Congrats. With regards to the customer support thing: this is something that you can very cleanly outsource to an assistant. Write up your current procedures in a Google doc and share it with a VA. Your options include somebody overseas from you (BCC's is done from the Philippines through a company called Pepper - happy with them) or, due to the unique contours of the employment market for rural Japanese women, you may even find someone in Japan with exceptional English but very poor options careerwise.
My wife's friends who do 内職 (work-at-home jobs compatible with e.g. raising kids) work a lot harder than your CS person needs to for less than $400 a month. If you go down that path, they could also do introductory phone calls to candy manufacturers on your behalf.
This is an interesting point, in regards to hiring someone from (rural) Japan to take care of customer service. I suspect a difficulty you would face is finding someone who speaks English well enough to serve your English speaking clientele.
Along this vein, I'm in Taiwan this summer, and it's striking how cheap labor is. An English speaking, sometimes even US educated, assistant costs $600 per month. That's very low, and competitive with higher end VA rates.
But you would have trouble finding labor of that quality on eLance/oDesk/etc. You can get a $400-600 per month VA, but English quality will be relatively low.
I wonder if there is an untapped labor market of quality English speakers in "2nd world" countries who would gladly work from home for $600 per month, but have not been exposed to the opportunities online. How do you tap into that workforce? How do you expose them to a labor sink that is a clearly a net positive value prop? And how do you filter the workers/employers such that both are happy with the arrangement?
You don't even necessarily have to have them be abroad relative to the US -- I just suggested Japan because the business and its suppliers happen to be based here. Bingo Card Creator made, hmm, $1X0,000 off of ~2.5 years of a New Mexico schoolteacher's very, very part-time labor in creating bingo cards. I'd have to look at the books from like 2008 through 2011 but I recall it totally on the order of $3,000 or so -- $100 a month with $100 extra at Christmas.
There exist many people in the United States who have talents which a) have no commercial viability at present but b) would be commercially viable if supported by the appropriate software. Many of them are in situations where ~$X00 a month pings their "Very worth my time to talk about this" radar.
As someone bootstrapping from Seoul, I think there's something to patio11's idea. A related untapped market for recruiting is: Japanese women who came to the US to be with their partners studying/working in the States. The Korean equivalent is something I want to tap into in the future.
Bemmu, thanks for the post. Can I ask which support ticket solution you're using now, and how you like it?
I love the professional product photos and the clear "what last month's box" contained photo on your home page. Some of our merchants @ Cratejoy have been experimenting with including a "last month's" box section/photo and have been getting very favorable results.
I'm curious, what is your monthly retention?
Have you done experiments with box contains and how it impacts retention?
We're starting to run optimization experiments where we take the product inventory and try to optimally allocate it amongst all subscribers to maximize retention. So like month 1 subscribers get the exact optimal set of products to make sure they stay subscribed until month 2, etc.
It's awesome that you are doing product surveys. I hope you do them every month. Have you ever considered sharing the results of your product surveys with your suppliers? Frequently that will be a great relationship building thing, maybe even get you better pricing or free product.
Sending the optimal things to people might be good, but it reduces the community aspect of everyone getting the same thing. It's probably a win to send different things, but at this stage I think I want to keep it simple for a while longer.
Awesome! You're obviously not struggling, but before long it might be worth reworking the site's aesthetic and branding? I honestly don't know at all how much it matters, but I'm gonna throw out some unsolicited design critique in case it's helpful.
- Tragically, King did sink their teeth into the word "candy", so using it in a candy-color outlined gradient logotype strongly evokes mobile games. May not matter, but it sends a mixed message.
- Only use the good photography. If you're shooting in a studio now, you can cycle out all the iPhone shots, which are contributing to a kind of "man-of-the-people candy blog" vibe, versus a "place that will send me awesome candy" vibe.
- Lead with the photography. Right now, if I don't already have an idea of what "japanese candy" is, I'm not excited. It's cliche, but even just changing the title text to lightly shadowed white and sticking full-width high quality candy photos behind it in a carousel would be way more engaging.
