Eli Zauner runs a subscription box service called UniversalYums.com which sells boxes of yummy treats from all over the world. What’s cool about Eli is that he launched his business while working full time and his business has been profitable from day 1 and is growing very quickly.
In fact, he is doing a solid 5 figures a month after only launching just 8 months ago. And here’s the kicker. One of the main reasons I wanted to have Eli on the show is because he grew his business using Reddit as his single largest source of traffic.
Eli’s experience is truly unique and I love that he’s grown his business so quickly in such a short period of time. Enjoy the episode
What You’ll Learn
- What the startup costs are when launching a subscription box service
- How Eli validated his business idea
- The hardest part about running a subscription box service
- How Eli got his early customers
- How to market your online store on Reddit
- How to adapt to the Reddit culture
- How to reduce churn for your subscription box
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Other Resources And Books
Now if you enjoy this podcast please leave me a review on iTunes and join me for a free live workshop on ecommerce which I give on a regular basis. For more information about the workshop, go to mywifequitherjob.com/workshop. And if you want to get a jump on starting your own online business, be sure to sign up for my free six-day mini course, where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com and sign up right on the front page.
Now before I begin I just want to give a quick shout out to this episode’s sponsor Bigcommerce. Now Bigcommerce is a fully hosted shopping cart that allows you to set up your own online store in minutes. And as most of you probably know, I teach a class on how to start a profitable online store. And Bigcommerce is actually one of the shopping carts that I highly recommend in the class. Now here’s what I like about Bigcommerce. Unlike other competing platforms, Bigcommerce doesn’t really nickel and dime you with every little shopping cart feature. And when you sign up, you merely have a fully featured and extremely powerful shopping cart at your disposal.
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Welcome to the My Wife Quite Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host Steve Chou.
Steve: Welcome to the My Wife Quit Her Job podcast. Today I’m thrilled to have Eli Zauner on the show. Now Eli runs a subscription box that is called Universalyums.com which sells boxes of yummy treats from all over the world. Now what’s cool about Eli is that he launched the business while working full time and his business has been profitable from day one and is growing very quickly. They are doing a solid five figures a month after only launching eight months ago.
And here’s the kicker, and one of the main reasons that I wanted to have Eli on the show, he’s one of the few people that I’ve spoken to that has created a business using Reddit as their largest source of traffic. Now Eli’s experience is unique. And I love that he’s grown his business so quickly in such a short period of time. And with that welcome to the show Eli. How are you doing today man?
Eli: Good. How are you Steve?
Steve: Pretty good. So tell us about Universal Yums, what you are selling, and how you came up with the idea.
Eli: Sure. So I started working at Universal Yums just about a year ago with my girlfriend at the time. And we basically wanted to start a business with a goal of trying to leave our corporate jobs. Neither of us were very happy with what we were doing and we both really wanted to start a business. But being pretty young we didn’t have a lot of savings in the bank. And so we were looking for a business that we could start that would not be very capital intensive.
So we obviously we are aware of subscription boxes and we thought it would be a really interesting space for us to try and get into, because it’s kind of like a trend right now with a lot of new businesses. And it’s also very low capital because you can kind of see how many customers you are going to have and only order inventory for those customers as opposed to like a traditional ecommerce business.
So we really—I mean we set out with that in mind and also it was like a good match for our skills set. My partner is more like a marketing guru and I’m a bit more technical. So it was a good fit for us. And then we basically just took a month and did a lot of research on what existed today, and where we felt that there might be opportunity in the market.
And we kind of settled down on Universal Yums which is– it’s kind of similar to some existing concepts today, but we kind of put our own spin on it. So basically what we do is we pick a different country each month to feature, and we curate different snacks and candies and chocolates from that country. And then we put it all together in a box and we send it out to our customers first each month.
Steve: And so you mentioned that your start off costs were really low. What were they?
Eli: Yeah so I think we spent maybe like 500 bucks just to get like software and just like very basic packaging supplies. But really the business paid for itself after that especially because people when they sign up they give us money for their order, and then we can then use that money to fuel the cash flow of the business. So it was very, very inexpensive for us to start.
Steve: I see. So you collect the money upfront and then you deliver the box next month? So you have 30 days?
Eli: Yeah, right exactly. So what we do is—when we first launched we set our sign up period for about two months before we were ever going to ship products. So everyone that signed up in that two month period, we got all the cash from that and then we could use that to fuel our first month’s inventory. And then from then on it’s month to month. So we get everything that people pay to us the month prior and we use that.
Steve: So what about people who want the boxes to be delivered as a gift right away? How does that work?
Eli: So unfortunately for them we only ship once a month. It just kind of works with that kind economies of scale of our business, because we want to do all the fulfillment all at once with all the products and we don’t want to be placing orders repeatedly with our suppliers. So I mean yes people are willing to buy gifts, but the gifts won’t be delivered until the day of the month that we are shipping.
