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Hello, everybody.

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Welcome back to another episode of

“Outside the Box with Asendia USA”

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with my co-host, John Walsh.

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Hello Hello.

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Hello. We've got a very special guest

today by the name of John Haji.

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John, you want to say hi real quick,

and then I'll talk a little bit about you.

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Yeah, yeah.

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Thank you so much.

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Hey, everyone. How's everyone doing?

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We're doing good.

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Thank you.

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Yeah, thanks for asking. Yeah.

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Thank you. So. Okay, everybody.

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It's a very special day today.

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Today's topic is,

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the do's and don'ts of shipping

subscription boxes internationally.

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John is an absolute expert about it.

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And I want to give you a little background of

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why we have John Haji on our podcast.

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So John is a subscription guru

and a serial entrepreneur

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with a decade's worth of experience

in the subscription space.

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He co-founded SubSummit,

and which is the first and only conference

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devoted exclusively

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to those who work in or alongside

the subscription commerce industry.

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So SubSummit connects, today's industry

leaders, innovators, partners

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who are driving the rapid evolution

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of how consumers discover,

buy, and experience new products.

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His background, and he and I go a long way back,

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but his background and think tanks,

paired with his entrepreneurial

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spirit has positioned him for success

within the subscription industry.

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John has a serious passion

for creative thinking, strategy,

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design, e-commerce, and more,

and he also co-founded

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and served as president of Gentleman's

Box, the first premier subscription

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service for men, for which, yours truly

was a subscriber for quite some time.

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I still have a large number of ties and socks.

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I rarely wear ties anymore,

so if anybody's interested,

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please leave a comment,

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or submit an inquiry to the

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contact us today.

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Now, I did change this part of the bio

because it's an important highlight.

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But as a husband and father of two,

John balances his professional

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and personal life with grace and humor.

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He has been recognized by Crain's Detroit

as one of the 40 Under 40 Award

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recipients in 2019 for his outstanding

achievements and contributions.

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Man, that was quite the bio.

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When’s the Nobel Prize coming, my man.

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When is the Nobel Prize coming?

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Was this self promoted?

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You know, I mean. Who wrote this?

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I yeah, who wrote that bio?

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Was it Crain's maybe.

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I don't I don't know who wrote.

That was amazing.

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Wow wee. So...

Do you have one like that?

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But hey...

Glad to hear that you're still

you still have some Gentleman's Box items

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you know, shuffling around the house somewhere.

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They’re there for sure.

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Oh... He didn't say where, John.

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I know there's probably, you know, the

junk drawer of his kitchen or something.

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Who knows?

Sharvon could probably edit this...

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So Nickson pulled a watch

out of the drawer the other day

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and he goes, “Dad, where did you get this from?”

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And I said “that was a Gentleman's Box watch.”

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And he goes “I miss that box.”

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And I was like, “yeah, I know, buddy,

it's been a while, but I know.”

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Okay, so...

I remember you sending me

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videos of your kids opening that box,

and that was really nice,

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Christmas time.

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You remember by the tree?

You regifted your kids the sub box?

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It was advertisement for it.

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Oh, come on.

He can use it for advertising.

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Oh, I had really cute kids.

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I still have cute kids, but they changed.

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Know what I mean?

He was an ambassador.

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There was an affiliate link there.

An ambassador.

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It was pro-bono too, unfortunately.

All right.

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So, John is a fantastic resource.

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And so, you know, for the listeners out

there, what we focus on is really helping,

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you know, again, the online retailers,

subscription box companies, marketplace

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sellers, 3PLs, if you will,

really help them when it comes

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to navigating the e-commerce,

cross-border parcel delivery landscape.

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So again,

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I'm going to just

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go back to we're going to talk today

about the do's and don'ts of shipping

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subscription boxes internationally.

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So so we've got John Haji, John Walsh.

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So I'm going to say John.

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And I'm going to figure out

how to navigate that... JW.

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JW. So... There you go.

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JW and I were looking today, John,

at some really interesting statistics.