- Consider folding the "Are you still active?" section into the title pitch. If this is a concern people have, you don't want them to have to scroll through the rest of the page to resolve it. Could be worth testing something like "Order now to be included in the July 15th shipment!".
- A more broad observation: The service (including the totally adorable "how it works" comic strip) seems to be pitched heavily towards something like American Otaku culture. In my experience, though, classmates would define social groups around being into manga, or wanting to learn Japanese-- but when a classmate would come back from Japan with some never-before-seen candy, everyone was excited.
I am going to throw some unsolicited critique as well, to both your critique and the site.
Bemmu,
I do agree that the aesthetic of the site did not totally give me a lot of confidence. It does look a little amateurish. Seeing the pictures of the past shipments helped up the confidence and the YouTube videos did that as well. While I only watched one video, I think you could include more branding. Throw a 3 or 4 second blurb in the beginning with just your web address and tagline, and maybe a 15 or 30 second message at the end. These videos with show up for people who do Google searches Japanese candy. That's your target market. Also include a little about the service in the video description. I think you are missing an opportunity to be able to add unobtrusive advertising.
I'd slightly disagree with icushman's take on the logo, the photography and who the service is broadcast to. I think King's "claim" on the candy logo is fleeting and probably doesn't have must effect on a customer. The "man-of-the-people candy blog" guy is exactly the sort of person I would order something like this from. I have more confidence thinking this is legit if it is a candy aficionado behind it than someone who is in it for the business aspect. Also, I think that the anime/manga vibe of the cartoon is fine. I'd think that anyone who was turned off by that wouldn't have been interested in ordering Japanese candy to begin with.
Getting back to the web site, I'd say try to highlight the testimonials from other websites more. On first pass, I missed those at the top. Highlight them more, maybe run them across the page as is the trend these days. You also ask people to subscribe before they have seen anything of what the service is.
The "Are you still active?" section implies to me there was a problem. It makes it seem as if customers are asking you questions like, "Hey, it's been a while, am I going to get a box or what" or "You had an interruption in service, did you get back up and running again?"
Finally, maybe have a section for testimonials. Maybe even have your customers send a picture of themselves enjoying the box, preferably outside in a way which shows the different parts of the world you send to. It would speak a lot to legitimacy and even community.
Either way, congrats on passing the $10K MRR threshold, you are obviously doing a lot of things right. Cheers and best of luck!
I put that "are you still active" there, because sometimes when I visit older websites I wonder if they are still in operation. I guess I could show that more indirectly by just showing recent content.
There must be better shipping options available in someway. There are vendors on Ebay in China/HK/Singapore that can ship US$1 items, including batteries, their Ebay and Paypal commissions and free shipping[1]. I have no idea how they do it, but they do.
You could probably shave off some shipping costs by putting all of your packages into one crate from Japan to one of these locales and tranship from there.
I had the same thought. It seems like it would be cheaper to send everything over in one crate and then send it out via local post once it's in country. I wonder if that would simplify customs or make it more difficult.
The odd thing is that international shipping rates are often lower than domestic shipping rates and don't vary much by destination country, so this can be a losing strategy.
International rates are regulated by the Universal Postal Union. Well, the rates that the postal provider pays is regulated, they can charge you as they please. I suspect the rates for the postal providers are just per ton or container, regardless of the number of packages, and in HK/China, they pass on the savings to the sender.
My Square reader came to Canada from somewhere in Europe (I think).
I'll also add that many of my HK/China packages come "Registered". It must be really cheap or free. This can be annoying, and I wonder if it's even optional, or standard.
I suspect there are fulfillment companies that you could inventory with who would have the required volumes per country.....if you weren't doing custom orders (every package is the same each month, or only a few variations) this could work very well. I'd say the revenues are enough that you could even hire a locally based person to do some part time quality control.
Or possibly the Japanese manufacturers/distributors could send the whole batch to some low(er)-cost locale for P&P. It's hard to say whether they'd be more or less amenable to exporting their wares.
