Subscription Box Goldmines: Paul Jarrett on Vitamin Samples to Candy Empires

I truly think that subscription boxes are one of the most effective marketing tools out there if you have a great product and nobody is leveraging it.

Welcome to the High Voltage Business Builders Podcast, a show where we interview high voltage entrepreneurs growing and scaling through e-commerce, real estate, and other wealth without Wall Street ventures, showing you the path to making your first or next million.

All right, folks. Welcome back. Yes, we are back on the High Voltage Business Builders podcast. And as you know, we talk about all kinds of opportunities in business. We talk about the e-com, we talk about sales and building and wealth preservation and anything wealth without Wall Street stories and case studies and opportunities to get to know folks. And I met this gentleman last year and the business he's doing out of Nebraska is always fascinating to me because one of the things we love about business is cash flow, right? Cash flow is king. Profit is sanity and revenues are vanity. Right. And this gentleman knows how to run a business. And so I wanna bring him back on today. Second interview to just talk about what's going on in the world of subscription boxes. Paul, what's going on in the world of subscription boxes, man?

Man, how you doing, man? Thank you so much for having me back on.

My pleasure.

Really appreciate it. I'll tell you what, when it comes to subscription boxes, it feels like this thing that started off as almost like a micro industry.

Yeah.

It's now developing and people are like, creating their own brands. And I'd argue like, you know, the way that we started with BuluBox and doing vitamin and supplement samples, I think what everybody figured out is a subscription box is a really good tool or add-on for your product, right?

Yeah.

Yeah. Or your company, but it probably necessarily shouldn't be the mainstay. So, you know, you see companies like Bark that are going into retail. We've actually had quite a few influencers, YouTubers, celebrities that are coming to us wanting to build their own box. And I painfully kind of find myself saying like, let's do that as a next step. You know, like what's first, what your brand is and what your—

Yeah. Well, now everybody wants to go from that influencer route to the product route and they don't always do it very well. Many of them fail. I actually had a lady on my podcast here not long ago. She launched hers from the affiliate channel and did some videos that popped off and launched her brand. It went great, but she's kind of a bit of a unicorn. You don't hear about that much now. And she's good at the social and UGC side. So she's doing like 30 million views a month promoting what she does and then put the product in because she really knew her audience. But I haven't met many people that are like that. In fact, I've met more people that failed at it than succeeded.

Right. Yeah. We work with, uh, if you're, uh, I say if you're not 15 or younger, this means nothing to you. If you're 15 or younger, you might pass out.

Right.

You work with a YouTuber named Ryan Trahan.

Yeah.

And it was fascinating how, uh, you know, I'll kind of give the short version of the story, but I had a connection to his team and they basically said like, look, I think he's got 15 or 30 million YouTube subscribers. He just got a TV show. What I love about him though, is like, he's very wholesome. Like the things that he does, it's like the nice version of MrBeast, right? Like it doesn't feel like a Squid Game episode.

Someone's not going to get completely ruined.

Yeah. Yeah. So very wholesome, very like down to earth. They wanted to create a low sugar candy. And so I just have industry contacts, put them in contact. And so they out on his YouTube channel and they sell. And I will say that it was a lot of units. They probably won't care. It's over 60,000 units just by him saying one time, buy my candy. And, you know, everybody's kind of like high-fiving and saying good job and whatever. And like, okay, great. And we did all the fulfillment for the product and that was that. And our team kind of like, wait, like do it again. Give it more. And it was like, oh, and I think, you know, the mentality of a lot of these YouTubers, we'll talk at once. But, um, we've since then worked with them and they're on Target retail shelves now.

So, oh good.

Um, the candy is going like crazy. Um, we even working as like doing logistics and fulfillment for them, we get letters from kids begging to get their hands on the candy.

So that's demand. That's amazing.

That is, that is wild too.

Yeah.

Just You're like, those kids are backtracking and figuring it out. I will say we got in trouble with Walmart.

Uh-oh.

We had this idea and I think it might've, I don't know where it came from. It sounds like something I would've spouted off in a meeting as a joke, but they were getting placed on the bottom of shelves, right?

Yep.

And we had this idea of let's give them knee pads to put on the shelf so you can pull out, you know, it's like, hey, sorry, we're located down here. Grab the knee pad. And get on down here so you can like get down on your knees to buy the candy. And it actually got into a bunch of stores and then we got a slap on the hand from Target, but I'm also like, totally worth it.

Yeah, totally worth it. Did what it's supposed to do. Well, the reason I brought you back really is, I mean, you guys have an ingrained knowledge, you have a time in market, and you really see things at the value level, which I appreciate. And as you were mentioning, you know, those who are listening that have brands or are in the brand testing and product launch phase, and you're thinking, okay, how do I take that channel and replicate that result? How do I go beyond Amazon? on? What do I create really from a recurring revenue standpoint? We've talked about the possibilities of boxes and stuff. You mentioned some work and some don't. We joked a little bit about that, but really if someone's considering that, what are maybe the top 3 things they should be considering if they're gonna move an existing brand and product, say from Amazon or Shopify or whatever, and they wanna start that subscription, they wanna start that box side?