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So just get your feedback

on what you're seeing out there.

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But I want to start with this number here

that we discovered today

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that the subscription box market ending

2023 is an approximate $33 billion market.

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I mean, I remember the first SubSummit.

It’s still growing.

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I mean, it's it's insane.

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So tell us a little bit about that.

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What what growth areas do you see in the

the subscription, the physical box space?

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I don't really want to spend

any time today on digital, if that's okay.

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Talk more about the box market,

in particular.

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Yeah.

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I mean, look, it

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almost seems like there's a subscription

box out there for everything.

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Sponges, toilet paper,

men's fashion accessories.

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the the food and beverage space

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seems to be a space that is growing

exponentially year over year.

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I think what you'll find

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in the subscription box space is anybody

that's incorporating some sort of product

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that is replenishable and depletable,

is seeing a lot of success.

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And, you know, e-commerce and consumer

brands that have a product

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that is consumable and depletable

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and replenishable are looking for ways

to pivot into the subscription model.

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and so that's where you're

seeing a lot of growth.

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I mean, yeah, you know it,

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SubSummit first year, 200 people

this year on pace for 2000 people.

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So we've been seeing growth across

the subscription industry as a whole.

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Yeah.

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And congrats to you and Chris

and the team on the success

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that you guys have had as well.

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you know, and I look to myself

and between myself and my wife,

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you know, the number of subscriptions

that we have,

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and, I mean, every house is filled

with something at this point.

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JW was just talking about his wife

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just got something the other day.

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I forget already what the name is.

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But, you know, we don't need to promote

any names here on this, but,

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more importantly,

it's just to talk about, you know, people

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look at, oh,

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I think oftentimes that I'll talk

to people that are outside the industry

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and they'll say something like, is this,

you know, oh, are this is it a fad?

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You know, the subscription box?

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I'm sure you've heard that.

It is certainly not.

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No, it's certainly not.

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I mean, like

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there was there's always a time

within every industry

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where the question is like,

is this bubble going to burst?

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We're not seeing.

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Yeah, right. It's not a fad.

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It's only growing exponentially.

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I mean, the trends, you're saying

33 billion in the subscription

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box space, but the subscription industry

as a whole is going to hit $2 trillion

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in the next few years.

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So it's not a fad.

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I think we're seeing more and more

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again, it's nice to see,

but you even see some of these enterprise

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and legacy brands

figuring out ways to kind of pivot

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into the subscription model,

because who doesn't love recurring revenue?

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That I couldn't agree

more in the amount of companies

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and you know, and let me know if you know

this, you know, echoes with you

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a little bit too, with you

can you log in and see,

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you know, subscribe and save functions

and half the people

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you're going to buy from now,

which is, which is,

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in its own way, a subscription model,

you know what I mean?

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Like, you know, you go to buy a vitamin

from a vitamin company ever.

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And, you know,

you realize you're going to use it

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every month, subscribe and save,

boom, it's there.

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You know what I mean?

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So that's something, too. Okay.

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So we want to talk today

though about international.

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One thing I've had the great,

great pleasure of working with

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is a number of subscription based brands

to really help them get their box

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to subscribers that are located outside

the United States.

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there are plenty of challenges

in doing so.

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but there's also,

I think this, this weird veil

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that people look at

of saying that it's so daunting.

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I don't know how to get into it.

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I don't know, you know,

what to do, where to start.

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You know, this is, will be on, you know,

five, six episodes at this point.

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And we've talked, pretty extensively

about where we would make suggestions

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for top three markets, including,

you know, one, let's look at English

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speaking countries. Right.

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Let's look at, you know, Canada.

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Then we're going to look at,

you know, UK and Australia.

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so you yourself was

you were my contact that

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I worked really closely with when it came

to working with Gentleman's Box.

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Okay.

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So while you guys owned the brand

and you really had your finger

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on the operation as a whole,

and so my question is, you know,

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what were some critical data points

when it came to international or Canadian,

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subscribers that you focused on in terms

of whether it was,

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you know, profitability,

you know, customer experience,

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ease of use, transit

times, that type of thing.