I was referring to sending a crate to HK, and then having everything trans-shipped from there because shipping from HK appears to be far cheaper than Japan (which I believe has the highest postage rates in the world). There should be no duties as they're goods-in-transit.
Stationery from Japan is very close to my heart so I'm even more excited about the Pen Japan than Candy Japan.
Just this spring I got a Hobonichi planner sent from Japan to EU. It's not sold in Europe and in addition to great format it has unbelievable paper (Tomoe River) that is extremely thin yet opaque and works great with fountain pen.
Also Pilot (incl Namiki fp range) has always surprised me with the design, workability and ergonomics that has been put into each and every little writing instrument Pilot has manufactured, including even the very cheap low end.
Stationary geeks and students might find Pen Japan very attractive. There's unbelievable amount of people still into reviewing paper and fountain pens at The Fountain Pen Network forums. Pen Japan would definitely benefit from people having the real recurring need for new paper/notebooks etc.
Pro Tip: Get a cheap Lamy Safari fountain pen + notebooks with decent paper (Clairefontaine/Rhodia is great; Moleskine not that good) -- writing feels natural again even after all the digital pads and keyboards available.
There do seem to be many "non-cute" but just cool / useful stationeries I could send, such as this eraser which is just a bunch of corners instead of being a cube so that you'll always have that best corner part of erasers to use: http://www.amazon.co.jp/%E3%82%B3%E3%82%AF%E3%83%A8-%E6%B6%8...
That's the plan, but I want to have some more subscribers in the cute plan to feel validated to do this pen japan thing at all. Each plan adds 1-2 days of work to my months.
I don't know where you live, but there is a pretty nice brick & mortar chain in several US cities that sells a good assortment of Japanese writing implements and paper products.
The idea that sending out blank envelopes so that you can reach the threshold for discount is genius, never thought of that. Might have to look into it for my business.
Yeah it's a strange discount system as it is totally based on the raw count of items, disregarding what they cost to send. As I get closer to that 1000 limit I will definitely get more and more motivated to bridge that final gap by any means.
Now a shipment usually costs me around $3 to mail. At that 1000 threshold the discount will suddenly go from $0 to $300. Sending an empty envelope would cost about $1.
so basically when you hit 901 real shipments, it becomes profitable to send 1000 - (number of real shipments) empty envelopes, at a total savings of $3 * (number of real shipments - 900).
Love the idea to branch out into stationary. Now you've got the option to grow up and out. There's probably loads of other suitable Japanese niches too.
Have you done any AB testing with the personalised message on the home page ("Free shipping even to {user's country}")? I'd be interested to know how that affected conversion.
Although I did run a few tests, I don't think I ever tested that one. I initially added it as it was quite easy to do in app engine and then kept it as many people kept telling me how clever it is that it was customized. One spinoff would be to make that as a copy & paste javascript widget that others could also use on their pages.
A/B tests did show that having some video on the page was beneficial, so I should probably put one back in. The only thing is that the video I had before described an item I sent in 2011, so it is getting a bit dated to use anymore.
I have the payments set up to be in USD, so I wouldn't be able to quote precise prices if I did the conversion. I guess I could say something like "it costs $25 (about 14.69 GBP)" based on the country, but the final charge might be slightly different after the actual conversion.
I love this idea and subscribed after only a minimal amount of waffling, so thanks for doing it. :)
I would like to ask however if there was any specific reason for posting this directly after a batch of packages just went out. Looking at it naively it would seem that it means anyone who learns about your project this way has the maximum wait time ahead of them, on the other hand it's possible that this allows you to include the maximum amount of new customers in the next shipment. Or was it just coincidence? :)
Just coincidence. I was already writing this post since a few days ago and just found some people to read it through and give feedback and completed writing it just now
Would this work with ads? Organic, free traffic from HN and blogs is nice, but it seems more like a low probability gamble than something you could count on. Your growth is going to be random and you really can't do any projections.
The lifetime value of each subscriber is really high, so it seems to make sense that you could spend $XX in customer acquisition costs.
