A year ago I told Reddit that I quit my job and sold my car to make my business dream a reality. Now that business is expected to make over $3 million by the end of the year. It's time for an update! AMA!
Hey Reddit! It's been a while and I want to update you on how my business has been doing this past year.
If you haven't read my previous AMA you can do that here: https://www.reddit.com/r/IAmA/comments/388dc6/a_year_and_a_half_ago_i_quit_my_job_and_sold_my/
A little over 2 years ago I started working on what I thought was an excuse to not code my SE assignments for my professors. Eventually that excuse turned into an absolute obsession. I worked for hours every day for a year and a half developing and refining a website and a business concept. I was so convinced that this was going to work that I dropped out of engineering school, quit my job, and sold my car for business collateral.
That's how SnackCrate was born. The idea was simple. Every month you'll receive a box of snacks from a different country and you never know which country it is until it arrives.
Now that you're all caught up I just want to say thank you. I couldn't have done it without you. Reddit took my business from a simple idea to an overnight success and its been a blast ever since. Thousands of you wrote me advice, messages of encouragement and even sent me your resumé! Without Reddit, I'm not sure where SnackCrate would be.
I've learned so much in the past year about international business, marketing, worldwide logistics, web development, money, customer experience - pretty much anything a good CEO needs to understand.
I want to pass on what my experience has taught me to anyone who wants to know. So let's talk business (or anything else) Reddit! AMA!
For those interested in checking out what I do, you can do that here: www.SnackCrate.com
EDIT: Many of you have been PM'ing me to get a discount code. You can get $5 off here: www.snackcrate.com/sign-up
One thing I'd like to do is have a way to give reddit users (and ONLY reddit users) $10 off their first crate. I think the best way to do that would be for SnackCrate to become a reddit gold sponsor. If anyone knows how I do that please let me know.
EDIT 2: Well Reddit, it's been awesome catching up and speaking with some of you but I'm calling it a night. I'm slightly disappointed that I wasn't asked if I wanted to fight horses or a duck but I'm sure I'll survive. :) Feel free to drop me a line anytime!
-Kyle Roarke CEO SnackCrate
We don't unfortunately. However if you DM me your mailing address I'll send you some stuff from Japan and you can tell me how it is :)
Gross or net 3 million?
Has to be gross, that's why "making" 3 million is extremely misleading in the title. I have a very, very hard time believing a company would go from ground up to netting $3M within a single year, no way.
EDIT: Yep, downvoted for a completely legitimate question.
Lol. Going from zero to grossing 3 million is extremely impressive, let alone in a year. How much money did you gross last year, I forget?
Thanks! It's a little weird because the numbers get exponentially higher. I think we grossed around 150k last calendar year. We just did that last Sunday alone.
what's your net?
Nice try IRS.
What has been the best international snack you've tasted and where was it from?
I get asked this all the time and it's VERY difficult to choose! If I have to narrow it down I'd pick two:
- Cadbury Double Decker (United Kingdom)
- Green Tea Matcha KitKat's (Japan)
I can't think of anything that's sold in the United States that's similar to either of them.
Edit: I forgot something. OLD DUTCH KETCHUP CHIPS (Canada). Seriously spend your money on a bag from Amazon. You'll never see chips or ketchup the same way again.
To be fair, this is an amazing idea, and I'm glad it's working out for you. If it weren't for the fact that I live in AZ and I don't like getting melted goo in the mail, I'd have signed up for this long ago. Very jealous of the peeps in more moderate climates!
As for my question, have you thought about a "non-melty" option on your boxes? I apologize if this has been answered, but this sounds awesome, and I'd love to partake! :D
This might be one of the most common issues for our customers in AZ. The melting point of chocolate is somewhere around 86 degrees. It's well over that there. What a lot of our customers in AZ do is get their crate delivered to their office or work. A quick trip to the fridge for an hour or two normally sorts everything out.
Do you offer expedited shipping with dry ice? It's expensive, but I've spent the money a few times to get a gift such as Omaha Steaks. Just a thought.
I've considered it. Unfortunately cooling is not an option for us. Dry Ice is too cold and regular cold packs will get everything wet. In reality we can only ship it overnight and that normally costs more than the average person is willing to pay for SnackCrate.