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I mean, it's really easy to say

all those buckets, to be honest.

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when we were thinking

about shipping internationally,

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I think the number one thing that came

to mind right off the rip was like, cost.

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Like, what does it cost

to ship internationally?

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and in cost, there's so many

different factors you have to think about.

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The size of the box,

the weight of the box.

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What are the goods inside?

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you know, do you want to

cover the cost of delivery duties

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paid to the consumer,

and then all of that has this,

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like, trickle effect on the experience

the consumer is going to have.

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And you don't want to

you don't want them to stop at your

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their local post office

and pay some sort of invoice.

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Right.

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That doesn't seem like a, a seamless or a

really good delivery experience for them.

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So there's a lot of factors,

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but I think

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I think cost was probably the first

and foremost the number one thing

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that we thought about first.

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Because Gentlemen’s Box,

we were shipping, obviously started off

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domestically for $25 a month, right.

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And for what we were delivering, which,

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which we promised 100, you know,

four times, 3 to 4 times the value, it was

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how are we going to deliver, you know,

3 to 4 times the value in the products

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without sacrificing quality?

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Of course, because that's not

that's the one thing you never want to do.

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You don't want to sacrifice quality

so that you can bake in more shipping cost

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within your, within your box.

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So without sacrificing quality or at $25,

how do we get this out internationally?

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And so we had to evaluate the costs.

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And I think that was probably

the number one thing that we thought

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about when trying to kind of enter

into international water.

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I, I had two questions down that road.

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So the first question is, all the sub box

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providers they use a 3PL traditionally.

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Right?

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So when you're choosing that... two things.

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So what's your thought

process of choosing that provider,

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number one, because there's a lot of costs involved.

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Pick and pack all that stuff.

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They're going to get you on overrides

and things like that.

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The second would be cost containment

because rates go up 5-6% every year,

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and you're trying to keep your box price

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within a manageable thing

so you don't lose, you know, customers.

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So how did you how do you recommend

to your people that you talk to industry?

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How do you recommend to handle that?

Well... That makes sense?

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Yeah, absolutely.

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To your questions.

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Cost containment.

Let me just address that first.

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You know, when you open up your doors

internationally,

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you're going to start to hit a market

that you were not going after initially.

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So the goal there

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and the hopes is that the acquisition

of more subscribers start to roll in.

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Right?

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And with the acquisition of more

subscribers and growing your community

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and your subscriber base means

you now leverage the ability of scaling

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and, you know, ordering products,

whatever it is for your box, whether it's

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ordering more boxes, it's ordering

more products in the box at scale.

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Your costs start to go down. So

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we always found that it offset

that anyways.

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So the cost of containment with the rates

going up every year,

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it was never an issue

because we were growing anyways.

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We were scaling our prices

across the board for the product.

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The packaging were going down

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and so is is usually in typically

in most cases an offset.

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Now, you know, choosing

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you know for a lot of subscription brands it

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there's like a point

where I always at least suggest

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once you kind of graduate,

if you will, and move on to a 3PL

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I think that early on most folks are in,

if they're in the startup phase,

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they're taking it on themselves.

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A lot of 3PLs are not going to,

take on somebody with 100 boxes

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or it's just not cost effective

to work with a 3PL

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when you only have 100 boxes,

or a couple hundred a month.

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So you get to a point where it does seem

cost effective to switch to a 3PL

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when you do search and swtich to a 3PL

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which at some point

I think everybody should,

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because your whole goal

is to grow your company.

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You think about the marketing and

the creatives to grow and scale your company,

00:11:38:04 - 00:11:39:15

to kind of take that load off

your shoulders.

00:11:39:15 - 00:11:44:03

So when thinking about working with a 3PL...

What’s the hurdle rate, John?

00:11:44:03 - 00:11:45:05

What was it? Three per day?

00:11:45:05 - 00:11:49:14

Your hurdle rate, like you would make that recommend that move?

