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

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

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Thanks so much for listening. Enjoy.

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There's a lot of facets of logistics

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that play into the post-purchase experience

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that are very important to hone in on.

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Awesome.

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Those are those are great points. I agree.

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

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to a lot of these brands in the

subscription box space is to,

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you know, obviously, you know,

we can talk about this is what we do,

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but when it comes down to it is we want to

help create a great customer experience.

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We want to help eliminate as much churn

as absolutely possible.

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You know, surrounding the delivery

experience for, you know, your box.

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Right.

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

a skincare brand.

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Right.

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And how important it is

that if you're on this 30 day

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continuity program where you're

going to run out of supplies,

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that, making sure that your deliveries

come at a very regular cadence,

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it's fulfilled at a very similar time

and also delivered in a very similar timeframe.

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How important that is to make sure

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that you're not losing subscribers,

you know, something like that situation,

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Especially on a

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you made a really good point there too

as well, especially on products that are,

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you know, depletable products

like you want to adhere to a schedule,

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where this product is arriving

every 30 days.

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It's I think the experience

is even more important versus

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a subscription box that is providing some level

like discovery and delight on a product

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

of a need versus like, a want.

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But for those, those subscription box

companies that have products of

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that are more of a need.

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You know, it's really,

really important to kind of,

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just strengthen

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the experience so that the cadence

that they're expecting is, is on par.

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Absolutely.

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The other thing that I have found is

you talked about,

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you know, milestone tracking updates,

consistent tracking updates.

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So with customer experience comes in.

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And just as the market shifted from,

you know, if we look at pre-COVID

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to, let's call it post-COVID,

you know, the amount of,

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you know, shippers that have transitioned

or are working to transition from a,

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you know, a DDU delivery method

to a DDP delivery method, right?

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And there are a specific set of challenges

with a subscription box

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because of the high SKU count,

typically in each individual order.

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So, that can create a challenge

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for some shippers.

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and again, the purpose of this podcast

is more educational.

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Right?

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But it's for the purpose

of conversation too.

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I have to be able to speak to certain

networks, and that includes our network.

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Right.

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So I look at what we do, even since,

since we stopped

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with, with G box, but we launched our own

Canadian delivery network, right.

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It's it's completely DDP delivery network.

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We now facilities in Mississauga,

Calgary, and Vancouver.

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And what our team, though

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our Canadian team is able to do

is to get a pre set list of,

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you know, not ingredients, but SKUs really

you know of what's inside of each box.

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They can categorize them

and they can, you know,

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classify everything and do it

ahead of time before the actual packages

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are getting to the border

to help with a seamless clearance process.

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So there's no delays in that way.

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But also to be able to say,

hey, we we can't, you know,

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we can't do this, you know, aerosol

or we can't do whatever that might be.

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And I'm saying all this

to lead it back to, and again,

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this is not tooting my own horn,

but it's so important for a brand to,

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it's better than a horse reference

that we've had in the last two episodes.

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Not that he’s tooting his own horn.

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Okay. All right, so.

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

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Cut that one out right there. Yeah.

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So it's better though.

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It's it's so important

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and vital to work with work

with a partner in the logistics space.

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I think that genuinely cares

and is knowledgeable about these things.

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To be able to really help,

you know, again, we're going to

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we're going to work to make sure

that you have a good experience.

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We're going to help

to eliminate as much churn as possible,

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keep that customer as long as possible

by us being a partner to your business.

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and that's where that comes in.

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And I think, you know,

just for the sake of time,

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I want to talk to you a little bit about

what you see in terms of differences,

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with people that make decisions

surrounding logistics

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when it comes to for subscription

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

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maybe a mid-market level,

and then an enterprise level.

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you know, box company

and what that may look like,

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Kind of their thought processes, decision

making when going internationally?

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Yes. Yeah.

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I think on the startup side of things,

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they're very much thinking,

let me just get my feet wet and,

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and churn it out.

Yeah, that's right.

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

It’s about survival,

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and let's make it happen.

Yeah.

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Yeah, and honestly the advice there too

is because you touched on it is

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no one really should be entering

internationally unless they've done their,

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unless they've done

like rigorous research on

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shipping internationally when it comes

to like costs, the products inside,

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Right.

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Like while the box for a lot of folks

is one single SKU,

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there are multiple different SKUs

within that box and multiple different

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products within the box that have

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different, maybe harmonization codes,

and there's different rules

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and regulations around

the different products inside that box.