Steve: Okay, and so you mentioned, so $500 and you mentioned software was part of that. What platform are you using? Are you using like a fully hosted platform or a custom coded platform?
Eli: So we started out on bluCommerce using bluCommerce subscriptions. And I mean it’s very, very cheap compared to other subscriptions like recurring billing solutions. It’s been good so far, but I actually think that we are going to re-platform pretty soon just because it’s not a hosted solution. And I end up spending a great deal of time kind of managing the website, updating it, security, all those things. So we are trying to focus on really growing the business and it’s tough to keep up with that at the same time. We are probably going to re-platform.
Steve: Just interesting, yeah which platform are you leaning towards, just curious?
Eli: I think right now I’m leaning towards using Shopify and then integrating with a like a third party of recurring billing solution, like Chargify or Recurly.
Steve: And then you mentioned that you run through a bunch of different ideas for boxes before you settled on treats. So two questions, what were some of those ideas and how did you kind of validate Universal Yums before investing money in the project?
Eli: So I mean we came up with a really wide variety of different ideas. I mean we came up with everything from like a more localized like experience-based—it wasn’t even really a subscription box idea, but where we were kind of how people like interact and kind of like—almost like a murder mystery type style, where we would send them like a clue and then they would give the clue to somewhere they would go in town. And then we would have another clue set up there and will kind of lead them through, and then basically everyone would be competing to reach the end of the mystery first and we would have a house full of fries. I mean honestly it was very fairly. We just kind of jumped all over the place before we settled on Universal Yums.
Steve: So how did you know that Universal Yums is going to work? Like did you test the idea before you started or?
Eli: So honestly we did some like very basic stuff. Like we posted a survey on Facebook with a couple of different price points and we got – and I personally read as well – we got maybe like a hundred responses. But it was all very qualitative at the beginning. I mean really of course we talked to people about the idea and thought that some people had interest in it. And I think honestly my biggest opinion is that if you have other businesses that have like a similar concept and they seem to be doing well, the idea is already validated. So really at that point it just comes down to the price point and the specific executions of what you are doing. So we felt like the idea was solid enough, because other business were already doing something similar and in our own twist we could kind of make a niche for ourselves.
Steve: Interesting. So what businesses were you comparing yourselves to that did similar things?
Eli: So there’s an adventure funded business called Try the World, which is similar in some ways. They don’t just send snack items, they kind of curate different food items. It could be anything from like ingredients to spices, everything like that. And they feature a different city. It’s subscription box. They do it once every two months. So that was probably the closest competitor to what we are doing today. And then there was another business called MunchPak which is completely snack focused, but they don’t feature a different country each month. They just kind of send out unique snack stuff within the US and all over the world.
Steve: I see. So given that, you saw that these two services were making money and doing really well. You felt really comfortable with your business model basically?
Eli: Yes correct.
Steve: And then you mentioned you sent out some surveys on Facebook. Was this a Facebook page that was tied to your business, or was this your personal Facebook page?
Eli: No just personal Facebook page, and more so just seeing if friends would be interested in the idea or not.
Steve: Okay. And a couple of questions also, what are some of the huddles of running a subscription box business versus just kind of regular goods selling online? I know we just kind of touched on that, and you liked the cash flow aspects of the subscription box. But what were some of the other considerations that were in your mind?
Eli: Yeah I think for us the biggest issue is that when we are more working with suppliers, suppliers are set up to work with businesses that are just selling items on like a normal basis. And the biggest problem for us is that suppliers don’t seem to understand that if we don’t have the item by a certain day, that it’s a really big deal for us, because then we have to delay our shipment, or we have to find a substitute at the last second.
So I mean the biggest huddle by far is saying like “Hey, if we don’t get the item by this day, it’s a really big deal.” And suppliers don’t seem to understand that because for the most part—I mean our suppliers are mostly working with ethnic groceries. And so if an ethnic grocery doesn’t have an item on the shelf for a couple of weeks, it’s not going to kill their business, but for us it’s huge deal. And really making people understand that is really difficult, because subscription boxes haven’t really permeated the market to the extent where everyone we are talking to understands what we need. And so we have to be really-really specific and clear and reiterate it over and over again.
Steve: So do you ever have any problems with getting wholesale pricing because you can’t — can you promise a certain amount of [inaudible 00:12:12], since you’ve already collected the money. Like how does the pricing work, and how does the negotiation work with the vendor?
Eli: Yeah, so I mean we get a wholesale pricing no problem, I mean they basically have like — they have pretty set prices. I mean it’s like; it’s a pretty well defined industry at this point. I mean the companies that are importing the products like we can look at the same product across five different suppliers, and the price—we are not getting more than like plus or minus 10%. And the food industry is just probably like it’s pretty set.