Just curious how far in advance must you order products from overseas or were you able to find US based suppliers?
We normally place orders about a month and a half out. Everything we sell is imported by us, for us. Very rarely do we use a US supplier for anything. I think that's important because I don't want to sell something to you that you can go get at Walmart.
Coordinating these shipments has become a job in and of itself. To give you some perspective.. when we first started a year ago, our shipment was shipped from Japan by priority mail. Our last shipment filled an entire 787 Dreamliner.
There is no 787 freighter yet. Do you mean the cargo area of a commercial flight?
I work on the 787 program, which means by proxy I helped you send people candy they would never normally have.
On behalf of snackers everywhere, we salute you sir.
You shipped 12T of snacks?
If it was chips/crisps, then the volume is more the limiting factor than the mass.
Ding ding! Right you are.
Will you rank the presidential candidates in order of whom you would vote for?
edit: I'm interested to learn what a young entrepreneur values in a presidential candidate.
- Bernie Sanders
I value honesty and the desire to do right by people above all else. Even if you disagree with him on a policy level you cannot doubt that he wants to make the United States a better place.
Is snackcrate able to handle food allergies well?
(My biggest issue with nature box when I tried them)
Unfortunately no. If you have specific food allergies then SnackCrate might not be for you. Sorry :/
Why don't you guys ship to Canada?
We did ship to Canada (and about 10 other countries) up until a few weeks ago! Unfortunately (some) people were ripping us off by waiting until their SnackCrate would ship and then claiming fraud with their credit card company. In some instances, opening to a new market like India actually does cause legitimate credit card fraud claims to increase because they are using stolen cards.
It was costing us a TON of time and money to combat these claims and it wasn't worth it for us. I also didn't like the idea that international shipping made SnackCrate a very expensive proposition for someone living in a place like Sweden for example. I think that cost could negatively impact someones perception of us. We'll return to International shipping someday but we need a little time to work out how we can do it quicker and provide better value to those living outside of the USA.
cant they do the same in usa?
Yea but if you do it in the United States we have very a clear legal recourse to deal with it. You can be sent to a collections agency, arrested for theft of services or brought to court or an arbitration hearing. We probably wouldn't do that but it is an option we have and a strong deterrent.
I just want to say congratulations...and ask a small request:
I saw your box from the UK and as a Brit living in the US I think its great...but (there's always a but right?) next time could you do Prawn and Cocktail flavoured crisps and a (black current) drink? These two things are staple flavours in the UK its the other juice flavour...the other crisp flavour- and more Americans should taste the greatness.
Thanks for the suggestion! I couldn't agree more! We're putting Skips in this months crate from the UK!
Are you familiar with a competing company that does the same thing as your called Universal Yums? I recently cancelled my subscription with them and wish I would have tried yours instead.
I've heard of them yes. What didn't you like?
From what I've seen it has a lot of "but it's technically made in" even though no one there eats it.
Like a whole bunch of stuff made in northern Ireland was in their UK box even though it's produced for the Irish market.
Though I'm basing this entirely on my obsession of watching a grumpy british man in a bathrobe whine about onions and peanuts on youtube.
A great many companies that seem like they do what we do are really just selling things that someone else is importing already. More than likely you can get most things they sell at your local international market. Prime example would be to youtube unboxing videos and compare whats in a SnackCrate vs whats in the other guys box.
Could you give us a very broad overview of your revenue and how it's been growing since you started? Like, how many units have you been selling / day / month ?
What would you say had been the most effective strategies that helped increase your sales?
What do you think of advertising?
Glad to see you made it, best luck!
I'll try to give you as much as I can. Answering some of those questions too specifically may give our competition insight into our operation and profit margin.
Right now we're growing at a steady click of 25% increase month over month. Thats a self imposed limit. In my experience growing any faster is difficult to handle and expensive. We can adjust our rate of growth by switching ads on and off.
The most effective strategy I know to increase sales is using a combination of influencer marketing and Facebook. It took us a few months to get the message right but it works like a charm. I cannot recommend Facebook enough. For every $ we spend we make 6 more in revenue.
