The following interview is a conversation we had with Jason Park, CEO of Coldcart, on our podcast Category Visionaries. You can view the full episode here: $6.5M Raised to Build the Future of Perishable e-Commerce Fulfillment
Brett
Hey, everyone, and welcome back to Category Visionaries. Today we’re speaking with Jason Park, CEO & Co-Founder of Coldcart, a perishable ecommerce fulfillment platform that’s raised 6.5 million in funding. Jason, how are you?
Jason Park
Great, thanks for having me, Brett. Really happy to be here. Looking forward to this.
Brett
Yeah, no problem. I’m super excited as well. So let’s go ahead and jump right in, talk to us about what you’re building today.
Jason Park
Yeah, so, as you mentioned, our business is orchestration and optimization of perishable parcels. What the heck does that mean? Frozen and refrigerated products, you know, think kind of food, meal, subscriptions, pharmaceuticals, industrials. There are. Last year were 3 billion of these parcels shipped in the US, and that number is expected to grow to 9 billion by 2032. And there is not a single. This is kind of the last sort of frontier in terms of supply chain technology and software. And so the specific challenge of this space is that you can’t just lower costs. You have to solve for cost and spoilage at the same time. And the more you improve one, the worse the other one gets. And there’s a very direct trade off. And it’s to the point where even the largest companies in the space have to throttle their growth.
Jason Park
And so what we are is to mention a software platform that orchestrates and optimizes these shipments. So we have brands and manufacturers one side of the orders come into Coldcart. Coldcart is looking at all of the different variables that will impact cost or spoilage. You know, how hot is the temperature, how much ice insulation you have to put in the box? Is this carrier going to show up on time? If I ship from Georgia versus Florida, and all of those determinations are made in real time, and then all those instructions are passed to a network of warehouses we have around the country, and customers owned warehouses as well. Through that, we are able to lower cost per shipment by 15% to 50%. And we’re also able to reduce refundable late shipments.
Jason Park
That is, the ones that would be spoiled because they deliver late by 40% to 60%.
Brett
So I had an interesting experience that may be relevant here. I used to order a lot from crowd cow. Are they a customer of yours? Do you work crowd cow?
Jason Park
We do a lot of meat and cow related products, and they are one of the most difficult categories to service. We do not work with crab cast specifically.
Brett
Okay. Yeah. Before I share my.
Jason Park
Hopefully they’re listening. Yeah.
Brett
You know, our experience with them was, you know, we would order every now you know, like a few times a year we order, you know, Wagyu, and it’s like a fun experience for the family. And we ordered a shipment once and it got delayed by, I think, two or three days. And then it came and it was, you know, not good. It had like, gone bad. It was like just this horrible experience. And all I could think about was like, this is very high stakes. That was probably four or $500 worth of meat that we’re talking about. It’s very different from like, you know, an Amazon order where like, the iPhone charger gets delayed. This is, you know, me. And it was for like a party. It was supposed to be a good thing, and we didn’t get it.
Brett
And I am not a customer now, and we stopped using it because were frustrated with the experience. So it must be high stakes for you then, right? I’m guessing for a lot of the companies that you’re working with, they need to get that stuff there. They need to get it there on time.
Jason Park
It is ruthless that there is. As soon as it delivers late, that’s it. And to your point, there’s a refund. They’re trying to reship it. You only get one or two chances, especially, again, I don’t know, Crowdstrip. So who I’m speaking with here, but I’ll be listening. But there’s a very real customer lifetime value impact of this. And you’re right, normal for these companies is anywhere from five to 10% of sales refunded. And that’s just accepted as a cost of doing business.
Jason Park
But that’s just the cost of refunding the order, not all of these other factors like you just described, the fact that this customer doesn’t want to order from you again, and maybe during subscription businesses, it’s generally the case to your point, that if it’s important enough to ship frozen or refrigerated in a box, it’s there are stakes involved in medicine or some solvents needed to run a plant or whatever the case may be.
Brett
How did you get into this business? What were you doing in your life that you were sitting there just thinking, man, how do we solve this problem? Did you have an experience like me? You’re trying to order some steak and it got delayed. How did you uncover this problem?
