Inside the Subscription Box Revolution

Paul Jarrett [00:00:02]:

One of the challenges that we had with Boohoo Box is when you're sampling vitamins and supplements, you know, there's a lot of stimulants and there's a lot of melatonin and sleep aids. And you know, when people first signed up, they were sticking with us for about eight months, but really quickly it went down to three months and people were kind of emailing us saying, like, there's only so many different stimulants I can try, you know, and the last one I tried, I was about ready to jump out of my skin. So we had to evolve and really understand that people are going to sample for about three months, but we need to use rewards points and collect data to then offer them other recurring subscriptions.

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Glenn Gooding [00:00:51]:

Welcome to Parcel Perspectives, the podcast dedicated to small parcel shippers. I'm Glenn Gooding and each episode we dive into insights, best practices and strategies to help you navigate this complex, costly market. Join me as we explore ways to strengthen your long term partnerships with your chosen carriers and stay competitively aligned.

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Glenn Gooding [00:01:18]:

Hello everyone. Appreciate you coming back to listen to another episode of Parcel Perspectives. I'm Glenn Gooding, president at iDrive Logistics. I'm excited about this one. I've got a very interesting guest here with me, Paul Jarrett, owner and CEO of Bulu. Today we really want to take a deep dive into the subscription box industry and frankly, kind of take the box out of that as well and talk about subscription a little bit and what that's doing to the future of E-commerce and E-commerce strategies. So Paul's going to share his journey, his learnings, what his company does to add value in that space. I'm excited to have some active dialogue on that front.

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Glenn Gooding [00:02:02]:

As usual, I promise we're going to leave you and close out with one to three specific takeaways for you nuggets, if you will, to help you better align your brand in the marketplace. And I just want to take this quick opportunity to welcome Paul. Paul, welcome. Appreciate it, Glenn.

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Paul Jarrett [00:02:19]:

Thank you so much for having me on. Excited to be speaking with a fellow giant. We just found out. So this is going to be fun, man. Ready for it. Thanks for having me.

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Glenn Gooding [00:02:27]:

Yeah. And so for the listeners, if they're wondering what that inside humor is about, we discovered we're both have the same dimensions. We're both 6, 5 and we both rock a size 16 shoe. So.

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Paul Jarrett [00:02:37]:

So it's the Ogre podcast.

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Glenn Gooding [00:02:39]:

Yes. Yeah, it's. This will be Shrek 3 or whatever we want to call it.

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Paul Jarrett [00:02:44]:

All right.

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Glenn Gooding [00:02:46]:

And not, not a problem. But really to get things kicked off here, you know, subscription boxes really have, have kind of taken the world by storm a few years ago, I think from, from my perspective at least, and you correct me where I'm wrong, it's kind of started out as a fun novelty from anything from fishing lures to spices and cooking and coffee and you name it. I would say that, you know, personalized product offerings, if you will, which are really cool and have a lot of hooks. I think behind the scenes, the industry is constantly evolving. I think you're doing a lot of that yourself. And I'm just really excited to hear with you as the CEO and co founder of Bulu, on what you've learned, what you've done. I think for the listener, I think it's important to know that he brings a solid resume of success behind him on this front. He's helped brands like Disney, L'Oreal and GNC bring their subscription services to life.

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Glenn Gooding [00:03:42]:

And we're going to be diving into how that industry has grown, the technology's driving its transformation and where it's headed. So, Paul, welcome.

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Paul Jarrett [00:03:50]:

Thank you so much.

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Glenn Gooding [00:03:51]:

Why don't we start at the beginning, Paul? It's always a good idea.

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Paul Jarrett [00:03:54]:

Yeah.

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Glenn Gooding [00:03:54]:

Can you kind of share the story of how Blue began, how it evolved?

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Paul Jarrett [00:03:58]:

Sure. Well, I started off my career actually in the advertising marketing world and my co founder, who I happen to be married to, Stephanie, we always work. We worked in New York City, San Francisco, kind of, you name it. And we got really tired of making other people a lot of money. So we at one point thought that we were going to start our own advertising agency or marketing firm, but we just really wanted to work in a world that was, you know, tangible and physical and you could go to a client and it wasn't some sort of idea, but it was actual results to hand over to clients. And so one day where, you know, she talked me into running a half marathon, which, you know, six, five, not built for him. I also did a full marathon, a couple of them, but just, you know, where I come from, in my world, like running is punishment. So.