00:11:49:14 - 00:11:51:09

For us...for us, it was, it was

00:11:51:09 - 00:11:53:02

it was monthly

because a lot of subscription box

00:11:53:02 - 00:11:56:05

companies, it's not so much

how much it's not so much

00:11:56:05 - 00:11:58:10

what they're doing on a daily basis,

what they're doing on a monthly basis.

00:11:58:10 - 00:12:02:10

Because a lot of the subscription

companies have a bulk renewal day...

Right.

00:12:02:11 - 00:12:03:12

on a monthly basis.

00:12:03:12 - 00:12:04:13

And so maybe that's,

00:12:04:13 - 00:12:07:14

you know, the fifth to the 10th

is their peak period of shipping.

00:12:08:03 - 00:12:11:03

And the rest of the month

is a few packages here and there.

00:12:11:07 - 00:12:14:04

So really we looked at as a monthly basis

00:12:14:04 - 00:12:17:05

subscribers on a monthly basis,

well 1500-2000,

00:12:17:10 - 00:12:20:10

we started to shift over to a 3PL.

00:12:20:15 - 00:12:23:11

Gotcha.

Some do it sooner nowadays.

00:12:23:11 - 00:12:27:08

when we started Gentleman's Box.

00:12:27:08 - 00:12:31:07

It was 2015ish, 16

when we looked to a 3PL,

00:12:32:01 - 00:12:32:12

you know,

00:12:32:12 - 00:12:34:05

and obviously every 3PL is different

00:12:34:05 - 00:12:37:05

in terms of what they're bringing in

in terms of requirement for a minimum.

00:12:37:09 - 00:12:40:06

A lot of 3PLs nowadays

have lowered their minimums

00:12:40:06 - 00:12:43:07

because they've found

cost-effective strategies internally

00:12:43:07 - 00:12:46:14

to be able to handle lesser

quantities on a monthly basis.

00:12:47:03 - 00:12:50:03

But like the 3PL you work with,

you want to make sure that they,

00:12:50:04 - 00:12:53:14

in my opinion, have a great relationship

with their carriers

00:12:54:01 - 00:12:56:11

as a whole, domestically

and internationally,

00:12:56:11 - 00:13:00:14

but while your international carrier

needs to be able to support,

00:13:02:07 - 00:13:05:07

if you're working with international

carrier independently,

00:13:05:08 - 00:13:07:00

you want them to be knowledged

00:13:07:00 - 00:13:10:06

in the international space and be able to support

you and help you mitigate risks.

00:13:10:14 - 00:13:14:10

But if you look at that independently,

you're hoping that a 3PL is also

00:13:14:10 - 00:13:15:12

getting that same level of service

00:13:15:12 - 00:13:18:12

from their international carrier

so they can pass that on to you.

00:13:18:13 - 00:13:21:00

Gotcha.

00:13:21:00 - 00:13:23:06

There was a lot that was

brought up there that I'm, like,

00:13:23:06 - 00:13:26:10

scribbling ideas in my head, scribbling

ideas down here that that highlight.

00:13:26:10 - 00:13:28:07

But, you know,

one of the resounding themes

00:13:28:07 - 00:13:29:15

that I've seen, whether it's with, again,

00:13:29:15 - 00:13:33:14

just an online shipper, you know,

e-com company, subscription box company.

00:13:33:14 - 00:13:36:12

Subscription has almost

always been resoundingly about this,

00:13:36:12 - 00:13:38:00

but customer experience.

00:13:38:00 - 00:13:42:01

You know, any time I am in conversation

with more of a high level

00:13:42:05 - 00:13:45:05

subscription box brand or subscription

based brand or,

00:13:45:10 - 00:13:48:08

you know, a lot of times these terms

that maybe that you can touch on John,

00:13:48:08 - 00:13:51:08

while we're here is, you know,

subscriber churn, LTV,

00:13:51:09 - 00:13:54:11

and then we can kind of peel that back

and bring it around to, you know,

00:13:54:14 - 00:13:58:03

again, we're focused on the

the international US outbound logistics.