Jason Park
I think some of it, I’ll give you a quick background on myself because I didn’t really influences why in this moment. I was kind of got grabbed by this problem, I guess. So I started my career out in B2B e commerce fulfillment for a company called McMaster Car. So it spent about half my time there managing physical warehouse operations. So your pick pack, shipping assembly and the other half of my time on software and automation projects to do those first things more efficiently. So kind of both on the physical and digital sides of that world, so to speak. Left went to Bain and company management consulting and consulted primarily for companies in the tech industry. This was in the early two thousand ten s. And so the big thing happening in tech and to tech companies was the cloud, quote unquote.
Jason Park
And you know, the transition from having giant physical server boxes and data centers that companies didn’t really understand. And I you, they just had to have them. And they cost a lot of money to a world in which we sign up for an Amazon Web services AWS account and all that centralized in a way that’s more efficient than any of these individual companies can achieve on their own. That actually comes into play quite a bit in how we approach cold card. And then I joined Allstate specifically to start their consumer identity protection business. Took that from zero to $100 million in about five years. And so it that moment kind of in my life, in my career, I reconnected with a friend from Harvard undergrad, Matt, who became my co-founder Matt Salzberg.
Jason Park
And he had started the company Blue Apron close to two decades ago. Now as we start to date ourselves here and to be honest, Blue Apron was always a head scratcher for me. Like you’re going to ship boxes of vegetables to people’s apartments. Like to your point we’re just talking about isn’t that gross? How does this make any sense? And of course the IPO for 2 billion. And so a couple years later we get reconnected. And I was asking how did you figure out the boxes? And at the time he was CEO there were about a billion in revenue. And as he described it was prohibitively hard. And the reason it was hard was because the way you describe it is always just too much overhead, too much infrastructure, too much specialization and you connect the dots.
Jason Park
That is the same phenomenon that happened in tech industry in 2010s with data centers to centralized infrastructure. And you put all these companies together in the case of perishable parcel shipping, yes. You put all these companies together on the same platform. Costs get better because of volume. I think everyone expects that, right? That’s not that interesting. But the unique aspect of doing this for perishables is because you are trying to solve for costs and spoilage at the same time. When you put these companies on the same platform through network effects across these companies you are able to unlock efficiencies that are actually not available for any one of those companies individually, no matter how big they are. And ironically the largest companies with the largest supply chains actually tend to be the worst at this. And they will self admit that.
Jason Park
And here’s kind of an example. 1000 companies shipping frozen product in New York City shipping via UPS. I always pick on UPS just because they’re, everyone knows who they are, they’re one of our partners. But the UPS is running 85% on time delivery. That’s fine. No alarm bells are going off, no one’s concerned. But those thousand companies are all refunding 15% of their sales because as soon as it delivers late, it’s dead. You cannot use the product. And so through cold cards platform, we would see that happening in real time, say across a couple of companies. And then for 998 other companies we would reroute those shipments to ship out of different warehouses. We would change the carrier. Maybe it’s laser ship, maybe it’s a regional carrier. Instead. No one involved in that process has touch or do anything.
Jason Park
And now for 998 of those companies, their refunds go from 15% to 2%. And it turns out that companies are willing to pay $2 or more in every box for that because that is the better economic trade off. And that’s an example. There are many examples like this throughout the process. But that’s an example of, it doesn’t matter how big you are, if you’re only working with your own volume, the only way you could even get the data to make a decision like that is because bad things are happening to you.
Brett
It must be a booming category. Just thinking about this from the perspective or as a consumer, literally. Last night I sent a link on Instagram to my wife of a. It’s like a tropical fruit delivery company. And you order online and they mail you fruit and you’re buying it in your big batches. But I’m seeing more and more of that on Instagram, on social media. That seems to be a thing. I would guess like 1015 years ago that probably wasn’t a thing. Or the idea of like ordering your fruit via mail, ordering your meat via mail, that was probably not a common thing. Is that accurate? Like is this becoming a bigger and bigger thing in a bigger and bigger.