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Glenn Gooding [00:04:47]:

Well, I was going to say, I was going to say with a man of your dimensions, I'm duly impressed, number one. And number two, I would expect you to be in a walker by now if you continue to do.

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Paul Jarrett [00:04:58]:

I just had foot surgery, so also there were plenty of like 80 year old grannies that were just flying by me when we were running the San Francisco. I remember that was one of the most humbling things is, you know, literally these like 70 year old, 80 year old women just flying right by me and men. So but you know, during that race we had a lot of time to talk and we're kind of going back and forth and this was kind of like the warm up to some bigger races. But at the end of it, we're living in San Francisco and we receive all these samples of stuff. And being from Nebraska and in a trailer park, like, you hand me a free gallon of milk, I'm going to walk off with as many as I can. And they're giving us free shoes and samples. And as we were walking home, I was like, this is crazy. We got bags and bags of samples and nobody asked us for our email, nobody asked anything.

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Paul Jarrett [00:05:47]:

I think somebody wrote down the type of shoes I was wearing. But we got home and we kind of joked that it was one of the first times that I was laid up for a couple of days, just recuperating and had time to think, right. But the original concept was can we put samples out there for vitamins and supplements? Because that was like my background and can we get marketing information back for people? And lo and behold, we stumbled upon a company called Birchbox, which Birchbox was. You know, a lot of people credit them for one of the first subscription boxes. It was a makeup and beauty box. But really, if you think about subscription, it goes 100 years back, Sears and Roebuck, they were doing in a catalog, you know, they were doing little shreds of leather and twine and you could buy those boxes or book of the month club. So it's nothing new, right? But Birchbox really put a new spin on it with samples of makeup. And I knew that vitamins and supplements were a fast follower to makeup.

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Paul Jarrett [00:06:44]:

So we actually googled for the idea. You know, how many times do you have an idea and you Google it and you're like, son of a gun, there's like eight people doing it. Well, imagine having an idea that you kind of are 80% or more sure like this could work. Because, you know, I know the industry and I know the background and it wasn't there. And I remember I kept thinking I was spelling vitamins or supplements wrong, but I was like, oh my gosh, this doesn't exist. We need to sprint and do this thing. And so we, you know, it's pretty much think the day after the race, we started off, I think we call it super box or something like that, but we just started kind of piecing together the website, kind of going to gnc, getting just trying to figure out like how could this work? The net net the idea was five vitamins and supplements for to five premium vitamin supplement samples. People pay 10 bucks a month, they buy that from us and then they could come back to our website and buy full size.

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Paul Jarrett [00:07:38]:

And we raised about 5 million in venture capital on that idea. Grew the company as we went to raise more capital. It wasn't there. We were the sixth subscription box or sample box. We were called back in the day when we started and it cost about a dollar to acquire a customer online. Lo and behold a couple years later There was over 14,000 different subscription boxes and the customer acquisition cost went through the roof. Investors weren't really interested in that time because there was no billion dollar shave club buyout. There were none of those had happened yet.

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Paul Jarrett [00:08:13]:

So we were kind of stuck between this rock and hard place. But finally I started just answering some of these emails where I would see a G. I got some bad advice from investors to not talk to the big brands until unless they said they want to buy us. But I wouldn't recommend that. I would say if a big brand contacts you, you might want to reply back and say what do you want gnc? And you know, what do you want? But really big brands started contacting us because they could not figure out how we were doing subscription at the time. And the reality is we were one of the first users on Shopify. We were working directly with the CEO of Shopify to do subscription where he is essentially telling us how to hack it. So I'll forever remember Toby and customer service finding out it was actually Toby not thinking it was that big of a deal.

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Paul Jarrett [00:09:00]:

But now Toby did a little bit better than we did. Should have listened to him. He said you should just do a subscription payment app. But we, you know, we didn't pay attention to him and we went and started doing these boxes for some bigger brands. So we started doing it for gnc, their membership program. We started doing it for Disney, you name it. We're working with these multi billion dollar brands and as the pandemic hit we decided to expand our services and we started really focusing on the store pack ship, the logistics for kidding, bundling subscription and not just doing it via e commerce, but doing it the way that we learned to do a Disney like selling subscription within a theme park and having the rest of them waiting at home. So what we say is we help, we help brands ship like a major brand, right? We've taken all those learnings from doing turnkey subscription box for big brands and now we're really hyper focused on subscription kidding, bundling for brands of all sizes and pumped to say that we acquired the company in October of 2023.

