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I found this article around a year ago now and thought it was a pretty cool business (they're doing over $1m per month now by the way).
Since they don't ship to my country, I thought why not give this idea a go myself (geographical arbitrage value skew).
We have been operating for around a year now, so if we want to continue, we are going to need to start paying accounting fees etc. So I'm thinking about whether we stick or twist with this business.
Results have been pretty disappointing - around $6.5k in sales over the year. But we do have a core group of customers that seem to love our product and our returning customer rate is 25%. And we also held back on growing the business due to operational issues that we have now resolved (e.g. we were sterilising all jars before filling with peanut butter by hand, but we now found jars that arrive from the manufacturer pre-sterilised).
Why I am considering moving on:
The main thing holding me back from shutting things down is the glimmer of hope that things could change, and it could be the business that helps me achieve my goals. Sometimes a single TikTok or Instagram post can change the entire trajectory of a business. Given that we seem to have some sort of product-market fit, and we're no longer losing money, it feels like there's hope. But I just don't know whether I'm better off pivoting to something new.
Would love to hear from anyone who has ran a CPG brand, especially outside of the US as it's very different outside the US - you always hear about huge CPG exits there but rarely elsewhere.
Since they don't ship to my country, I thought why not give this idea a go myself (geographical arbitrage value skew).
We have been operating for around a year now, so if we want to continue, we are going to need to start paying accounting fees etc. So I'm thinking about whether we stick or twist with this business.
Results have been pretty disappointing - around $6.5k in sales over the year. But we do have a core group of customers that seem to love our product and our returning customer rate is 25%. And we also held back on growing the business due to operational issues that we have now resolved (e.g. we were sterilising all jars before filling with peanut butter by hand, but we now found jars that arrive from the manufacturer pre-sterilised).
Why I am considering moving on:
- Slow growth
- Thin margins - (e.g. this month we are projecting around 20-25% profit after COGS and marketing)
- Challenging to scale - we can likely only produce around 1000 jars per month from out home kitchen, I guess we could make between $2000-2500 from that. If we wanted to go bigger, we would need to hire a commercial unit and staff. It can be done, but it would erode margins further and I think it's a long slog for many years to potentially reach profitability
- Difficult to understand who would buy such a business if we ever did scale with the aim to exit in the future. My goal is to exit a business for $10-20m, but I don't see a path to that event happening.
- I don't enjoy running the business anymore, particularly the manufacturing process I really hate
- I'm not particularly proud of the product, given that it's not healthy for people
- I run the business with my partner, and it's created tension in our relationship at times. We're thinking about having children in the near future, so I can only imagine it will cause further rifts
The main thing holding me back from shutting things down is the glimmer of hope that things could change, and it could be the business that helps me achieve my goals. Sometimes a single TikTok or Instagram post can change the entire trajectory of a business. Given that we seem to have some sort of product-market fit, and we're no longer losing money, it feels like there's hope. But I just don't know whether I'm better off pivoting to something new.
Would love to hear from anyone who has ran a CPG brand, especially outside of the US as it's very different outside the US - you always hear about huge CPG exits there but rarely elsewhere.
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