Jason Park
Market so that 1 may actually be one of our customers? It’s not a lot like that. Yeah. So really, I mean there’s potential. Parcel shipping has always existed, but from a food perspective, really it was when blue Apron came out in 2012 that really started to create this renaissance, so to speak, or this kind of emergence of d to c food and d to see beverage products. And what’s been interesting, a lot of people are saying that, gosh, well, of course it got big during the pandemic, but it’s going to crash. Like everything else, this category, since at least 2015, has been growing by 18% roughly every year. And very consistently and actually very linearly, even throughout the pandemic, of course, you have a pandemic spike. Right. But that actually has to do a lot with generational and demographic shifts.
Jason Park
Millennials now have multiple kids and use at least one or two of these services as part of their weekly meal routine. I think three of these services in my house. And so from that perspective, you have now more and more of the kind of native audience for this type of product, coming of age, so to speak, and having bigger families. And that’s been driving a lot of this growth. And then pharmaceuticals, industrials, all those products, those are even bigger categories, frankly, than D to see food. And so, yeah, there’s a lot out there. And it’s always kind of fallen in the cracks between traditional supply chain or e commerce and traditional cold chain. Cold supply chain parcels have always fallen through the cracks. And everyone just kind of says, oh, those are the hard ones, or those.
Jason Park
We lose money on those, or we ship samples. And this is the first time that now this category is getting, you know, getting the opportunity to modernize.
Brett
That’s insane to even think about. So these brands are sitting there and just saying, you know, 15% loss on orders, and like, that’s just life. That’s the status quo.
Jason Park
They’ve just accepted that 15% would be high. But it happens on a regular basis to companies. But, yeah, five to 10% is, you look at industry on time delivery rates for just last mile delivery in general, whatever that is what companies are refunding. And that is just, well, so the sophisticated ones will just budget for that, just like a retail store. Budgets for shrinkage, that just cost of doing business, which is really unfathomable when you think about it. Companies who are smaller, earlier stage, or maybe less sophisticated don’t even account for it. And then they wonder why their costs are so high. We get a lot of them who come in to the door at cold cards, so to speak, and that hasn’t even occurred to. They’ve never seen that number. They’ve never even.
Jason Park
I mean, obviously they know what their refunds are and they know, you’re getting support tickets, but they’ve never really connected it to real revenue loss before. Not to mention people like you who get a nasty looking box and will never order from that company again.
Brett
Yeah, that seems to be the real cost, right? Or like, the. If I were running that brand, like, that’s what would make me cry is like, knowing that it just cost me a customer. It’s not the order, it’s like the lifetime value of that customer. Like, that’s tier. That’s tier worthy.
Jason Park
We actually, we’ve quantified that in various settings. And depending on what the business is and who it is, the customer lifetime value impact of one late order is anywhere from three to seven future orders. And that’s account that includes the people who have defected. So that’s not really considering the full potential of what those customers would have been had they not churned out. You know, you can’t really remove that from the sample. So, yeah, it’s all. That’s the real cost of this stuff. It’s a lot more than just saving $0.50 on a UPS rate.
Brett
And if we’re looking at the pharma side, it must be even more intense than, like, me, angry consumer who didn’t get my beef. This is like potentially life and death, is that the types of drugs that are being shipped, like, just thinking back to the pandemic, wasn’t Pfizer, didn’t that require cold storage to be shipped?
Jason Park
So as much as, you know, I don’t want to say, boy, I wish we had another pandemic. Boy, I wish that I had started this business before 2020, because this was how those vaccines were getting shipped. You know, once the COVID vaccines finally came out, they were shipped parcel and, you know, unfortunately missed that wave. And you’re not wishing for, but absolutely, the stakes are very high. And, you know, so our COO and Noah comes from the pharma industry, and there is a very strong relationship between mail order pharmacy late deliveries, especially around. It’s almost very fortunate that for us, marketing that worked out this way. But between late deliveries, frozen refrigerated medications, and people adhering medication adherence, people taking their medicines, and obviously, if people aren’t taking their medicines that are important up to ship, that’s not a good thing.
Jason Park
But there’s also very real impact in terms of how these companies are getting reimbursed, their access to insurance. There’s a very real cost, almost like a revenue cost to this, that due to the nature of how the insurance works around this and the regulations. Yes, it’s a big problem there, too.