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Paul Jarrett [00:10:04]:

Kind of had a freak out moment, you know, after 10 years of being venture capital funded and then all of a sudden we're off eating on our own. But we've gone from about 12 clients to 75 by offering the service to everybody, not just the big brands. So it's been a, a pretty wild 2024. Fun, busy 2024.

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Glenn Gooding [00:10:23]:

Oh, that's fantastic news. That's great. So interesting how things have, have kind of evolved. You'd mentioned a lot of learnings through that and I don't want to dust over my next thought. And I just wondered, in addition to that fascinating story of kind of your evolution and where you're at today, were there any other real challenges that you and your wife faced kind of in the early days of launching?

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Paul Jarrett [00:10:47]:

Yeah, I mean, we were the quintessential. Yeah. Ran out of cash plenty of times. You know, those HR problems with people that you never see coming, you don't dare tell anybody else. And I would say the industry changing of just the amount of subscription boxes that came and it was almost a dirty word at one point in time. And then I think the pandemic, I mean, that really flipped us on our head because I'll tell you what, big brands in a challenging time, it doesn't matter what your contract is, they got the lawyers and if they say they're not going to pay you, like they're not going to pay you and you got to, you got to figure it out, right? So I'd say the biggest challenge that we probably encountered was during the pandemic when we were actually growing and had a couple of companies that wanted to acquire us. And pretty much overnight, a lot of the big brands that we're working with paused their programs or they just said, you got to wait until we can pay you because we've cut everybody in the finance department and we don't even know how to pay you yet. Our investors, I would say respectfully had a different idea of what we should do with the company.

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Paul Jarrett [00:11:54]:

And it was a two year negotiation for my wife and I to acquire the company. And that's just something that we never thought that we would be into. But I'll tell you what, it was a happy entrepreneur, founder friendly acquisition. We felt like heck and it worked out. But I would say out of all the challenges, the one thing that I always share with people is underneath the Level of all those challenges, the one thing that we've always done is we've ran a straight business and we've always tried to sniff out difficult problems to solve for people and to essentially make money off of. So even though we were dealing with the pandemic and we're dealing with big brands halting and pausing programs and investors kind of coming for blood, right. I'll just say that we were able to kind of like set that aside and say, what problem do we really solve here? What can we solve and for whom? And really that like epiphany moment of oh my gosh, you know, we don't have to work with 12 multi billion dollar brands. We can work with 1200 small brands and help them ship like those big brands.

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Paul Jarrett [00:13:01]:

And so I always encourage everybody of it almost is like in the midst of the most chaos are these moments of clarity of like, oh, here's the real problem. Like I think the problem is with the investors or the problem is with the big. That's not the actual problem. The problem is we're not solving something difficult enough for people to pay attention to. And that always seems to make the problems go, you know, your internal problems go away. Sales solves. All right.

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Glenn Gooding [00:13:27]:

So yeah, for sure, for sure. And you solved the problem of client concentration, didn't you?

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Paul Jarrett [00:13:32]:

Exactly, yeah.

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Glenn Gooding [00:13:34]:

Good for you, Good for you. So you'd mentioned when you first started, you were really one of the first entries into this market. And then if I heard right, a year, two years later, three years later, over 14,000 competitors. So outside of the fact that it got incredibly crowded as space did very quickly, how has it changed since its inception? How has it evolved as an industry?

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Paul Jarrett [00:14:01]:

Yeah, well, I think that so many times we use the word subscription box and it's kind of a marketing term. But if you really look at the mechanics of it, it's just multiple varied items going together and shipping on a repeatable basis. It might be monthly, it might be quarterly or you know, yearly. Right. And so when you strip away kind of all of that stuff, the kind of subscription like kitting and subscription have been around in a lot of forms or another. But I would say that the things that I've seen evolve are brands that are smart, that are selling on E-commerce, they're offering or they're figuring out like, hey, I have a cleaning product, right? I can actually sell this on subscription. And there's so many brands that we talk to that don't realize they have a subscription product. Like we just added a serial client, right? And the amount of subscriptions that they have.

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Paul Jarrett [00:14:54]:

It's Tiger Nut cereal, gluten free, you know, all these great things. And if you would have told me when we first started that hey, there's going to be a quote unquote subscription box of three different cereals bundled up and shipped on a repeating basis, I would have thought you were crazy. You know, but that's the reality of it, is that people are in search of making their lives easier finding these customized solutions and it doesn't really, really matter what the product is if the mechanics of it make sense.