Steve: Okay, and what are the margins typically for food item, just curious?
Eli: Yeah, I mean so if you are like operating a grocery store, unless you are like [inaudible] [00:12:50] food typically retails for like roughly like 30% to 35%, kind of 40% or 45% margin.
Steve: Okay, and then in terms of actually getting the box in place, you don’t actually tell the customer what they are going to be getting right, it’s kind of like a mystery box?
Eli: Yeah, I know so we try to keep the onus of price, we think it’s fun. What we do is we include a hint to the next country. So will do like a little like a poll that runs, and then — most people will be able to figure it out based on that, and then a little bit closer to the date that the box is going to be sent, we will announce it on our Facebook page, just to get people excited.
Steve: Okay and then so your primary motivation for going the subscription route is one, the recurring revenue and also the fact that you don’t really have to carry inventory, is that accurate?
Eli: Yeah, I know it’s true, I think — I mean I think the other reason though is that it lands really well to what we are trying to do. I mean we are like – it’s kind of an experience right, so you get the box and it has not just the snacks, but it also has a bunch of information about the country, some history, some facts about the snacks.
And so it’s kind of like for a lot people, a fun way to learn about the country without having to be like reading a text book. And so it means well to be a monthly service because each month you can kind of focus on a different country, and try their food, learn more about their culture. So I think that it would be difficult to run and just kind of like a one off service just because the recurring revenue wouldn’t be there. And you would have to be holding on this inventory for a lot of different countries all at once.
Steve: So is it just you and your partner, because it sounds like there’s some editorial stuff that goes in with the box right? Someone’s going to write the content that sort of thing?
Eli: Yeah, so I mean my partner writes the content for the box and right now it’s just us. So yeah I mean it’s a lot of work.
Steve: So okay let’s talk a little bit about just kind of the — how you got the word out early on. So let’s say you just launched, how did you get your early customers?
Eli: Sure the first way that we really got traction was honestly on Reddit, that was our first big traction. And really what happened there is I posted the product onto a sub Reddit called ‘shut up and take my money.’ And it has like about 200,000 subscribers. And I mean really with Reddit, on that sub Reddit it’s [inaudible 00:15:05]. So I mean if you get a lot of up votes, the post gets a lot of visibility, lots of people see it, lots of people click on it. And if people don’t seem to like the product, then you won’t really get much out of it. So for whatever reason our product got a lot of traction, I think it was very appealing to that specific community.
We were the number one post for about 24 hours and over that 24 hour period we got about 10,000 people that clicked on the link and went to our website. And we got about like 100 to 150 sign ups off that. And that was kind of our very first like push which is great, we were very excited about it. And I mean before that, like the only other real traction that we got coming up to our launch was through basically what we call like influencer marketing. So reaching out to bloggers, You Tubers, people who enrolled like receive a free sample of the product, and then review it either on camera for YouTube or just write about it for a blog.
Steve: So can we talk about — how did you know about that sub Reddit ‘shut up and take my money’?
Eli: Yeah, so I mean I’m a native Reddit user, like I do it personally just for fun. I never really personally browsed that specific sub Reddit, but I mean I know that Reddit is such a massive community, and I knew that the product would land well to the community. So I spent some time just like researching what different sub Reddits would be that would be open to like hearing about my product. And I found that sub Reddit, also a few others.
Steve: How do you do this research? Do you just kind of type in like treats or in Reddit search, like how do you find these sub Reddits?
Eli: So I mean there’s a few different things, so I’ll kind of walk through a little bit how like I would not just me specifically, but how I would advice someone to try– how to use Reddit. So first of all there’s like obviously the generic shopping Reddits, so ‘shut up and take my money’ is generic, it can be any kind of product. And there was a couple others like deals for example, where you post a product that’s on sale.
And when we first launched, we put our product on sales, so it was appropriate for us to post it there. And there was kind of like just like the generic, wherever your product is you can post it there. And then there’s more like industry specific sub Reddits.
So for us there was this sub Reddit called snack exchange, which is pretty interesting and it [inaudible 00:17:26] existed honestly. It’s basically people who from all over the world send each other boxes of snacks, who live in different countries. And so they get — it’s basically our business, but it’s like they are actually legitimately selling snacks to each other from all over across the world.
So that was I mean — there was like 35,000 people on there. And there’s honestly sub Reddits for just about every industry. I mean if you have a health product, there’s a sub Reddit called fitness that’s really big. If you sell watches there’s a watches sub Reddit, so pretty much every industry has a place where people who will be your target audience are hanging out.