Brett
If we look at the revenue split, what’s the revenue split between those two general buckets of food and pharma?
Jason Park
Yeah. So when we look at addressable market, we think of them as roughly a third, a third. Pharma and industrial are actually meaningfully larger than food, but they are also somewhat less documented in the sense that industrial is multiple different verticals. Right. There’s chemicals hazardous, which we have, which we do customers shipping that kind of product. There’s different types of polymers and solvents. And I wasn’t in a junior major, so I’m kind of reaching the frontier of my understanding here. But, yeah, so there’s a lot more. And a third, or third is just kind of what is readily available consensus data. And you go further than that. We know there’s a lot more.
Brett
What do you think that split will be five years from now? Do you have thoughts on that yet? Or has that become clear? Like, do you think it’s always going to be a third, a third. Do you eventually see, like pharma booming and that’s 90% of the business, or TBD? Still, still waiting to figure that out as you go deeper in the market.
Jason Park
I mean, we know that the d two C food category is growing substantially. We’re talking about the demographic shifts. And a quick aside, and interestingly, some people say it’s not growing because the publicly traded companies seem to be shrinking, but that volume is actually going to thousands of more specialized providers. Just like I want a certain type of jeans and so I go to a certain store for that online. And same thing, psychiatry continue to grow. I would say that pharma is, the kind of attractiveness of pharma as a market is that it is highly inelastic because people have to take medications, and medications are manufactured and large, but I don’t know what the manufacturers are. But yes, people have to take their medications. And as you go from food to pharma to industrial, you get into increasingly mission critical applications and use cases.
Jason Park
And so I think that’s kind of how you think, how we think about these markets, that they do behave differently. They’re all large markets. There’s $76 billion worth of spend on just warehousing, shipping and packaging on perishable parcels in the US last year. And so. But these markets each have their own kind of dynamics, which really makes for a very kind of balanced portfolio, so to speak.
Brett
Is that hard serving such different markets. Like, is the messaging very different? Is the value prop different, or is the value prop really similar, regardless of if it’s industrial versus pharma versus food?
Jason Park
So we know through lots and lots of validation and insiders and direct observation, et cetera, that the need and the problem is exactly the same, because you are trying to put ice into a box and you are trying to ensure that box survives up to two days transportation and do that without massive costs. And we know that’s the case. As you go from one vertical to another, the selling message change, the changes, the groups of customers change, and how you reach them changes. And in your case of farmer in particular, you have HIPAA regulations. We’re fortunate that actually everyone on our engineering team used to work in healthcare for a completely kind of just coincidence. And so we do know that space well, that’s the type of thing, but it’s incremental, solvable, go to market and product, just work that you need to do.
Brett
When I did the intro, I introduced you as a perishable e commerce fulfillment platform. Is that the market category? Did I have that right? Or what’s the market category that you’re in and customers are buying?
Jason Park
I’m glad that you asked that question, because we, it’s funny, we get asked with our order management systems, or OMS platforms and their WMS systems are warehouse management systems. And we always get asked, are you an oMs or are you a wms? And the reality is a little bit of both and kind of around the OMS as well, which is not a very helpful answer, but to your point, it is, I’d say, you know what we’ll call it B2B vertical SAS. Right. We are specialized in this very particular application that exists across many different industries and many different verticals, but they very specific use case. And you know, the. Sorry, I’ll have to turn it up for a second. The, oh, we have the old message something.
Jason Park
When you really take a OMs and WMs, even the fact that distinction exists is kind of honestly why, starting from that level, why this problem is not getting solved? Because those boxes and categorizations make sense for dry shipping. Wherever. You’re just trying to get your costs as low as possible in every single step of the process. And whereas with perishable parcels, it starts in as high level as where do I ship from? I need to have a lot more warehouses. Those warehouses need to be placed a certain way. And so this is, we’ve got this functionality, interactive analytics in the platform. It starts there, then it’s deciding which warehouse even gets an order to begin with based on all those conditions and based on all those real time factors.