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Glenn Gooding [00:15:24]:

Kind of like the equivalent of chewy for your kids, right? With cereal?

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Paul Jarrett [00:15:28]:

Yeah, absolutely. Yeah.

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Glenn Gooding [00:15:29]:

Interesting. So I think you, you touch on something there. So is that really what is making the subscription industry resonate so strongly with consumers at this point is it's kind of its, its ability, its customization ability, its ability to align specifically with the consumer's needs on the cadence they're looking for.

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Paul Jarrett [00:15:47]:

I would totally agree with that. But I would say the challenge, and this is something that really I haven't seen a lot of other companies kind of come to this enlightenment almost. Right. And I'll just take an example of GNC. So we ship, you know, 2, 3 million boxes for them annually. And if we were to customize all those boxes, there would be no way that it would be financially feasible for those folks to do it. So we use the word tailored. Right.

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Paul Jarrett [00:16:16]:

And tailored means we're doing 60 different variations of the GNC box that we're shipping 2 or 3 million for. Right. Annually. And that is something where let's say we have a 30 year old male that prefers chocolate. We take that data, we look at it, we go to GNC's inventory and we make sure that we can give as much chocolate flavor or sometimes we make sure we don't do chocolate because we want people to explore new flavors. Right. And I think that's where we see and when we have clients come to us and we get calls, you know, we get, I think on average about six or seven calls a week from some sort of subscription company. And you know, they're doing the brain drain, thinking they're slick, asking questions and, and we have no problem answering questions.

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Paul Jarrett [00:17:00]:

But really the thing that I think a lot of them are missing is they're trying to do hyper customization. And to be frank, like you can't really hyper customize a serial because it's too expensive labor wise to custom all of those solutions.

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Glenn Gooding [00:17:16]:

So that makes, that makes perfect sense.

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Paul Jarrett [00:17:18]:

Yeah, profiles and tailoring is the word that we like to use.

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Glenn Gooding [00:17:23]:

Gotcha. And so with complexity adds massive expense to the kidding process, right?

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Paul Jarrett [00:17:31]:

Exactly, exactly.

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Glenn Gooding [00:17:33]:

So what kind of technology or AI or machine learning is helping you make good, let's say tailoring decisions.

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Paul Jarrett [00:17:42]:

Yeah. So I would say that when we look at our software stack, the thing that we did early on and we actually, I leave this part out of the story because it's a whole nother branch of the story, but we built a software and we sold it and it became what's called now is rangeme.com so we have like a lot of kind of like software tech nerds and we were like, hey, there's a warehouse here. We can actually figure out how to market that like a software and then build that up. But I would say that there we started off in Excel like most people. We tried different WMS systems, we actually built our own but it just wasn't feasible to make it kind of commercial. So we started working with, it was 3 PL Central at the time. Now it's called extensive and we really keyed in and they were acquiring a lot of the softwares that we were using. And I would say I'm less interested in the software stack that companies are using and way more interested in the APIs and how the data flows.

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Paul Jarrett [00:18:43]:

Right. And that's probably the biggest difference for us is we will not work with a client if we aren't getting the proper API set up. We have a two week process. So you could come to us and say we're going to pay you a gajillion dollars to pack this, blah blah, blah, blah. But if you don't work with us to get inventory and everything set up properly and we don't have the proper API flows like we'll never do it because we know it's just a house of cards. Right. And I'd say that that's a big difference for us. And one of the main ways that you can pull off a subscription or kidding or something complicated is the data just can't flow from point A to point B like traditional linear logistics.

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Paul Jarrett [00:19:22]:

Right. The data has to flow more like that kind of like hub and spoke model, like an omnichannel model. And that is what allows us to really manage the inventory for non barcoded items, for example. Right. But if that data doesn't flow back and pull out of the inventory correctly, it's just game over. And we won't ever work with those companies because frankly over 12 years we've made that mistake more than once. Right. So we don't care if people are using Excel or what they're using.

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Paul Jarrett [00:19:51]:

Like I said, it's just more the APIs and the, the data flow. And as far as AI goes, we are really dependent on the software partners that we're looking at. And every year we kind of review all the software that we're using and we even call up the software companies and ask them if we can be part of their product development team. Can we be the guinea pig? Right. Because we want to ensure that they are the ones that are utilizing AI. You know, we're not a software company, we're a logistics company. Right. And so we are very dependent and we push the partners that we work with to not just utilize those tools, but to teach us what they're doing, how they're doing it.