Sweet idea! Congratulations on taking the leap and making it work! I just signed up for the big crate, because big.
Welcome aboard and thanks! I hope you enjoy your snacking adventure!
As a logistics professional myself. Do you feel that your getting the best deal out of your logistics suppliers or does it feel like something isn't quite right ?
The reason I ask is I have always found that start ups always pay a hidden premium to logistics companies because supplier hires people with little or no experience to handle their logistics and with that comes corruption and avarice by both the logistics companies and shippers employees.
Now that you know that formula how does your company deal with this type of situation ?
I think when it comes to anything in business you have to find people to work with that you trust. Sometimes building that trust quickly isn't easy but for us it's necessary. Trust but verify. Quite possibly the riskiest business we've ever done was in Brazil. They are facing serious economic issues coupled with complex Brazilian government bureaucracy made it an absolute nightmare.
Business culture is vastly different around the world and plays a huge part in trust too. Doing business with someone in the UK is VASTLY different than doing business in China or Japan. Work ethic, efficiency you name it. All different. How you approach them is everything. I can be very forceful with someone from the UK but being forceful with someone in Brazil is likely to end the deal right then and there.
When it comes to logistics pricing, we've reached a certain scale that our shipments fill entire planes. We negotiate pricing direct with airlines like Delta, Virgin Atlantic etc. They aren't ripping us off :)
How much does it cost to fly a Dreamliner filled with your product across the world?
Last month it was close to $30,000 from Japan. That's just the cargo area and doesn't include the passenger area (we don't use that obviously).
How much of your business is automated? How much of it is box-cutter wielding employees hand packing every crate?
Edit: Some pictures would be cool. You may have them on Facebook, but Facebook is the devil and I refuse to check.
I love this question because it's easy to imagine a bunch of robots building a SnackCrate. Everything that goes into a SnackCrate is done by hand. Someone folds the box, folds a piece of paper, sets the items in the box so they won't be damaged and then they seal it with tape and put a label on it. I have a video on my Facebook that you can see: https://www.facebook.com/kyle.roarke/videos/10208499816560505/
That was April's crate from France. Everything else is automated however. Postage purchasing, emails, vender orders and USPS pickups are handled automatically by "SnackBot" our clever backend.
To follow up this answer. How many employees do you have?
Henry Ford called from the dead, he'd like to introduce you to the assembly line.
That is an assembly line. Two actually. Boxes rotate in a small area rather than traverse the entire room.
How did you come up with the idea?
What were you studying before you dropped out?
Do you plan on ever finishing your studies?
One day my brother came home and was showing me this subscription company called NatureBox. I started looking at them and what they do and I thought "Wouldn't this idea be way cooler if the snacks were from different countries?". I remembered when I was younger my dad (who was marine) sent us a box of snacks from Japan. I was so amazed! I figured I could recreate that amazement for everyone. That night I started working on the website and registered the domain.
I was studying Software Engineering.
Maybe. It's hard to say. As it stands currently, college has no value to me.
There have been a lot of monthly box services that have sprung up over the last couple of years. Many of them have failed due to an inability to keep up with demand and/or an inability to consistently source affordable and well-varied goods. Have these been issues thus far? And how do you plan to avoid them in the future?
Keeping up with demand might be an issue if we let it get that way. Keeping that balance between growth and runaway growth is something I work on constantly. I find a 25% increase in sales every month is perfect for us. There are a little under 200 countries in the world. We've done 11. There are plenty to keep us going for a long time :)
Awesome job congratulations.
Aside from Reddit, how have you marketed this box? Do you pay for online ads? Do you track referrals and give a bonus for them?
I think that when it comes to paid marketing nobody can beat the juggernaught that is Facebook combined with influencer marketing. 98% of our customers come from there. The platform is so effective that we have to turn the ads off after about a week every month otherwise we completely overshoot our ability to supply.
I am an upcoming freshman in college and have considered taking the same degree you have. although you didn't finish it, did taking software engineering help you in any way as an entrepreneur?