Jason Park
And so you’re doing so much of this work upfront just to figure out what your options are. And then it kind of gets more and more into the traditional OMs and WMS spaces. And so in our case, we play nicely with any existing tech stock. We integrate into, you know, many different OMs, Shopify, ERps, et cetera. We can integrate into WMS. It’s an interesting, we get asked to integrate into WMS systems by three pls and brands who do fulfillment a lot less than we expected, just because, you know, they’re kind of, most wmSs, again, are kind of force fitting certain functionality to make, you know, to make these wireless work through Coldcart. We take things down to these sort of pick ticket and shipping label levels. So what actually happens to the box? We can feed that information wherever it needs to go.
Jason Park
The WMS has got to get into things like staffing, optimization and scheduling and how many steps you take and things like that. We don’t do that kind of thing. For a business that had very little technical capability to begin with, they actually are able to use this as a wms light.
Brett
Got it. Okay, that all makes sense. What about from a marketing perspective? What’s the general marketing strategy look like if you were to summarize it?
Jason Park
Yeah, so we try to, I think, anything go to market. We try to think of it the way you think about product. So who is our Persona? Right? Obviously, I think people generally start there as good practice, but thinking of this as really a user journey. And really this is still the same journey of your user. This is just their journey before they actually sign up for your product and get in. And so all of those different steps, or quote unquote, jobs to be done, in this case, what job am I trying to do? I am trying to solve this problem related to my perishable fulfillment and where am I going? What information am I seeking? And for us to kind of look at that, just like we would have product development and say, where can I add value along that way?
Jason Park
I think there’s a very important, nuanced distinction between how can I reach this audience and how can I add value? Because it leads you to different places. And, you know, we really, I don’t want to keep losing my thoughts train about today. It was because my son kept me up. And we really try to think of it in those terms and whether it’s in our marketing, whether it’s in our sales process itself, how can we create value? And if we can’t create value or solve some kind of a problem for you, even if it’s just informational, why would you even look at our product? Why have we earned the right to any more of your attention?
Brett
If you reflect on the go to market journey so far, what would you say has been the most important go to market decision you’ve made, and how’d you arrive at that decision? Take us behind the scenes on how that was decided.
Jason Park
You know, I, I would say that the most important go to market decision we made was almost to not go to market as much in the beginning. And so as some background in this space that ultimately Coldcart becomes the fulfillment and shipping process for all the brands and manufacturers who use us, for all of the three pls and warehouses who are on the receiving end of this work. And so when we talk about things like minimum viable product, in traditional startup parlance, the borrowing minimum viable product is very high in this space. Especially when we talked about what’s at stake in these shipments and how risky and horrible they already are. And so out of the gate the bar is very high to earn the level of trust needed to become someone’s fulfillment process.
Jason Park
And so we contradict what you read in sort of traditional, conventional sort of startup thinking, that we did a lot more upfront, both in terms of time as well as, frankly, capital to build this product kind of end to end. And were in a paid beta mode for a very long time where we had, our goal is three, four customers at a time. And I, were, you know, we had the foundation of the platform, but then were really building the true capabilities, as you know, with, as were powering these real shipments. And you know, there are a lot of arguments, or one could ask the question at that point, you know, why not seven customers? Why not ten customers? Why not 15 customers, you know, should you be trying to grow all the time?
Jason Park
It’s like, well, you know, that’s the type of question you sort of wake up in the middle of the night and really agonize about. And I did for about a year, period. But for this business and this use case and this customer base, the better decision was to be more methodical, upfront about how much you are willing to grow relative to the maturity of your product. And the flip side of that is that now that we’re past that point, the product is enterprise grade, it’s industrial strength, and our product will not be the reason that we cannot grow like it happens with many companies just because you kind of move fast and you got to make some technical compromises and those come back to bite you in meaningful ways later.
Jason Park
We really tried to incur as much of that upfront so that we wouldn’t, our product could earn the trust, and that it now is kind of working in reverse on the other side in our favor.
Brett
Were there any points during that time that you doubted that strategy? Did you ever have any thoughts of, like, oh, we need to generate revenue now, or were the investors very much on board with the idea that it was going to take time and you weren’t feeling that pressure to generate quick revenue?