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Paul Jarrett [00:20:28]:

And if there's a company that isn't kind of keeping up with technology, like, we'll find a new partner and we don't hesitate about that.

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Glenn Gooding [00:20:35]:

Good. What kind of role does automation play in managing kind of this logistics side of the. Of what you do?

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Paul Jarrett [00:20:43]:

Yeah, I would say automations is. It's interesting because it's been something that led to us doing what we're doing because we thought 12 years ago all these things existed. And the automations of, you know, from billing down to pulling inventory correctly. One thing I've learned about logistics is it is unbelievable, the separation between technology and the boots on the floor. It really is jarring. And we see ourselves. If you were to look at us through the lens of a software company, I would say, you know, we're, we're kind of behind the times a little bit. But if you're to look at us like a logistics company in our industry, we're probably light years ahead.

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Paul Jarrett [00:21:26]:

So our expectation has always been automations and things are built in place. Right. And I would say the biggest thing about automation is you need to ensure that you manage it properly and you have a systems of checks and balances in because you get one, you know, automation or something off and you pull something, you know, out of inventory a bazillion times over. Those can be a nightmare to actually work with when you're doing like. Kidding.

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Glenn Gooding [00:21:54]:

I can only imagine. I could only imagine. Oh, yep.

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Paul Jarrett [00:21:57]:

We've dealt with that once or twice. Yeah. So it was interesting. We had to come up with some custom automations for. We just recently did a lot of Advent calendars this year, so we've never really dipped our toe into that, but we had, I think, 80 variations of Advent calendars And you know, each day was a different food item or fishing lure, what have you, or different items in there. And we had to really expand because we never thought we'd be bundling more than 12 to 15 items together. Right. And so here we are now putting 30 some days in an advent calendar all together.

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Paul Jarrett [00:22:34]:

So that was interesting. But again we probably spent two weeks on the automations and the client's freaking out because how are we going to ever pack these in time? But we had to take that time to make sure and do that properly because we can always hire and pack overnight. Right. But if those automations weren't quick and done correctly, that would have been a nightmare. It almost was, but we got it done.

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Glenn Gooding [00:22:56]:

That sounds like an awesome project. So one thing that, that caught me, that made me grin a little bit. Paul, you kind of mentioned if you were viewed through the lens of the tech field you got, I think you said that you'd be viewed as behind the times. But if you view it from the supply chain or logistics side, you guys are cutting edge. Which kind of makes me chuckle a little bit. Which is a very polite way of saying the supply chain world is still very fragmented and messed up. Huh.

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Paul Jarrett [00:23:22]:

It is hard to even explain to people outside of the industry and it's hard to explain to people inside the industry. But just the fact that like a bill of lading exists, you're like, what is this? You know, this should be all blockchain. And, and I think, you know, ultimately someday if we can grow the company to the, to reach our goals, that is one thing that I want to explore five years down the road if somebody hasn't fixed it yet, like this whole industry should just be blockchain from raw material, pulling it out of the ground to the doorstep. So hopefully somebody else is figuring it out because that's probably not something you want me doing. But I'm not shy down the road to try to solve for that.

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Glenn Gooding [00:23:59]:

Yeah, yeah, it's very, very interesting. I'm wondering Paul, from kind of a look ahead perspective, where do you see the future of this kidding, tailored, kidding, subscription, e commerce thing you're doing as a whole? Moving. Where do you see it going?

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Paul Jarrett [00:24:19]:

Yeah, I see subscription as being almost ingrained in what most people are doing and I see omnichannel kidding. You know what's crazy is how much work we get from companies that can't bundle things together and kind of put them in on retail shelves. Right. So I see a lot of companies adding more and more subscription. I see a Lot of companies doing more omnichannel fulfillment. But I'd say even if you step back and look at the industry, the things that I think about are AI is just going to be part of everything. I also think and see sustainability. That's more and more what our clients talk about, what they ask us about.

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Paul Jarrett [00:25:02]:

And these things all apply to subscription boxes. And then I think actually a lot of almost like micro fulfillment. Right. Like where are places that we can put not just subscription boxes but any fulfillment. Right. Especially in urban areas and get that one to two day shipping. So I'm constantly kind of doing my homework on AI sustainability and also just like micro fulfillment and what that looks like. Because the reality is, I mean, how mind blowing is that if you order something and it is on your porch that same day, right? And that's what people, people want.