I've wanted to do something similar for a while, but this is really my only sticking point.
Organic traffic from blogs, HN and Google is really the only thing I've found that works. I have tried several paid advertising campaigns, but they usually end up costing nearly $100 per conversion. Maybe the ad copy / targeting could be optimized enough to get below LTV, but doing those tests would be very expensive.
I've sort of abandoned the idea that there would be some easy way to just get traffic coming in. It's more a fight for finding and retaining each subscriber. Also ads aren't completely on autopilot either, as channels change. When you buy some ad space, it might work OK at first but then work less well in the future as visitors to those sites have already seen your ad. So have to keep following if each purchase still makes sense.
Let's say you can optimize it down to $75 with better ad copy:
* Higher CTR -> lower spend
Then let's say you can optimize it down to $50 with better conversion funnel tracking
* You get their email and then send them a free eBook about Japanese candy or stationery, then you ask them if you have permission to keep contacting them. If yes, you keep providing value and eventually sell them on more Candy Japan packages.
* You include the video on your page
Then you instrument a referral incentive system
* You give someone double-candy if they refer a friend
Then you ask the people who aren't retaining why they aren't retaining. You bucket their complaints into categories and you provide solutions.
* "I only needed it for this one specific occasion" -> You sell them a gift subscription package instead, at a much lower price, so the recipient knows they are still thinking of them, with bigger upside kicking it at later months. i.e., month 1 = one piece of candy, month 2 = two additional pieces of candy, month 3 = 3 additional pieces of candy
I'm finding that when I ask people "why are you cancelling?" I don't get any actionable suggestions, mostly just people running out of money or that they've already had enough candy.
Have enough candy seems quite actionable. Why not offer a less frequent plan to these folks, say twice a quarter instead of twice a month, and you could pick a festival or holiday for people to celebrate with candy. "Here's your Sapporo Snow Festival candy pack! Look for Cherry Blossom celebration in 2 months".
\) Can you try switching them to "Pen Japan" 1.1 months before the usual cancellation point? This could be done with an opt-in.
\) Incrementally iterating on Mithaldu's idea, can you try giving them a price break (and announcing it with an email!) 1.1 months before the usual cancellation point?
\) Can you add a "But wait! If you stay around, you can get a 10% discount on your subscription cost" last-minute notice to your cancellation page, that is only presented if the user has been around for (the mean cancellation time - 1.1months)?
This. I wanted so badly to sign up, my girlfriend and I go to Chinese grocery stores and stock up on junk food a few times a year. Getting top ups and bring exposed to Japanese products would be awesome, but $25 a month is pretty dear for a monthly product. At $10/month for less frequent candy it would be a nobrainer for me.
It is semi-monthly. Though I think monthly would be sufficient. It might be something to poll the customer base about (Moar candy or moar frequency?)
Hopefully with volume, better manufacturer/distributor relationships, maybe lower-cost fulfillment offshore and changing of shipping method/frequency, they can lower the price or increase the quantities.
One positive for this entrepreneur is that people already associate "Japan" with "expensive", so the sticker shock isn't really unexpected.
I am a client of Bemmu's and I can tell you the two weeks don't come fast enough.
In our country, they will send you a notice in the post when a package has arrived. And then you have to go queue at the post office to receive it. However, every week I now find myself queueing at the post office just to see if any candy packages might have arrived.
I think the twice a month deliveries are great as they are still pretty far apart that you aren't sick of them yet. Lately the packages have increased in size and its a good size to make it enjoyable but not put you off sweets for a while.
Bemmu - You mentioned that a lot of people have un-subscribed, is this after you have changed from using an envelope size package to the new larger box?
I didn't think of the box versus letter issue as well. Fetching parcels from my local post office is a 20 minute walk, it can be annoying after a long day of work.
That said, based on the testimony I've seen here I might try a few months and see...
Or to keep a handle on shipping costs, monthly, quarterly or even yearly packages?