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So before anybody enters

in internationally,

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even as a startup,

they should be researching that.

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But I think startups are

always just thinking,

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let me just get into international,

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once they start to get to that mid-level

range, and even in the enterprise, it's

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it's very easy on the

operations side of things.

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And I was very guilty of doing this.

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I don't want to use the word guilty

in a negative way.

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Is that like we're always looking at,

you know, cut costs somewhere

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and finding the best carrier

who's going to help us cut costs but also

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deliver on transit times, who's

also going to understand the subscription

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industry to help us mitigate

these risk of when these boxes

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are coming over the border.

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So, mid-level and enterprise I,

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I'm going to package them

together because I think

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they're always thinking about that.

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

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It's well, I'm experiencing issues

with, with our packages.

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Maybe the costs are fine,

but when they're coming into the country,

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they're not moving as quickly

or we're coming up where

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we're having issues at the border.

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And so finding the right partner who's

going to help mitigate all those risks

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and who understands the industry,

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and understands

the nuances of a subscription box,

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is going to come into play

for a lot of those, those brands.

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Yeah.

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Go ahead.

So that's a great point.

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

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So you've been doing this

a long time, obviously.

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The clients’ behavior

or anything or their customers,

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what has changed your opinion

from when this first started out,

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when you were in the beginning is

what has changed in the market, in your opinion?

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Anything? Any kind of buying

behaviors has changed?

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Cause I... when I was at UPS,

we had a lot of these companies,

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and in some the cadence

was the first to the fifth,

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they would ship.

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Then the other group would ship

the eight to the 10th and whatever, and

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but during COVID,

it kind of slid a little bit

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because the transit expectations

were longer. Right?

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And that was a tough time

for subscription boxes.

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But it was good.

A lot of people were home.

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But I'm just curious, what,

in your opinion, has changed? Anything?

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In the market of what

the expectation in this sub space?

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Yeah.

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Well, you know,

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I think there's a lot of things

that there's a couple different thing

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that changes, you know,

where it was very much

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the subscription box space,

at least when we started off,

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it seemed like there were

more boxes out there

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that were all about discovery

and delight of different products.

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And they would have

this, you know, bulk renewal,

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has shifted to

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especially when COVID hit, it was,

you know, everyone, everyone

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didn't realize how many subscriptions

A. they had to begin with.

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Everyone always says they have like four...

Exactly, exactly.

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...four subscriptions.

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

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She has eight of them.

Yeah.

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Yeah.

That's a lot of money a month.

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Yeah, right.

Right Sharvon?

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Nah, I'm just kidding.

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

when people kind of back

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into their finances and realize

how many actual subscriptions they have.

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So then they start to, to cut back at,

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okay, which ones do I keep,

which ones I don't.

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And I think the ones that

were more of a

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need stayed, versus the ones that

were just kind of a want,

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so, you know, I'm subscribed

to a couple of subscriptions.

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One is an air filter for my,

for my AC system.

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

You’re living...

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You're living that husband and dad life.

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Okay, you got to take care...

I don’t have to jump in my car,

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

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and grab an air filter.

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But that's something that you need

to replace every single month.

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Right.

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And, you know, no one thinks about those,

those subscriptions, but,

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

of subscription that you purchase, ones

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that are maybe a little bit

more of a, of a need than a want.

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And then also has shifted

a lot in subscription box

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companies is the ability

to offer the consumer this flexibility

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to manage their subscription

with a little bit more autonomy.

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Right.

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So making it easier for them

to log into their accounts,

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if they don't want the box this month

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

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giving them the kind of

the flexibility to say,

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you know, you don't have

to subscribe this month.

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And that kind of actually helps

increase the LTV on the consumer

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because they don't have to

they don't think that, okay,

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I have to go through this

daunting process of canceling right now

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because they've given me this flexibility

of just pausing it this month.

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And you're more likely to save

that customer by offering the flexibility

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to manage their subscription

with a little bit more autonomy.

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And that's something that we're seeing

more with subscriptions as well.

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So you... that's a good point

because it's mostly apparel, right?

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Like I know a couple of large...

Could be skincare, could be apparel.

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You can go in and pause.

A couple of large ones...

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Typically what will happen is

you'll get a notification,

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

or we're doing something like that,

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you know, limit, you know,

want to modify any changes.

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You can go in and you can change.

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Very cool functionality.

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So John, I know we're

getting close on time.

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We are?