And I mean you can introduce them to your products, but you just have to be careful about not doing it anyway that’s like very commercialized. So Reddit really doesn’t like when there’s like companies trying to get them to buy their stuff. And so you really have to do it in a way that doesn’t feel like you are pushing your product, but you can do it and you can do it really successfully, you just have to be smart about it.
Steve: Okay, so can you walk me through how one of your posts looks like?
Eli: Sure, so for example our snack exchange, one of the ways that we try to engage with the community, is to have like a giveaway. So we figured people on that community are like really interested in receiving international snacks. So we posted like a giveaway on there and people could sign up for the giveaway, and we collected email addresses etcetera. And that was like one easy way to do it. Another way though is to do something like for my specific business; I would post something and like a country specific sub Reddit, you know like hey, like I have this business, I’m really interested in what the best next song from France.
And then people would engage with the post because people want to tell you about the often snacks from their country. So that’s, I mean you basically just have to find organic ways of interacting with the community. And it really depends on the product, like if you have a product that you think solves a specific problem, then go on the sub Reddit where you think your target audience is hanging out.
And ask like, “Do you guys feel like you have this problem, and how do you solve it?” And then engage when people say, “Hey, yeah I have this problem.” They are like, oh, well, I found the solution it’s this product here. So people really look for ways, people will really engage with you when you feel like you are offering something that’s helping them solve their problems.
Steve: So does it require like a strong Reddit account to get any sort of attention?
Eli: No, not really not at all. I mean I honestly started a completely new account for the business, just because I wanted it to be not associated with any of my personal Reddit accounts. And people don’t really check on that very much.
Steve: Okay, because I used to have a pretty strong Reddit account, but then it became a zombie. Maybe I just did too much self promotion who knows. But I remember like having someone with a strong account post made it much more visible. And I guess this doesn’t apply to the Reddits that you were using, the sub Reddits?
Eli: I mean on Reddit, the only reason that your account — I mean Reddit keeps track of how much like how many votes you’ve gotten, it’s called karma. And the only way that that really apply like will affect anything that you do, is there is someone who is checking out your post history to see if you go spamming stuff about your business. So I mean Reddit’s rule of thumb is that no more than 10% of what you post can be about your website or your business or whatever it is you are trying to promote.
So what you should do is you should make sure that you are interacting with a broad variety of audiences, and that 90% of what you are posting has nothing to do with your business, because then you fall within the guidelines, and you won’t get banned or get in trouble.
Steve: When you are posting about– on these other sub Reddits and you are asking for information, those don’t count as you promoting your business, right?
Eli: No, no they don’t. I mean as long as I’m not linking to my website or pushing my service then people won’t take it that way.
Steve: Okay, and for that sub Reddit though the ‘shut up and take my money’ one, I looked at that one in particular, it looks like you just kind of posted your product on there, was that just the etiquette for that particular sub Reddit?
Eli: Yeah, I mean you are actually not allowed to do anything other than post what the product is in the title. Like you are theoretically not supposed to say anything about like the price or anything more except literally just the product name. And it’s just only supposed to be a link to the product, otherwise it will get removed.
Steve: So can you tell me a little bit about the personalities that are on that particular sub Reddit, because it sounds like that one is like generic one that applies to a lot of people right?
Eli: Yeah, definitely it is, I mean so in general Reddit is predominantly male, so and it is predominantly younger men. So I mean honestly it’s kind of a community where your product has to be really targeted towards them. Luckily for us I mean younger men eat lots of snacks, and I mean [inaudible 00:22:14] are more likely to be into things like technology or video games. And so it just happens to be a market that really fit well with our product.
Steve: I see so if you have like a product that’s more feminine that sort of thing, it probably not going to work well in ‘shut up and take my money’?
Eli: Yes, I mean less likely to work well. I mean there are other sub Reddits that are more appropriate for that, but yes probably not going work as well.
Steve: And in terms of finding the Reddits, how many — how did you find the shopping ones in particular, where you just post the product, and then people would like it or they don’t?
Eli: Yeah, I mean honestly just exploring around this big site, like Reddit search function is pretty terrible, but if you just Google search different things like Reddit shopping, Reddit products, Reddit sale, or whatever, then you’ll eventually poke around and find there are more active sub Reddits.
Steve:Okay, and then you mentioned giveaways as a way to kind of give back to the community, were there any other posts that worked well for you?
Eli: Yeah, so I mean obviously giveaways were useful, because people think that you are giving them something, but there’s a couple of other things that we did that are useful. One is you should really find your competitors if they are on Reddit. You can do that just by kind of like searching for their products and their website and seeing if they are posting anything about it. And every time that your competitors are kind of posting in a conversation that’s giving some traction and you feel like you have something to add, then you should engage and say hey, my service does this too and this is how we do it better.