Absolutely. So there's 2 main elements, actually I'll say 3. Hopefully I can remember all 3 of 'em. It's been a while since I've had to stand up and Put you on the spot. Yeah, but you know, it's one of those things where lucky to have a team handling that. Now we've done enough where nobody asks questions, right? But in the infancy, and this was based on us shipping over, I mean, millions of subscription boxes, over 50 different subscription kitted type products. We actually had a data scientist that we thought that we could afford to keep, but we had him for about a couple of years. And the data that came back was fascinating about sampling. But the main aspects that we tell people to consider is there's, with a subscription box, there's like 5 different things that you can kind of do with it. And it's acquire, activate, retain, referral, and revenue, right? And we call it our, like, marketing like a pirate. Mm-hmm. Yep. So the more that people focus on one of those things, like, is this box to get new customers? Is this box actually for our existing customers? And we want to use it as a referral tool, which is my favorite, right? Like you can put all sorts of coupons in the box for people to pass with their friends. But a lot of people, I think, view it and think that it can do all of those things. And what happens is your messaging gets really confusing for people, right? So I think that's really important to kind of examine, like, what is it that I actually want this thing to produce? And also why I think it's a great membership program add-on for like, we do a lot of grocery stores. I think that's great for that. Now, when it comes to the actual box itself, what we say is the box experience backed by the data that we have with our data scientists pull together, we call it feel, taste, wow, and then we call it weight. So the feel is, can I open this box and grab something? And it has an interesting texture. It has something that kind of keeps me busy while I'm looking at the rest of the box. Even we found like interesting crinkle paper or glitter or the void fill, the stuffing that goes with the box. That's really important. Also having enough of that to make the box look full, but that really, that element of like opening a box and just handling something, and it might even be packaging, that's really important. Taste also goes with smell. But I remember when we were doing Crayola, like we were spritzing like crayon smell in it, but If you can hit somebody with a familiar smell like coffee or something, that's like a big deal that attributes a lot to the experience.

A lot of psychology that goes into that experience. It's not just a box. You're creating an experience.

Absolutely. That's why we love throwing a soap sample into boxes or any sort of perfume, right? The wow factor is my favorite one, but you really want people to open it up and say, wow, I never knew that existed, or wow, that's a big sample, or Wow, I didn't know this is how that would work. My absolute favorite one, which the company is not around anymore, but we sampled a product. It was called AeroShot and we saw it at Expo West.

Okay.

It was a group of Harvard scientists, all these, you know, super nerdy Harvard suit type guys and all this extreme branding called AeroShot. And it literally said, take a shot to the head. Right. So you're like, what is— and it was a little canister that you put in your mouth and you pull the trigger and what it puffed into your mouth was flavored caffeine. And all— yeah. Insane, right? Like nobody— these guys had everything down except for the actual like marketing and experience. So you can tell they hired an extreme marketing agency and nobody thought that part through.

Right.

Science of it was fascinating because delivery of caffeine basically through your mouth, like sublingual, was fastest way. So it was like basically your morning coffee. And boy, we got a lot of feedback on that one. A lot of—

I bet you did.

You can probably still find YouTube where people open a box and use this powder, would shoot out of their nose. Yeah.

You accept that somebody wasn't quite thinking that all the way through. I get the sublingual part. That works great. I usually see it on like strips and stuff that dissolve and don't have necessarily a negative impact. Please tell me it wasn't like shaped like a gun or anything, right?

I mean, it looked a little bit like the barrel of one.

Oh, see, now we're crossing some lines.

Well, it is like epitome of everything was done correctly, funding, science, sure, stuff. But boy, did they miss the mark on the marketing and branding and all of that, right? So And then the other 2 elements, we just say, wait, a lot of subscription boxes. I mean, to even, not always, because we do some boxes that are like $50, $60, something like that. But usually for the most part, you really want to work to get below that 2-pound weight. So the additional items are really in there to manage the weight, right? And another big secret that a lot of people know, but not all subscription boxes are the same. So, you know, even Walmart, 150,000 I don't know, quarterly or something like that. There's a lot of different products that are put in boxes. So that's why you don't really say like, you know, a lot of companies will try to get matching subscription boxes. It just doesn't work. I actually have never seen a company that's going to produce the exact same thing. There's always something like that. Then the final, like the most important thing, and it's really something that you want to almost the place that you want to start with, because even when we've started with this in Over the iteration and changes and logistics and whatever, very rarely is that also left at the end. And it is simply what drives somebody to be excited to run to their mailbox.

Yeah.