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JW, we are.

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

home here. So here we go.

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So a couple things I wanted to share,

some statistics for the listeners out there.

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I know you know I love dropping a little knowledge.

Here we go.

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No, in the last podcast we put out

or maybe the one before that

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I can't keep track.

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But John, think about these

numbers real quick.

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The UK

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e-commerce market in

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2023 is valued at $169 billion.

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Canada valued at $44 billion.

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Australia sits at about $45 billion.

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Okay, so we're looking at,

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just a tremendous amount of money there.

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You're not going to add it up?

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But no, no, no,

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

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But...what I want to...

Did you say UK at 169?

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UK at 169 and Canada at 44?

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Yes. Canada's ninth largest...

Canada's ninth largest e-commerce market.

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UK is the third largest.

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It's China, US, UK.

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And then there's country... because we

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one of the podcasts we recorded

previously focused on Canada, UK, Australia.

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

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And as Asendia USA,

our our largest export countries,

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for our business is Canada, Australia, UK.

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

Yeah. So, but for us,

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as an organization, our largest partner

for export is Canada.

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And that's what we focus on more.

But anyway, let's

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so, shifting over here real quick,

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if you can give us two minutes,

I just want to know,

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I think probably for my

own personal knowledge is,

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what are a couple bullet points,

biggest challenges facing subscription

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box companies just going into this year

or throughout this year?

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I know I'm hitting you

with the good stuff.

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

No, just in general.

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In general.

I would say growth strategy. Right?

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I mean, you know, it's

running business, right?

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Yeah.

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

focusing on is acquisition and retention.

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So how do we better acquire customers?

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And especially since

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sometimes, you know, paid

media could be such a volatile market,

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one day you acquire a customer at $10

one day or acquiring a customer at $100.

00:12:04:02 - 00:12:07:04

So it's making sure that

on the acquisition side of things, you're

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balancing it well enough across

a diversified set of channels

00:12:11:08 - 00:12:14:05

to acquire customers

and lower your cost to acquire them.

00:12:14:05 - 00:12:15:13

That's always been a challenge.

00:12:15:13 - 00:12:19:00

A lot of folks are,

a lot of merchants are always focusing on.

00:12:19:05 - 00:12:22:05

And then, of course,

you know, retaining them.

00:12:22:07 - 00:12:25:09

You know, when acquisition is so volatile

and costs are through the roof,

00:12:26:10 - 00:12:29:05

you have this, this loyal customer

base, who,

00:12:29:05 - 00:12:33:02

who are who's already purchased from you,

who's already engaged with you.

00:12:33:07 - 00:12:36:07

And so you want to make sure

that you're nurturing those relationships

00:12:36:11 - 00:12:40:05

and providing an amazing experience

even after the fact, because those are

00:12:40:05 - 00:12:43:05

the ones who know your brand, who have

been loyal supporters of your brand.

00:12:44:09 - 00:12:47:10

So it's focusing on how to

better retain them

00:12:47:10 - 00:12:52:02

and just enhance the experience for them

as they are part of your community

00:12:52:02 - 00:12:56:02

and your brand for as long as they are,

because of course that increases LTV.

00:12:56:02 - 00:12:59:01

So, those are probably the two one

and two things to focus

00:12:59:01 - 00:13:00:09

is on a better acquire customers,

00:13:00:09 - 00:13:04:03

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

sure that you're retaining them,

00:13:04:07 - 00:13:08:03

to increase LTV and just nurturing them

and creating a better experience for them.

00:13:09:02 - 00:13:11:12

Okay.

Hey John. Hey John. Two questions.

00:13:11:12 - 00:13:13:03

What do you think's acceptable churn?

00:13:14:08 - 00:13:15:13

Percentage?

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

In your opinion.

00:13:18:12 - 00:13:21:05

Six... 6 to 8%.

00:13:21:05 - 00:13:22:03

Wow. That's pretty good.

00:13:22:03 - 00:13:26:05

And then the thing... what's the

average length of a sub box

00:13:26:05 - 00:13:28:04

keeps the customer?

LTV?

00:13:28:04 - 00:13:29:05

Yeah.

Lifetime Value.

00:13:29:05 - 00:13:32:05

Yeah, how long? *cough* Sorry.

00:13:32:10 - 00:13:33:04

Great question.

00:13:33:04 - 00:13:38:09

And obviously I think it varies depending

on the industry the actual box is in.