So we actually had a competitor that launched by doing an AMA on Reddit, which is kind of when we say hey this is my story, this is something interesting about me, ask me questions about it. And for whatever reason Reddit took a lot of interest in this particular person. And it blew up, they were the number one post on AMA for like a day, and AMA is like a huge sub Reddit. So I mean they were probably hitting on 100,000 new websites and so after that, it’s huge.
And I mean the only– the way I found out about it is I was looking at Google analytics and there was like 300 people on a website, and I was like that’s very strange and it was all coming from Reddit. And someone had just mentioned us in a comment on this thread, and so by– I went down there and joined the conversation, and through that experience and just being mentioned in a thread I was popular, we got like over 150 website sign ups.
Steve: Holy crap, okay so do you recommend doing an AMA, did you do an AMA after that for yourself?
Eli: I didn’t, I really feel stupid about it honestly, because if we could have had the same sort of success that they did, it would have been fantastic, but lots of people when they start a business they do an AMA. Most of the time it doesn’t do anything, I guess for whatever reason this particular person’s story was interesting to people, and so it got a lot of traction, there’s really no harm in doing an AMA, especially if you have like an interesting back story to your business as a really—it’s like your personal life, then you should do it, there is nothing major [ph] can come out of it.
Steve: So are you– like if you were to do an AMA, would you just set it up and then send traffic to it, or does the traffic just kind of come naturally on Reddit?
Eli: It will come organically on Reddit, I’ve never like done anything outside of Reddit to try to get traffic to my Reddit posts.
Steve: Okay, and in terms of just the success that you’ve had on Reddit, what are some of like the conversion numbers and the traffic numbers that you’ve gotten?
Eli: Yeah, so it will all kind of depend on where it’s coming from, on the shut up and take my money sub Reddit, we were converting like just above 1%.
Steve: That’s incredible.
Eli: Yeah, I mean it’s nice, the thing is on that sub Reddit there is no further information that’s available, you literally can only click the link. So it obviously– it makes sense to me that my conversion rates would be a little bit lower, because there is nowhere else that you can find out about that other than just clicking the links. So you get a lot of people that are clicking the link just to see what it’s all about, they don’t necessarily have a large purchase intent.
And then in other places like for example in like the snack exchange sub Reddit when we’ve done, our conversion rate will be a little higher, may be more like 2%. And then when we got put in that AMA and the comment was there, I mean those people have like very little purchase intent when they are just reading something very generic on sub Reddit, and so it will be more like 27%.
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Steve: And how much traffic are we talking about here?
Eli: I mean for the shut up and take my money post, both– I’ve done it twice now, and both times I did it there was about 10,000 unique group visits and then…
Steve: In like a day?
Eli: Yeah, in a day.
Steve: Holy crap, okay.
Eli: And then the AMA was about 15,000.
Steve: So how many times can you do these things on the shut up and take my money, you said you did it twice like what’s like the etiquette for how often you can do it?
Eli: Yeah, so on this sub Reddit the rules that can– if you are the creator of the product, you can’t post more than once a month, and we waited actually eight months. So we posted it right when we first launched, and then we basically wanted to give it a long enough time to ever and we completely forgot about it before posting, because if you can’t spare, I mean the sub Reddit people will frown upon that. But if you are posting different products, then once a month is fine, if you are posting the same products you should wait a little bit longer.
Steve: So just curious, have you tried Reddit advertising as well?
Eli: I haven’t, I’ve read a lot about it, and from what I’ve heard for the most part, people don’t seem to really having too much success with it, but I’ve not personally tried it.
Steve: So you’ve only done that one particular sub Reddit once every eight months, but you mentioned that Reddit is one of your primary sources of traffic. So how do you kind of keep it going if you can only publish every now and then, does that make sense?
Eli: Yeah it does, so there are a couple of other things that we’ve done, so for example best sub Reddit snack exchange, it has on Reddit each sub Reddit has like a side bar that typically has just read in a piece of information, like the rules of the sub Reddit, other related sub Reddits, things like that. And on a specific sub Reddit it also has like links to basically subscription box companies that have products that the people might be interested in. So we messaged the moderators about sub Reddit, and we had our product posted on that side bar. So that’s the source of sustaining traffic for us, because it’s always there regardless…
Steve: You don’t have to pay for that link, it’s just there forever?
Eli: No, correct.
Steve: Amazing. Okay, how did you negotiate that?
Eli: Honestly it was very simple, I just messaged the moderator, he didn’t respond, I followed up and then he finally put it up right there. Depending on the sub Reddit, if they have something like that, then you can definitely message the moderators. People on Reddit, I mean they like to see people who are like active Reddit users. You have a business. So if you are nice about it and you approach them, they will probably help you out.
Steve: And they can tell—so what is your comment [ph] at this point with that Reddit account?
Eli: Like 1500 or 2000 or so.
Steve: Okay and does that factor in whether you can get on one of these side bars or…?