Jason Park
Oh, I feel that pressure all the time. I think the team really appreciated in the sense that usually what happens in engineering is someone sells something, some founders, and they sell something, and you just have to death March until it gets done in some natural time schedule, that this was very much, were kind of, we letting the health of the product set the pace. It seemed like it. Every board meeting I get asked, should we be hiring a salesperson? Should we put in more effort into this? And they understood it, but I could tell it’s one of those where I understand it. I believe the argument, but, boy, I wish were not just doing it the way I’m used to. And now, obviously, they’re seeing it now, and we brought this group of new investors as well recently. They’re seeing the benefits of it.
Jason Park
But that was a really deliberate choice. That was a very significant decision that we made early on, and that’s the type of thing that could go the wrong way. That’s a risk to take, and for us, it was the right risk. But, yeah, absolutely. I think that was the most important or significant go to market decision we’ve made so far, was to go to market less than we could.
Brett
It’s a good answer. I like that it’s different from what we normally hear. I want to go back now, circle back to the start of the interview. So you had mentioned the identity protection platform. I believe that was at Allstate zero to 100 mil. What was your biggest takeaway from that experience that you brought to this company here? So you say that we’re going to do the same thing. We’re going from zero to 100 mil and beyond.
Jason Park
Yeah, this will sound really strange, but consumer identity protection and I, perishable parcel shipping, are a lot more similar behind the scenes than people I think would just assume. Because at the end of the day, you’ve got a physical operation in the case of identity protections, that you have literal fraud investigators and analysts who are researching people’s identity theft issues. That’s a very high volume, high efficiency operation. You also have a very wide variety of software solutions, none of which makes sense to a regular person individually, like as people understand VPN’s, but monitoring every sort of peripheral aspect of your different devices and your different Internet activity and such, and making that all work into a cohesive, singular solution that people can actually understand and people can actually consume.
Jason Park
You know, average persons are going to go get 17 different cybersecurity solutions, most of which are going to be outdated anyway in a year or two because people figure it out. So you got to stay ahead. That’s the orchestration aspect of it is really not that dissimilar on the back end, but I’d say so that was, I’d say something else surprising, but I would say in terms of like, what is, you probably even want like painful lessons and things there, you know, painful like realizations. And I’d say that in that case, and it’s true of cold card as well, in both cases, when you’re building something and you’re building it very fast, people’s roles change so quickly, and the things that make people’s jobs hard change so quickly.
Jason Park
And it asks a lot of people to essentially go through what would be through ten years of traditional company progression and career development, et cetera, in two years, right? Because you’re thinking about business, it literally goes from zero to a million plus revenue in about 13 months, right? A hundred thousand dollar revenue a year business is very different from a million dollar revenue a year business. And now, you know, we’re much bigger than that, and the needs are different as well. And so I think a lot of companies traditional approaches, I always love this framework of kind of knowledge, skills and talent. Knowledge is facts and figures and things you know about an industry or a line of work. Skills are things that can be taught and practiced. Like using Excel is a skill.
Jason Park
Anyone can learn how to do it if you just do it enough. And then talents are really who you are, you know, do you take initiative? Are you comfortable with ambiguity or not? And you always have to almost, you have to hire for that in the opposite order when you are running a startup versus traditionally you start with there. What do they know? Have they spent seven years in this space? And do they know how to use these five tools or project management software or whatever? And it’s a lot harder to screen for talent than it is to screen for. Can you do these five things? And it’s also, I think, harder to help people understand.
Jason Park
Well, that’s kind of where the task comes, is like the people who really are right for this and really kind of fit and grow and scale up with the business don’t expect a level of constancy and expect a level of structure. And the vast majority of people starting here, because it’s kind of brand new education system, expect to say, what are the five things I’m supposed to do today, etcetera? And so it’s very hard for a company to know who those people are. It’s very hard for those people who know which side of the fence they are on that and, you know, very talented people who sort of said, look, this isn’t right for me, or maybe they were the right kind of person at the time, and then the business needs change, etcetera.
Jason Park
And there are others who kind of, for them, that is unbounded upside that, you know, maybe they were overly structured in environment four, and now they’ve really got the room to run and grow and kind of level up. And so it works in all directions. That could be a positive thing, but that could also be a very hard thing.