00:13:38:12 - 00:13:39:01

Right.

00:13:39:01 - 00:13:42:15

You're going to see again going back to

products that are depleteable and replenishable.

00:13:42:15 - 00:13:45:12

I bet the consumer that is subscribed

to Dollar Shave Club

00:13:45:12 - 00:13:50:09

or Harry's Razor has a much greater LTV

and they've received many more boxes

00:13:50:15 - 00:13:55:05

than let's say a Gentleman's Box,

because after so many months

00:13:55:11 - 00:13:57:15

you can love the socks

and the ties in the box,

00:13:57:15 - 00:14:00:03

but your sock drawer

gets full, right?

00:14:00:04 - 00:14:01:12

Not this guy. Never quit.

00:14:01:12 - 00:14:02:04

Never quit.

00:14:02:04 - 00:14:05:00

Not Nick. Nick was our...

So what do you think about...

00:14:05:00 - 00:14:05:08

Nick was our...

00:14:05:08 - 00:14:07:04

What do you go, him? No, no.

00:14:07:04 - 00:14:09:01

Come on.

Nick was a subscriber for years.

00:14:10:00 - 00:14:11:01

Right?

Years!

00:14:11:01 - 00:14:12:03

Years.

A lot of socks my friend.

00:14:12:03 - 00:14:14:04

He was an outlier.

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

00:14:14:04 - 00:14:16:15

Yeah he was...he was an outlier.

He’s afraid of me.

00:14:16:15 - 00:14:20:09

And then you have any of the subscription

box that are monthly versus quarterly.

00:14:20:09 - 00:14:21:09

So. Right.

00:14:21:09 - 00:14:23:14

The the box count,

the LTV count is much different.

00:14:23:14 - 00:14:26:01

And then there's

pricing that plays into it as well

00:14:26:01 - 00:14:29:02

where some boxes are $9.99

all the way to $159.

00:14:29:02 - 00:14:32:03

So there's obviously, a lot of different

factors that play into it.

00:14:32:03 - 00:14:34:07

But I would say

00:14:34:07 - 00:14:38:01

kind of general rule of thumb for anybody

that has a subscription box

00:14:38:01 - 00:14:41:13

and is looking to generate high LTV

on their subscription box,

00:14:42:02 - 00:14:44:02

it's about thinking about those products

00:14:44:02 - 00:14:47:02

that are going to fall

into this kind of category of,

00:14:47:04 - 00:14:49:09

you know, continuity

where you need to get it more and more.

00:14:49:09 - 00:14:52:09

You're going to see that the consumer

is going to stay on much longer

00:14:52:09 - 00:14:53:12

with those type of products

00:14:53:12 - 00:14:57:12

than something that is more of like,

you know, a discover and delight product.

00:14:58:00 - 00:14:59:11

And if you are a discover

and delight product,

00:14:59:11 - 00:15:03:07

make sure you're focusing on delivering

an amazing experience, building an awesome

00:15:03:07 - 00:15:05:02

community, engaging with the person.

00:15:05:02 - 00:15:08:03

And that's going to help kind of offset

and create better LTV for them.

00:15:09:01 - 00:15:10:00

Okay. All right.

00:15:10:00 - 00:15:11:12

Well, this has been fantastic.

00:15:11:12 - 00:15:13:06

I want to highlight...

Are you cutting him off?

00:15:13:06 - 00:15:15:13

Well he's got to go to a meeting,

I'm sure.

00:15:15:13 - 00:15:17:11

So we've got the sign behind him

00:15:17:11 - 00:15:22:15

that for the show that that he has been

running and started and founded for years.

00:15:23:01 - 00:15:27:02

SubSummit in Dallas,

June 17th through 19th, 2024.

00:15:27:06 - 00:15:29:06

Be there. Don't miss it.

00:15:29:06 - 00:15:31:05

And then I just want to thank you,

John, for your time.

00:15:31:05 - 00:15:34:05

We both do, to talk today

to today's listeners about the

00:15:34:05 - 00:15:36:08

do’s and don'ts of shipping

subscription boxes internationally.

00:15:36:08 - 00:15:40:13

We went on an adventure, a journey.

We talked a lot about just holistic industry stuff.

00:15:40:13 - 00:15:42:15

But thank you so much for your time.

00:15:42:15 - 00:15:44:10

Yeah. John, Nick,

thank you so much for having me on

00:15:44:10 - 00:15:45:12

and allowing me to share my knowledge.