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Paul Jarrett [00:25:35]:

And so how do you pull that off for subscription and e commerce? Something that I believe everybody should have as part of their portfolio and a revenue channel.

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Glenn Gooding [00:25:45]:

Interesting. So how does subscription play with retention, client retention?

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Paul Jarrett [00:25:53]:

Great question, great question. We see one of the challenges that we had early on with Bulu box is, was retention. Right. And so we. Forgive me if you are the viewers are familiar, but there's a customer. When it comes to subscription, there's a standard formula that you want to use and it's called the customer acquisition CAC to LTV payback ratio. So what is your customer acquisition costs? What is the lifetime value and how quickly do you make that back? Now you can do that. Profit, revenue, it doesn't really matter as long as you have the formula and it's something you're tracking.

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Paul Jarrett [00:26:29]:

But I think Salesforce, for example, like their customer acquisition cost is something like $5,000, but their lifetime value is like six times greater than that and they pay it off within a year. Right. If you can get that cacti ltv correct, that's how you see those companies raise billions of dollars. And one of the challenges that we had with Boohoo Box is when you're sampling vitamins and supplements, you know, there's a lot of stimulants and there's a lot of melatonin and sleep aids. And you know, when people first signed up, they were sticking with us for about eight months. But really quickly it went down to three months and people were kind of emailing us saying like, there's only so many different stimulants I can try, you know, and, and the last one I tried, I was about ready to jump out of my skin. So we had to evolve and really understand that people are going to sample for about three months, but we need to use rewards points and collect data to then offer them other recurring subscriptions. Right.

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Paul Jarrett [00:27:30]:

And I would say that's the biggest finding that we found is that if you find a customer that is willing to sign up for a subscription, it is exponentially easier to get them to sign up for other subscriptions. So as a subscription box company, we started advertising and found that people that were signed up for Netflix or streaming channels on subscriptions, those were the people, which was awesome because, you know, we knew who they were, but also was a challenge because you're like, oh my gosh, we are fighting for dollars from Netflix, from those other companies. But if you can kind of remind yourself that, hey, I found these customers that will buy subscription and maybe they don't want eight, nine months of a boo box, but I can get them in three years to get a multivitamin shipped on repeat to them. That was the core kind of insight is subscription buyers will buy up to three to five different monthly subscriptions. And that was, that was a core takeaway and something that we talked to a lot of our partners about.

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Glenn Gooding [00:28:32]:

Interesting, interesting. I'm wondering, given that that's fascinating to me, I'm wondering, within an existing subscription, how important is it to evolve with your, your client? Is there a way to fine tune the tailoring, if you will?

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Paul Jarrett [00:28:49]:

Yeah, yeah.

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Glenn Gooding [00:28:50]:

To elongate the lifetime value of the existing subscription client?

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Paul Jarrett [00:28:55]:

Yeah, I think absolutely. And, and that comes back to like the customer acquisition, the CAC to LTV payback ratio. And we kind of feel like if you can hit that metric, don't push it too much. Like if your lifetime value is three times greater than your customer acquisition and you're getting paid back within 18 months, you're doing better than 90% of the industry. Right. And so don't push that anymore. Maybe offer other products, but if you're not meeting that CACTL TV payback ratio, find other things that people can subscribe to. You know, I remember one client that we were working with, they had a subscription box and it was a vitamin and supplement one.

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Paul Jarrett [00:29:38]:

But same thing happened with them. They were only getting about three months, but they had, I think they had about 500 retail locations. And just on kind of a whim, the CEO said like, you know, hey, if, you know, they're willing to sign up for a subscription box and we're selling them that, like, would they just sign up for a monthly membership? And he kind of made up like 22 bucks a month, they get $44 back in store. And so what he figured out was he was using a subscription box to be able to convert into in store traffic. And he was just charging people a monthly membership. And then he went on to open a bunch of gyms because he built this client base and he really had that insight of like, oh my gosh, you can, you know, not just get them kind of in a subscription trial, but you can get them on a membership and I can go do franchises with other gyms and sell to these same people. And he's since retired by you as a. Didn't take him long to retire once he found out that insight.

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Glenn Gooding [00:30:35]:

Fascinating. Where do you see your company Bulu and the subscription industry as a whole kind of moving in the next five years?