Eli: Yeah I think in general, anyone who is like a hard core Reddit user will look at your [inaudible] [00:30:32] and your post history and your comment history. If you are like a really active user that is engaging with the community on a variety of different topics, then people will be very willing to help you out.
Steve: And this account is not your own personal account, right? This is your separate business account. You just kind of developed that kind of over time?
Eli: Yeah I mean honestly when the posts are successful I get a lot of comments from them because there’s a lot of up-posts. And it doesn’t need to be like little things every time. They can just be like a few big successful posts that add up quickly.
Steve: And then how many of these companies are actually on these side bars? Is it just yours or there are a whole bunch?
Eli: There’s like ten maybe on that specific one.
Steve: Okay. And so that’s one source of traffic. Are the other ones like kind of more manual in terms of like getting traffic from Reddit?
Eli: Yeah so one thing that’s nice about the Shut Up and Take My Money is that what people will frequently do is they’ll sort it by top. So Reddit is like– their normal algorithm basically demotes posts over time after they’ve been up for a while, so that fresh content always rises to the top. But you can also sort sub Reddits by top over a period of time. So I can say like “I want to look at the best 25 posts over the last you know.” So what happens is if your post has been very successful then when people sort by top, it will still be up there even though maybe three months have passed.
And this is really great especially when people are coming up to the holidays, because that’s one way that people will book for a gift ideas, is they’ll to something like Shut Up and Take My Money, or sort by top over the past year and then also look at the top 25 posts, they’ll say, hey I think blah, blah, blah would like this particular product. So honestly that’s sub Reddit even though we are not on the front page or anywhere near it, it still gives us a lot of traffic.
Steve: Any secrets to getting one of these Reddits to the top? Did you do anything or was it just you posted and that was it?
Eli: I mean honestly, it’s just about the product and crafting a good title. I mean I think that one thing that helped us is that our concept can be very easily explained in about ten words. I mean what we posted was snacks from a different country delivered monthly. So if you have to find like a very concise way to explain the appeal of your product, because that’s all that people are going to see. And then beyond that, just make it really easy for selling the by the products. Like we linked literally to the product page, the person has to click like one button and then they’ll check out.
So people on Reddit aren’t patient. Make it very easy for them to buy the product. And then obviously like people will comment on your post. Make sure you engage with them, don’t just post it and then go away. I mean respond to people’s questions, provide more information about the product that people are interested, and that will instill more trust in people about your product.
Steve: Okay. So what other advertising mediums have you tried besides Reddit?
Eli: I mean the other place that we found the biggest success is kind of like You Tube and bloggers. So we actually got really lucky. Our biggest You Tube success was not from something that we initiated. There’s a famous video gamer guru called TotalBiscuit. His wife actually was just like a customer of ours. I don’t know how she found our products, but she did and she signed up.
And then they decided that they would film TotalBiscuit trying all the snacks from the different country each month and post a video to You Tube. I mean goodness knows why they decided to do that, but I mean it was fantastic to us. I mean each of those videos has like around 200,000 views and drive a lot of traffic to our website. So that’s great obviously.
And then obviously we have like also engaged in some of the You Tube marketing ourselves. So really what we do is we look for people who we think would be a good fit for our product. People who do like product reviews and people who have like a lot of enthusiasm, who we think will be like fun to have try the snacks because you know our product is very fun.
And then we reach out to them and we say hey, “Can we send you a free box that you could review on your YouTube channel?” And sometimes they say yes, sometimes they ask for money and at this point we are not willing to pay them. So we just say, “Could you do it for free?” And a lot of times they will. And we’ve probably gotten 15 or 20 people to do that. And it definitely drives a lot of traffic to the website.
Steve: So how do you reach out to this people? Is it just the You Tube contact link?
Eli: Yes, so I mean they’ll typically provide like an email address for business purposes that you can reach out to them through. There’s also a website called Famed It which we don’t use. But that’s basically if you want to pay for You Tube marketing you can do that. And I mean what we found is that you kind of have to craft the story a bit. You kind of have to talk about like, maybe watch five to ten videos, get a feel for their personality, get a feel for their back story. Make more of a personalized email.
I mean our business receives like 10 emails a day of just xyz blogger that wants to feature our product, but they don’t ever say anything about our business, and we don’t feel like they’ve researched us. So I mean it’s really important to make the person feel like it’s just not a spam email that you are sending to hundreds of thousands people. You know really craft the content in a personalized way and that will make your response rate much, much higher.
Steve: Hey Eli, I’m going to ask you a very selfish question now. Let’s say you run like a wedding linen store for example, is that Redditable or not?
Eli: Yes but only in weddings specific sub Reddits, and I guarantee you there is a wedding specific sub Reddit.
