I started CRAVEBOX in 2014. CRAVEBOX assembles and sells gift snack boxes and baskets. It’s July 2022 and we’ve all heard about the possibility of a coming recession. Inflation is at a multi-decade high, interest rates are rising, the stock market is crashing, the war between Russia and Ukraine continues, and the supply chain is struggling to keep up with demand. These problems make for a difficult business environment, especially because they contribute to decreased consumer demand, decreased profit margin, and difficulty operating and producing. At CRAVEBOX, I’ve employed a few strategies to strengthen our position heading into a recession. These strategies are to find new suppliers, vertically integrate supply chain, and add new product varieties.
Find New Suppliers
One of the biggest challenges throughout the COVID pandemic has been sourcing product. The supply chain has struggled because labor shortages, raw material shortages, and shipping bottlenecks have slowed everything down. And of course, with less supply, and more money printed by the fed, prices have gone up. With this slow supply chain and inflation, I found it to be crucial for CRAVEBOX to find new suppliers. I’ve begun doing business with several new suppliers over the past few years. This has helped me order redundantly, so that if one supplier cuts part of an order, another supplier will likely deliver that same product. Having a well-tuned supply chain in place is crucial for continued operations and if you lose sales due to being out of stock, you need to put more effort into optimizing your supply chain. Working with new suppliers also helped keep my costs down. Prices are constantly rising on everything and CRAVEBOX buys food products which are rising very quickly. But since I’ve been looking at pricing on the same items from many different suppliers, I’ve been able to buy from those with the lowest prices and it’s helped to keep costs down.
Vertically Integrate Supply Chain
CRAVEBOX makes snack boxes filled with a variety of snacks. Some of the boxes we sell are gourmet snack boxes with specialty, unique, private label snack items. These are snack items you wouldn’t regularly see in your local grocery store. Recently, I started hiring co-manufacturers to make my own branded snack products to include in these gourmet snack boxes. This means that I am not buying the snack from another brand but instead making them directly myself. I design packaging, buy film from a packaging company, send the film to the co-manufacturer, and the co-manufacturer makes the snack, packages it, and ships the finished pallets to me. This is generally a less expensive way to make a snack product and the supply chain is usually very reliable when you work with a co-manufacturer. This takes a lot of work and time but over the past 6months I’ve created 4 new co-manufactured snack brands and this will improve the supply chain and cut costs to put CRAVEBOX in a strong position during this difficult business environment.
Add New Product Varieties
As I mentioned above, consumer demand and profit margins are waning and most businesses are struggling to maintain both. Adding new product varieties is a great way to increase sales and possibly increase profit, if you can create high-margin items. The key here is that you want the new products to be similar to your existing products. If they’re too different from what you currently offer, you might need to invest a lot of money for new tooling, staff, training, etc. Risking large up front costs like that might be a little too risky in this hostile business environment. At CRAVEBOX, I’ve designed new package varieties that don’t require a supply chain overhaul, added cost, or added complication. This allows me to market new products, generate more sales, and do it without taking much risk.
About John Accardi
John Accardi is the founder and CEO of cravebox.com and starcoursecap.com. CRAVEBOX assembles care packages and gift baskets to be sold online. STARCOURSE CAPITAL is a venture capital firm that invests in young e-commerce companies. John dropped out of a PhD program at Georgetown University in 2014 to start CRAVEBOX and he says it’s the best decision he ever made. CRAVEBOX is located in North Wales, PA and John lives in Manhattan. When John’s not working, he enjoys sailing, playing guitar, and spending time with family.