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Paul Jarrett [00:30:43]:

Yeah, I think that our company is just going to continue. I say chase down the problem, but I think that really when I say that, what I'm trying to say is omnichannel. As much as everybody's been talking about it, and it's a burnt out word, we don't see a lot of people doing it correctly. And I think that every consumer packaged good product is going to have to hit those quadrants of I sell in store, I deliver in store, I sell in store, I deliver E-commerce, I sell E Commerce, but I deliver in store, I sell E-commerce, I ship directly to homes. And I think that quadrant, IT still needs a lot of technology behind it. It still needs a lot of labor and people need to figure that out. And then when you layer any sort of complication of subscription or putting multiple items together, I still think that that is the way to go. I mean, we're one of the few people offering Omni channel fulfillment for a kit or a bundle or a subscription.

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Paul Jarrett [00:31:44]:

And I'm kind of, you know, I want to give it away, but I'm kind of looking around going like, are you kidding me? Like nobody else. But I understand why it's challenging because a lot of the software isn't there yet. So. So I still think that what the challenge is going to be is the technology is exponentially going to get better. But the gap between technology and the boots on the floor, like the white collar and the blue collar, that it's going to be very challenging. Right. And so I almost see in the future logistics firms or whoever, they're almost going to have to have this person that can train and walk the floor and just it's not even like an IT position, it's almost like a Daily software management position. Right.

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Paul Jarrett [00:32:26]:

And I think that that continuing to offer Omnichannel and to fulfill. I think it's going to take five years before everybody gets there still.

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Glenn Gooding [00:32:35]:

Okay. Yeah. I have a tendency to agree, you know, I'm a small parcel geek, self admitted. Anybody listening to personal perspectives knows that about me. My, my gut tells me that the majority of the subscription box industry, if I were to categorize it from a characteristics perspective, it's predominantly very lightweight. Is that a fair assumption?

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Paul Jarrett [00:32:58]:

Absolutely. Yep.

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Glenn Gooding [00:32:59]:

Yeah. So given that and again leaning on my geekiness here, there's a lot of stuff happening in 2025 in the lightweight residential delivery environment. I know that the carriers are, they're the connection of this to the consumer. Ultimately, Post office is doing some crazy things. I'm wondering do you think that's going to be very disruptive to this market or how do you think the industry is going to adapt to what I coin, it's kind of hyperinflation getting imposed into the lightweight residential final mile market?

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Paul Jarrett [00:33:34]:

Yeah, Well, I think over 12 years it always feels like every two years there's some kind of like the sky is falling.

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Glenn Gooding [00:33:42]:

Right, fair enough.

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Paul Jarrett [00:33:43]:

The reality is it's going to impact everybody. And I think I always tend to look at like what the opportunity is. And I still, I think for a lot of brands they really haven't understood or gone with the opportunity of retail. And I think something like this is going to push those brands to think more about their retail footprint and frankly to look at more channels like social media, maybe like global social channels and Amazon. And so what we see is with our subscription box clients, when something does change and it gets too expensive to ship, we have gemstones basically shipping rocks. Right. Or something happens within their industry. Almost always the solution has been, hey, let's increase your retail footprint.

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Paul Jarrett [00:34:29]:

80% of shoppers are still buying retail. Right. Or let's look at social media channels or other channels. And I think it's just going to fast forward those things. I think it's going to fast forward Omnichannel. But again, I think after running a company for 12 years, like I have to take, and being the owner, I have to take that optimistic view of it. Right. And just remind myself it will be something that everybody has to deal with.

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Paul Jarrett [00:34:53]:

Right. Like the pandemic. Everybody deal with it. Right. And so amidst the chaos is opportunity is kind of my hot take on it.

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Glenn Gooding [00:35:01]:

Yeah, fair enough. Thank you. As we go to kind of, I think wrapping things up, final thoughts. You know, I'd kind of promised the listeners a handful of nuggets to take away from your extensive knowledge in this space. I'm wondering, looking back at your journey with Bulu, what you've learned in this industry, leading out with some innovation. What do you think every E-commerce business should know?