Steve: Okay so that implies that there’s females on that Reddit– sub Reddit?
Eli: Yeah there are. I mean Reddit is predominantly male, but there are also plenty of places where women are more likely to frequent. Reddit is very diverse and luckily they’ve already done the segmenting for you by breaking it up under sub Reddits, so really no matter what your product is, if you spent some time poking around, you’ll find places where people that are your target market are hanging out, I guarantee that.
Steve: And so what would you recommend a giveaway, or just asking questions like what would you recommend doing?
Eli: There’s really two ways that I think would be useful, one is just market research. I mean looking at the ways that people are interacting, like the kind of questions that they have, the problems that they’re facing. Those are really-really useful things to know for your business. Then secondly just engaging with them, I mean yeah you can run giveaway [inaudible] [00:37:00], but also just looking for people who got a problem that your product solves and talk with them about it, and seeing if your product could be a good fit for them.
Steve: Well is it okay to mention the product though?
Eli: Yeah it is. So I think that one thing that really helps in that regard is if you don’t just mention your product, but your mention your product and maybe like one to two other competitors. People really like when you feel like you’re giving them information to help them rather than pushing your product. So that’s one way to kind of like disguise your actual intent and people will react much more positively towards that.
Steve: Okay, and then back to just kind of your business what are some of the logistics of running the box company, like how do you get products for your box, kind of how the economics work, and how do you decide how much to charge that sort of thing?
Eli: Sure so in terms of logistics every month we work with a variety of different suppliers. Obviously because we’re featuring a different country each month, it’s very difficult– it’s basically just a supply chain challenge because we have to constantly be making contact with new suppliers that have new products for us. So I mean we do a lot of different things to find suppliers, we went to a trade show last month, and we’re going to one this month and that’s a good way.
We do a lot of Google searching, which is quite useful, but it’s also can be very difficult because a lot of suppliers especially in this particular industry are not online at this point. And then one other way that we do it is by kind of reverse engineering. We have like a local international food store that’s really great, and we kind of see where they’re getting their products from.
And then obviously we do like a lot of research just by asking people online who are from the different countries, like what are your favorite snacks, we have personal contacts with people who live in different countries, or were born there and they can tell us what they like the most and then we try to find those products.
Steve: So it always means contacting the distributor right or the manufacturer?
Eli: Yeah so I mean right now we don’t actually import the products ourselves, that’s probably somewhere our business is going to head eventually. But today we work with the importers and so we basically have to find people who are importing products from that country, and then make contact with them, see what they have available that we could purchase that would be an interesting snack or candy. We typically work with like somewhere between two to four different suppliers each month.
Steve: It just seems like and I’m not sure how many customers you have, but like the volumes for food that you have are they high enough to actually cause like the vendors to actually care about you? You kind of get what I’m asking?
Eli: Yeah I know I do. At the very beginning it was hard to get the vendors to pay any attention. At this point it kind of depends, some vendors are still just a pain in the butt to work with, but some vendors are actually really responsive now. Honestly, I think you just kind of have to be very confident coming into the negotiation, like when you first make contact be– project very high in terms of what you think you’re going to buy to try to get better service, and I mean only at the very end you actually have to reveal what you’re ordering so.
I think at this point like the useful thing for us is that a lot of our suppliers are selling to ethnic groceries, and so a lot of ethnic groceries are kind of Mom-and-Pop shops, and so they’re used to dealing with businesses that are a bit lower volumes. Like their minimum orders are really only like a pallet or so. So it’s not too difficult for us to deal with them. Now we’re talking about dealing directly with like an oversea manufacturer, they’re probably not going to pick up the phone for anything less than a container full. So it’s a bit more difficult there.
Steve: Okay and then since you’re a subscription box, how do you reduce churn?
Eli: Yeah, I think the number one way to reduce churn is just by having a really awesome product. I know that’s I mean– I think that’s the bottom line, I think if you’re– I think a lot of subscription business have a reputation for kind of starting off really great, and then kind of reducing the quality and value of the product over time, because they’re trying to make money, but then as a result their churn goes way up.
We really try to focus on putting all of the value into the product itself and not spending any money on paid marketing. I mean pretty much all the subscription businesses have like your first box is free or it’s half off, and like you can get referral credits by referring people, and this and that the next thing. And instead of doing any of that we basically price the product as low as we can to have it be like sustainable for us, and then we put all the value back into the product. So we honestly just try to make the best product that we can, and people stick with us because of it.
Steve: Here’s what’s interesting, when I was looking at your site it seems like every month a box costs a different amount. So when someone signs up are they just signing up for an open ended subscription where you can charge them any amount between a certain dollar amount, like how does it work?