One thing I actually appreciate about some of the random time-insensitive purchases I've made from HK/China on Ebay is that I tend to forget I've made my purchase by the time it arrives. It's like an unexpected Christmas.
Where have you been advertising? Places with NSFW content tend to have much lower ad prices because most advertisers won't touch them, but many of them (4chan and Danbooru come to mind) are probably pretty good for the audience you're looking for.
I agree! Twitch.TV might also have channels that you could send some candy to, and see if they would advertise Candy Japan to their viewers. While it's a bit different from the usual content, G2A (sells games) got a huge boost (the site even died a few times because of the traffic) from Lirik's referral link.
that's awesome! I remember seeing this get started on HN a couple of years ago.
As an ex-resident of Japan I may sign up one of these days when I miss the candy :) although I must say I was more into the Japanese potato chips, all those seasonal editions! perhaps there's an idea for a sister-site!
Now that we've sometimes sent bigger packages, I managed to include some snacks in there too. One I really want to send is wasabi potato chips / wasabi bakaukes if I can find a conveniently sized bag that will fit our packaging.
Hi, how come the mailing address for Pen Japan is in Finland? Is it for tax reasons? and how do you actually get the mail?
Thanks and good luck with the new venture!
Congrats Bemmu! I love reading these status updates by people such as yourself and patio11.
The other added benefit is that both of you live in Japan, where I hope to one day live, and both of you are running your own companies from there.
Also I am loving the Candy you have been sending lately, so keep up the good work!
Awesome service + very interesting article to read too. Not sure if anyone has already made these suggestion:
1) Allow new subscribers to get [part] of old shipments.
2) Offering part of old shipment that was a favorite in future shipment.
3) Page for subscriber to rate pieces from the shipment. To support #1, #2 and #5,
4) Different sized / freq subscription.
5) Custom one time packaging.
I'm more interested in 4/5 personally. I already have access to some of these things where I live, you are in Japan (I'm not), so I'm sure there are more things I would like to try, but I think current offering is too much for me. ... I may break down and subscribe anyway, I don't know, too much thinking, brb need some snack.
It seems to be closely emulating Candy Japan. The fake NSA quote made me laugh. The unprofessional air to it seems genuine. Whatever, I subscribed. Hoping for some Dickmann's...
Which makes me wonder how much benefit there could be in targeting non-English speakers. I suppose once customers sign on, it will be a while before you have to communicate with them again.
I've seen the trend in these monthly food items (I believe it started with the beef jerky guy) and for the most part it seems super gimmicky. I think you found a great niche that provides some real value (who doesn't love crazy exotic candy?) and something I may actually try out.
Have you tried selling to any startups/businesses? Office candy is a treat everyone loves and could boost your sales quite a bit compared to just selling to normal consumers.
-CandyGerman.com appears to be dynamically determining the country of visitors by IP and including it in their free-shipping banner. At least they seem to have correctly guessed I am in Thailand. Perhaps test that out on your page? I noticed someone here asking if you shipped to Brazil - which would be painfully obvious if you had a sub-text like that. You could get even fancier if you you wanted - "XYZ candy shipments sent to Brazil as of June 2014. Sign up here to be lucky number XYZ + 1."
-Another commenter suggested down-selling a once-per-month plan that's available only to people who are canceling. I think that's super-smart. You can even split all the half-subscribers between your two shipments so that they stay the same size. I can think of very little reason not to offer this. At 800 subscribers * 5% attrition = 40 unsubscribes, if you can get 10% of the people to convert to a once-per-month plan for say $15 instead of $25, that's $60 of MRR recovered every month. Let's say the average half-subscriber stays an extra 4 months, that's an extra $240 every month. Obviously as your subscriber base increases, if your attrition rate is higher, or if you can convert more than 10% of unsubs, that number will go up accordingly.
-Have you done the math to calculate the addition profit you'd make by sourcing directly from manufacturers? It can have a huge impact on your bottom line. Will the grocery team still help you pack your goods if you buy the product yourself? If so, it's definitely something to start pursuing. If not, you'll need to have another plan for packing before you start buying product directly.