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Paul Jarrett [00:35:25]:

Yeah, I think that every e commerce business should know and have some level of subscription, some sort of recurring revenue. And a lot of people don't think that they have the product for that. But cleaning supplies can be recurring almost. You know, we were talking about cereal earlier, but I think that if people understood that CAC to LTV payback ratio and you know, if they would have ever saw the light bulb that went off in the CFO's brain at Disney or at GNC, you know, because we had to pitch a lot of them and push financially. People think that we were selling to marketing or whoever. But I was like, no, if you ever took us in and we got in front of finance people and we could explain to them what a subscription and recurring revenue did, they were sold. And once you sell a CFO or anybody in finance at a big brand, like it's going to fricking happen, right? So I think that if people understand kactile TV payback formula and what a subscription can do, a lot more people will be doing it. And I tell people I view that revenue as the revenue that can just keep the lights on.

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Paul Jarrett [00:36:30]:

And it doesn't have to be the main source, it's just a tool to use. I also think kidding, bundling, tailoring, customizing, call it what you want, but doing different variations of things, right? Like maybe you have a three pack on your website, but Target wants a six pack, right? And I think the ability, that's another place where we've seen a lot of our clients over the years just perform incredibly well. I mean, some of them even just would do mystery boxes of excess inventory or stuff that's going to expire. And it's just that idea of like different kits, different bundles, adding stuff to, you know, buy this, this, this, get a T shirt, we just hit free gift with purchase is like the new thing that E-commerce stole from magazines. So I think that's a big one too. So subscription and the ability to do kits and bundles, right? And then I think ultimately to do those things, you really need to look at your software systems and the companies that you're working with. Because so many times we've worked with companies and they'll do the brain drain. They'll get information from us and they'll go back to their kind of 3 PL or their fulfillment company and all of a sudden they try to pull off a kit or a bundle or a subscription and it is an instant inventory problem.

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Paul Jarrett [00:37:46]:

And they come back to us. Right? And it's one of the reasons why we educate people so much on subscription and kidding is because to get the technology and the labor correct for it, it's really hard. And by sharing that with people, almost always they come knocking on our door to fix their inventory. But I think that with those two things, you have to ensure that you get boots on the floor or at the very least like say man screen time me and show me how you're going to pull this off and show me how it pulls out of inventory. Because what you really want is again, talking about what we talked about earlier is you need that data flowing correctly. If you do subscriptions, whether it's going out or whether it's coming back in as a return, you need to manage your inventory. And subscription is ruthless. It is relentless.

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Paul Jarrett [00:38:37]:

I even encourage people like start on an annual or a quarterly until you kind of get the cadence. Because if you try to do a monthly subscription, that thing's happening and it doesn't care if you have labor or not. That thing needs to go out. Right? And so those are the things that we've learned over the years of how powerful subscription and getting can be. But if you don't have the right software and team to pull it off with the right APIs, you're creating a nightmare. And then you'll be calling us to handle advent calendars for you.

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Glenn Gooding [00:39:05]:

Those are some good leave behinds, Paul. I really appreciate that. I guess for listeners who would love to learn more about you specifically or your company Bulu, I might want to explore a partnership. What's the best way for them to reach out to you?

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Paul Jarrett [00:39:19]:

I'll tell you what, there's Bulugroup.com, there's Paul Jarrett.com but if they made it this far, I appreciate it and you can just drop me an email. Let's just paul@boulugroup.com and maybe toss like a little emoji in there. So I know you heard me on a podcast.

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Glenn Gooding [00:39:32]:

Awesome. Awesome. I can't thank you enough for joining us today, sharing your insights. I thought they were invaluable and insightful. It's exciting. I'm happy for you to hear how you're kind of carving out a some innovation in this space and leading some value here. Really enjoyed it. Really, really enjoyed it.

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Paul Jarrett [00:39:51]:

Thank you for having me on. I appreciate you man.

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Glenn Gooding [00:39:54]:

You bet. And as always listeners, don't forget to subscribe to Parcel Perspectives for more insights in this ever changing, ever more complex, ever more expensive world of e commerce and logistics. Thanks again for tuning in and we'll see you next time.

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Glenn Gooding [00:40:16]:

Thanks for listening to Parcel Perspectives hosted by me, Glenn Gooding I've been in the small parcel space for 37 years, starting with a deep and broad background working for one of the major carriers as an operator and industrial engine engineer, later managing pricing at the highest level for the largest, most complex shippers in the world. Since then I've been a national thought leader and work to help drive strategy for clients from Fortune 50 companies to startup e commerce businesses, helping them more competitively align in this complex and expensive market. If you enjoyed the show, please subscribe and share with friends. Join us next time for more expert advice and strategies to stay ahead of the shipping game.