Eli: Yeah so the cost that they pay to us is consistent month to month, so I mean we offer the larger box for $25 and the smaller one for 13, and that never changes month to month. Obviously our cost changes month to month. So I mean it’s really just a balancing game, one month we make like we’re making very-very little, because the products are very expensive, maybe it’s from like a European country and it’s more like fine chocolate some things like that, and the next month maybe it’s an Asian country and the products are a bit cheaper, and so the margins go up. So it’s just kind of a balancing game for us.
Steve: So when they sign up, it’s like an open ended subscription, they actually have to cancel it in order for it to stop coming right?
Eli: Yeah I mean so we’re offering both subscriptions like you said they operate exactly as you just explained, and then we also offer gifts which is basically it has an expiration date, you pay the full amount up front.
Steve: Okay and so you basically have like a 30 day peak into the future in terms of how much you need right 30-60 day?
Eli: Yeah, so I mean at this point we have a pretty good idea of what our trend rate is. We know how many subscribers we have today, and then we basically have to estimate how many sign ups we’re going to get into the future. Unfortunately at this point we have enough volume that we really have to start ordering products two to three months ahead of time. So we’re projecting pretty far out into the future relatively for us at this point.
Steve: So do you do any other sort of marketing like email marketing or like when someone says they’re going quit do you have some sort of sequence in place that will try to keep him to stay, or anything along those lines?
Eli: We don’t right now. I mean pretty much every subscription business does and it’s something we’ll probably be implementing in the future, but now I mean right now we don’t do any email marketing. Honestly, we right now we’ve kind of consolidated our efforts to the channels that have been the most successful for us so far, because we’re being able to grow the business that way. And since it’s only a two person team we kind of try to stay focused on that. I mean really for us it’s like social media, bloggers, that have been the most successful, because the product itself is pretty like interesting for people to [inaudible] [00:44:18]. So that’s what’s been the best for us thus far.
Steve: So outside of Reddit and reaching out to influencers, have any of the other social media platforms been good for you?
Eli: Yeah, so I think Facebook has been good for us, but not in terms of like customer acquisition. I feel like Facebook honestly for most people is just a place to kind of like maintain the community and to interact with the community, and that’s how we’ve used it. Twitter I think can be a way to acquire new customers, but it’s kind of like ground work. I mean one thing that we tried early on was kind of like tweeting out to people who were mentioning, interacting like international snacks in their twitter conversations.
And I mean that it works, but it’s like it’s very slow and very time consuming. So Twitter for us at this point is just a way that if a customer has a quick question [inaudible] [00:45:12] respond. And then right now I think we’re going to start focusing on Instagram and Pintrest, because I think our product is pretty visually appealing. I mean the packaging is interesting, and the products themselves are pretty interesting, so I think that will be some good platforms for us to work on.
Steve: Interesting, and then it sounds Reddit is kind of low maintenance at this point it sounds like right?
Eli: Yeah, I mean it is. I mean the thing about Reddit is that you just have to be monitoring it, like I said we kind of check on what our competitors are doing like every few days, and just see if there’s anywhere that we can hop in. But Reddit is more about like looking for the right opportunity to post something, looking for the right opportunity to jump in and get a big win, rather than every single day grinding it out in very small amounts.
Steve: Okay, hey that’s really helpful Eli. For all those people who are interested in getting some yummy treats from other countries where they can find you, and where and they buy a box?
Eli: So we sell only on our website which is Universalyums.com. And like I said the larger box is 25 bucks, the smaller one is 13 and you can cancel it anytime.
Steve: And what do you get in each box, just curious small versus large?
Eli: Yeah so the small box we say is six or more snacks, but most of the time it’s more like eight or nine. And the larger box we say 13 or more most of the times it’s like 14 or 15. We try to include like a variety of different flavors, so like sweet stuff, salty stuff, spicy, some like smaller candy, some bigger treats, so we try to put a lot variety into the boxes.
Steve: And if anyone has any questions about just your business in general, do you have like a Twitter account or some place where they can reach you?
Eli: Yeah we own the Universalyums twitter handle, you can also email me if you have any questions, the email is just firstname.lastname@example.org.
Steve: Awesome well thanks a lot Eli, thanks for coming on the show, I learnt a lot today about Reddit especially.
Eli: Thanks Steve, thanks for having me.
Steve: All right, man take care.
Eli: You too bye, bye.
Steve: Hope you enjoyed that episode. Before talking to Eli I would never have guessed that Reddit would be a great place to advertise physical goods online. I guess I’ll have to go try it now and write about it on the blog. For more information about this episode go to Mywifequitherjob.com/episode81, and if you enjoyed this episode please go to iTunes and leave me a review. It is by far the best way to support the show and please tell your friends, because the greatest compliment that you can give me is to write a referral to someone else either in person or to share it on the web.
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Outro: Thanks for listening to the My Wife Quit Her Job podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.