-In my experience photos and design can meaningfully increase conversions. I'd definitely consider icushman & thekevan's suggestions. If you're willing to invest 1 month's profits into a better candy offering occasionally, I think it's reasonable to invest the same amount into designing a site like icushman suggested and testing it against thekevan's. There isn't really another way to determine things like "does pro-photography and/or an Otaku vibe positively or negatively effect conversions?"
And a question: How are you purchasing postage? Is there a Japan Post API? We use Easypost's API for MonthlyBoxer shipments and it's been hugely helpful.
I remember the original comment when you were starting out. It's very inspiring for someone who wants to start a business in Japan. :)
I would like a service like Candy Japan but for drinks.
Sadly shipping costs will be way to high for this to be profitable. Why can't Japanese drinks become popular in Europe instead of the other way around. My favorite drink is getting replaced by Orangina and Fanta over there :<
There are certainly enough strange things over here to do a drink version, but taking into account the shipping cost if it was twice-monthly just like Candy Japan (2 cans every two weeks) then the subscription cost would need to be ~$38 to cover the extra shipping cost.
First time I went to Japan was just when 9/11 happened (watched it from the traditional guest house common area TV). So liquid limits had not yet been invented at this point. Before heading home I filled my backpack with a bunch of different drinks from the vending machines and then had a fun time trying each with friends and giving them ratings.
I think there would be even more different tastes with drinks. With candy as long as it's sweet 99% of people can enjoy at least a bit. But even in our small friends trial there were people who could not stand anything coffee based. Green tea based drinks are also a bit of an acquired taste and seem to be disliked by many (our tea-related candy that included some green tea bags got relatively low feedback).
Maybe it would have to be mostly sugary drinks. Or there would need to be a way to indicate which types of drinks you can tolerate, in which case things would get a bit more complicated.
Hi Bemmu,
Kudos on the success and good luck with PenJapan.
I was curious what is your churn % (if you're willing to share that information), and what are the churn reasons?
Also, how do you think PenJapan will fair compared to CandyJapan, considering the latter is for perishable products, unlike stationary people are likely to still have and be using when they get the next envelope.
I'm using both, since not everyone loves PayPal. Also I was very curious about how to accept "direct" credit card payments, so wanted to set it up for that reason alone.
Recurly isn't super cheap, but it's a very slick interface for browsing payments and looking at stats. With PayPal I feel strong hesitation to go to their site as they are always very slow.
Recurly also helps collect payments even when credit cards expire by sending reminder emails to customers with a customer-facing interface where they can change their details. I think recently they are even doing some magic to automatically update expired cards: "For Mastercard® and Visa® credit cards, we’ll automatically apply the latest account credit card information when there’s an updated credit card number or expiration date." https://blog.recurly.com/2014/05/new-feature-automatically-u...
I don't want to give you extra work but have you thought of also having something that condenses Japanese TV / Ads / Graphics which could be a newsletter? Desin
Also diversifying and applying all this to Nordic / Pacific / S. American countries?
First of all thanks for the post and the data. So helpful!
Anyway, If I read your graph correctly, you've got 800 paying subscribers * $25 that's 20K per month? So 50% profit margin isn't that bad at all!
Hey, randomly clicking around your Pen Japan site, and got the form to request review stuff. Looks like you copy/pasted from Candy Japan, as it refers to Candy Japan instead of Pen Japan.
I only had one pair of friends who I thought would subscribe. I would be more likely to subscribe to a "random cool stuff from Japan box" if it were around the same cost.
I almost signed but I remembered, there's a shop in Vancouver where they sell only Japanese candy and snacks. They are a cash only business but offer ton of variety.
Candy-as-a-service is a pretty awesome idea and imagine if this was selling software, it would've had higher profit margin.
My wife's friends who do 内職 (work-at-home jobs compatible with e.g. raising kids) work a lot harder than your CS person needs to for less than $400 a month. If you go down that path, they could also do introductory phone calls to candy manufacturers on your behalf.