Absolutely! No doubt in my mind. I just got tired of paying for school because with a good programming foundation google and stackoverflow can teach you anything for free. Learning about programming starts with understanding data structures and concepts like object oriented programming. Once you get that you can teach yourself almost anything.
I want to start a similar service, but different products (not snack related). What did you focus on first when you started?
For example, what were your first steps? Creating a website? An app? Contacting vendors? What were the first things you did? Thanks!
I focused primarily on the business concept, website and logo first.
The absolute first thing I did was register a domain. Without a good domain an online business will suffer so flesh it out from there.
Are you hiring? I am passionate about snacks, and will try anything once.
Even anus flavoured crisps?
Believe it or not, you're the second person this week to ask me if I've ever tasted a butthole.
OP Please. We want to know.
Hey I remember the original ama, glad to see it's working out for you! Any idea how many kinds of kitkats they have in Japan it seems like a lot?
Over 200 different kinds ranging from Apple Pie to Wasabi! Entire stores exist just to sell them!
Y no paypal ? :(
What has been the hardest part since starting your business?
Great question! Logistics. By far. Moving 5 tons of candy bars from Japan to the US sounds very straight forward but it isn't. In some cases the factory has to make things for us. Now multiply that by 20 different items from twice as many manufacturers and you can see how difficult that can get.
Theres a certain point where your company starts putting stress on other companies supply chains. When you hit that point you know you've gotten big. Bracing for that and finding solutions from your Macbook in your bedroom can be rather hard. :)
do you only work with 3 countries for the food you bring in?
We've done 11 in the past and will be adding 6 new countries during the next year.
If you don't mind me asking. How old are you?
I am 26.
Did a lot of friends and family think you were crazy? I am having trouble with that. Thanks for giving me hope that my ideas can work as well if I just keep at it. Will have to try those snacks when I am up and running.
Absolutely! They still think I'm crazy! Starting a business is not a typical life path and has tons of opportunity for failure. Some people like to play it safe. Don't be one of those people :)
have you used an industrial engineer to streamline your production process? used lean or six sigma manufacturing tools? just wondered because highly manual operations like yours generally benefit a great deal from having someone with that experience map out and recommend changes to your workflow.
I haven't. I find that stuff really fascinating. My dad was in charge of monitoring all ordinance that was in Iraq for the Marines for a year or two and he's given me great advice for that kind of thing. As it stands now our inventory is automated with a decent algorithm determining what we need to have on hand at anytime and placing orders with vendors. Our workflow has been trial and error and I'm sure we could use some expertise.
Got back from a month long trip to Japan in late May, and I miss it something awful, especially the food. Also, the vending machines everywhere. I couldn't afford to bring back many snacks with me, so I'm really looking forward to replenishing my dwindling supply!
Thank you so much for giving me the opportunity to bring a little bit of my temporary "home" back home with me <3
My question: What is your favorite food item from Japan?
It's my pleasure! Thank you for your interest! I don't think i've ever disliked something from Japan besides Squid jerky. Top faves are Matcha KitKat's and Puru Mocchi (Grape).
Have you done a pack from Australia yet? Tim Tams, violet crumbles, milo, cherry ripe, twisties, fantales, lamingtons oh and yeah more Tim tams
Good jon, that's pretty impressive! How much did you invest in your business at first?
SnackCrate was started on a meager budget of $7,000.00. It has been bootstrapped from the start with no outside investment of any kind.
Is your website suddenly under a huge amount of load?
If you hae not already, do you plan to go public?
Im not sure. I want to do what's best for this company and our employees. I'm very apprehensive about outside influence on this company.
have you thought about accepting Bitcoin? virtually zero cost to setup and would introduce a new revenue stream.
We accept BitCoin :)
Have the new notifications algorithm lowered your reach on Facebook??
Meh. Idk. For a business, Facebook is basically "Pay to Play" and it works great for us.
If you want to do it... Do it. Most business ideas never get off the ground because people don't even try. Even if you only get started, you're one step ahead of almost everyone.
One thing I would caution is that if you're looking to make a quick buck don't start a business. Almost all business's that I know of that start with money as the prime motivator fail.
Do you have an open position for snack testers to travel the globe and find the best of the best snacks? .... because I want that job!
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