through your own subscription box journey. You can continue to join me at the podcast. Along with my co-host Renee, your subscription box marketing coach. Right here or in any podcast player that you like. Thanks for listening today and we'll see you in the next episode Bye.