Why am I going to run to my mailbox, right? So, you know, you want to consider the 5 things like marketing, the marketing like a pirate, R, like why does this thing exist? Then the feel, taste, wow, wait, the experience of the box. And then the most important thing overall is what's going to make somebody run out to the mailbox. My kid does, it's called Crunch Labs. I think Mark Rober, it's a YouTuber. Our kids have had every single subscription box you can ever imagine. And this is the only one that's ever survived. Reason that he loves it is he gets to watch a YouTube video of this guy putting together the box. And it's always like a Nerf gun or something, you know, kind of playful for kids. But man, my kid has like a sensor that goes off. He's like, Dad, is it here yet? Is it here yet? And so there's like a week out of the month where he's just sprinting to the mailbox to find it.

To see if it's there. That's the excitement you get.

He'll be tied to that thing forever.

Yeah. Yeah. That's super good excitement.

Damn. If you think you're just gonna throw stuff in a box and it's like, it's just not going to. It's what you're gonna do is you're gonna have a high churn and upset customers. And I've seen a lot of brands actually damage their brand because they pump out a subscription box thinking that it's a good revenue add or whatever, and they actually end up upsetting a lot of their customer base.

Makes sense. So really do your market research and figure out what your customer wants or what customers might want from you. Yeah, market test it and make sure they want what they want or change it up or give or adapt whatever it is they need. And then of course, dial in your packaging and marketing for those customers to make sure they have a really good experience.

100%.

With their product. Yeah.

Yeah. And something that I would, I'd like to add is, you know, I think a lot of people, a lot of brands, a lot of companies, you know, they, subscription box sounds good. I'll say the number one thing that they forget is the customer service form. It's a different beast. Uh, there's a lot of customer service for it.

Yeah.

If I were interested in starting a subscription box, I would put together a plan to go get my product or an individual product in a lot of subscription boxes. I truly think that subscription boxes are one of the most effective marketing tools out there if you have a great product and nobody is leveraging them. But I would also do it a little bit different in that I probably, let's say I had a snack, right? Or a kid, well, I'll just say candy. I'm probably not gonna go to the snack and the candy boxes. I'm probably gonna go to something like, uh, you know, like the CrunchLabs or like a subscription box that still goes to the audience and see if— but I know if I can get my product in there, I'm not gonna compete with everybody else. And—

Well, how do people reach that level? Like, how do they find these box owners and get their boxes submitted?

Yeah. Yeah. Well, we're one place that does a lot with helping brands find that. We don't do a ton of it, but we like to help out. But there's a great website. There's like My Subscription Addiction.

Okay.

There are actual blogs and YouTubers out there that do a lot of box openings, and a couple of them have listed all of the boxes. Also, I tell people, if you're going to put your product into boxes, out of the gate, they're going to say like, oh, it costs to go in this box. What you do is you want to tell them like, I'll tell you what, I'll give you 5,000 of my product, and the month that you need to fill a gap or you can't find anything, Like, call me up and I'll give you the product, but I'm not going to pay to be in your box. Probably subscription box companies will hate me for that. But the reality is, the reality is with those boxes going out so much, those sales reps and the people that secure the product, they're always looking to fill gaps.

That's right.

So it's a good idea to just like get out there and tell them like, hey, hit me up like when you need somebody to be in your box. And also don't be shy to ask for added value. Like, Getting in their emails, marketing some information.

Yep. Now, great tips, man. So guys, if you're listening, what Paul is saying, and just to say it in my own words in a different way, there's a list of people out there that you can go do a little guerrilla marketing on and find out who all these box owners are and just keep soliciting them with your product opportunities until you get on their list. I mean, it's just like leveraging UGC content, borrowing their list, borrowing their opportunity. Who knows? You might get your, you know, business and your product into 10,000 more units a year just on a subscription box opportunity you didn't have to create or anything. All you have to do is fulfill the product.

Absolutely.

So there's some super, that's some great tips, Paul, from people today, man. Where can they go check you out if they have questions they want to ask you about subscriptions and boxes?

Yeah, well, we got bulugroup.com and then I also have paulgerard.com. But if, you know, the listeners made it this far and they're intrigued, like I tell people, just drop me an email. I'm pretty good about answering. It's just paul@bulugroup.com. Toss emoji in the subject line. But yeah, I love to connect with people and there's nothing better than placing somebody in a subscription box and it kind of gets them to where they need to get the sales. Yeah. Another sales channel.

And a great way to get into sales channel without a whole lot of lifting. If you've already built or started a brand and you've got a product launch going and you know, you're moving past your 1,000 units or more tests, guys, for those who are listening to this, if you're in your 5,000th or 10,000th unit and you want a new sales channel, it's a great opportunity today. It's a masterclass in 25 minutes, guys. Go check it out. Paul, thanks for coming back on, dude, and sharing that with us.

Hey man, always good to see you. Thank you very much. I appreciate it.

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