00:13:58:03 - 00:14:02:03

But why logistics is an important factor

in impacting those areas?

00:14:03:11 - 00:14:06:02

Yeah I mean, first of all,

the customer experience

00:14:06:02 - 00:14:10:06

is across the entire journey of a brand

from when the from the moment

00:14:10:06 - 00:14:13:07

they come across your ad on social media

00:14:13:07 - 00:14:17:12

to the moment they land on your website,

purchasing the product, and it just

00:14:17:13 - 00:14:19:06

it doesn't stop

when they purchase the product.

00:14:19:06 - 00:14:22:06

It's what's the post

purchase experience.

00:14:22:09 - 00:14:25:05

And that's actually a huge factor

00:14:25:05 - 00:14:28:11

in it plays a huge role in churn, right.

00:14:28:11 - 00:14:31:00

Like, if I order a product

00:14:31:00 - 00:14:34:13

and, you know, we live in this world

where we're expecting things to arrive

00:14:35:04 - 00:14:38:04

or we expect and we hope

that arrives in 2 or 3 days, right?

00:14:38:10 - 00:14:39:07

Right.

00:14:39:07 - 00:14:41:03

But in a world

where we are expecting things

00:14:41:03 - 00:14:44:11

to be delivered so quickly,

if it arrives three,

00:14:44:12 - 00:14:47:15

four days later than your expectations,

that's a horrible experience.

00:14:47:15 - 00:14:50:00

You haven't even received the product yet.

00:14:50:00 - 00:14:53:05

and so you're already judging your

experience based on, say, transit time.

00:14:53:05 - 00:14:56:08

So post-purchase experiences,

00:14:56:08 - 00:14:59:08

whether it's on the logistics side

or the fulfillment side,

00:14:59:11 - 00:15:04:05

even the way that you're, sending over

information from the tracking information,

00:15:04:05 - 00:15:07:06

the emails, it's all very

important post-purchase. But,

00:15:08:07 - 00:15:11:07

you know,

on the logistics side of things,

00:15:11:10 - 00:15:15:00

I think every consumer

wants to see in real time

00:15:15:05 - 00:15:18:11

where their package is,

the second that they make that purchase.

00:15:19:02 - 00:15:22:06

So from the moment

it leaves a certain person's warehouse,

00:15:22:11 - 00:15:25:02

where it is every step of the way,

00:15:25:02 - 00:15:28:02

I've always recommended to brands

that I've spoke to that

00:15:28:08 - 00:15:31:00

you make sure that the carrier that you're

working with, the service class,

00:15:31:00 - 00:15:35:02

the service that you're using has,

you know, door-to-door tracking.

00:15:35:02 - 00:15:36:14

Because if you don't have

door-to-door tracking, the

00:15:36:14 - 00:15:39:14

the moment it enters into the country,

if tracking is lost,

00:15:40:01 - 00:15:42:02

you know, the customer is kind of like

left in the dark.

00:15:42:02 - 00:15:44:05

And that creates a horrible experience

for the customer

00:15:44:05 - 00:15:46:00

because they don't know

what's going on with their package,

00:15:46:00 - 00:15:48:00

is it going to arrive in two days,

three days,

00:15:48:00 - 00:15:51:05

and sometimes even the merchant doesn't

even know when enters into the country,

00:15:51:11 - 00:15:53:07

like what's happening with this package.

00:15:53:07 - 00:15:57:05

So I think, there's a lot of facets of logistics

00:15:57:11 - 00:15:59:09

that play into the post-purchase experience

00:15:59:09 - 00:16:01:06

that are very important to hone in on.

00:16:01:10 - 00:16:04:10

Hey everybody, thanks so much for listening to part one,

00:16:04:10 - 00:16:08:07

episode five “Outside the Box with Asendia USA” podcast.

00:16:08:07 - 00:16:11:03

Stay tuned for part two dropping May 22nd.