Brett
Final question for you, since we’re up on time here, let’s zoom out three to five years into the future. What’s the big picture vision look like?
Jason Park
Yeah, so it’s fun. We’ve got. Sorry, start over. I was taking a drink. It’s funny. We’ve definitely got our numerical goals and our financial goals. And as the team will always remind me that most people don’t get excited as, don’t get as excited about seeing numbers on a page as you do. So I won’t go in that direction, but I’ll go more into the real macro, like what is the story we are trying to write? What will our impact look like in the long run? And then three to five years, we will be much further along on this than we are now. But David, I keep bringing up this number, about 3 billion perishable parcels growing to 9 billion, because that’s a lot of. That’s a lot. That’s a lot. That’s a lot of economic activity and business activity.
Jason Park
And if we do our jobs right, more of those companies can be successful. More companies can enter these types of businesses. They won’t have to throttle their growth anymore because, oh, it’s too expensive to ship to the midwest, and that lowers the cost of doing business in these categories. But what happens when you lower the cost of doing business? You can also create new price points, and you can create kind of new, different product segments that reach people in different ways. So let’s use the example of meal subscriptions, right? Premium category. Everyone says the premium category, you have to be at least dollar 60 in order just to even be in the category. Who really needs five meals delivered that they can just microwave and eat every week?
Jason Park
People who live in food deserts, who don’t have access to a grocery store, where the parents are working multiple minimum wage jobs, the kids are laying themselves in the house. And, you know, they may be craft macaroni that they can meet. Nothing has craft macaroni. But, you know, options are limited right now. You cannot go after that market. You cannot serve that market because your minimum price point, $60 an order. But the more you can bring that down, we’re talking double digit percentage reductions on fulfillment of shipping, which is anywhere from 30% to 50% of your sales. So you start to open up these new categories. There’s another aspect of this that I think this is the nice thing about our businesses. All incentives are aligned for the greater good. So the better we do our job, the more we reduce spoilage.
Jason Park
Yes, you reduce refunds. But your crab cow shipment, that wasted food. Every time you think about these companies, five to 15% of their product that they sell is waste packaging. These shipments are over packed. And the specific term this industry uses is packing like it’s going to Phoenix in the summertime. Because traditionally, you can’t change your sops. You can’t change your fulfillment process on every shipment like you can with Coldcart. So you pick a packaging configuration, you stick with it. And if only the US was all the exact same temperature and weather all the time. And so we’re reducing packaging in these boxes by upwards of 20%. And that is real excess materials, waste that is now not getting used. And that doesn’t even start to get into things like cross utilization of different capacity.
Jason Park
And can you put more boxes on the same refrigerated truck? That type of thing. So if we do our jobs right, cost of business comes down. More people and more businesses can benefit from products that by necessity need to deliver. Part of the value proposition is that it arrives in the box, which is a lot of them, right? And you actually take a meaningful, you have a meaningful impact on carbon footprint and waste. And that’s the nice thing about being in this business, is that some businesses kind of, you benefit from doing evil things. And so you have to do unnatural things to, you know, kind of give back to the world. In our case, if we just do our jobs, we will create financial benefits and we will create social, environmental impacts and our benefits.
Jason Park
And so that’s the nice part about doing this job.
Brett
So it’s a win win across the board, then. It sounds like that’s right.
Jason Park
Other than, you know, wishing for a new pandemic, which I don’t wish for, some of our team said they’re like, she’s another pandemic. I’m like, yeah, that’s the one exception. But, you know, we’re not going to do that.
Brett
But if it happens, you’re ready, we can help.
Jason Park
Let’s put it that way.
Brett
Amazing, man. I love it. All right, this has been a lot of fun. We’re going to have to wrap here. Before we do, if there’s any founders listening in that want to follow along with you, where should we send them inside?
Jason Park
I’m on LinkedIn, like every Founder, and so I post pretty regularly. And then coldcart.co. So we are very soon launching a content section where we will be posting original content, industry insights, different articles and povs. So that will become much more of a living, breathing kind of, you know, outlet. So encourage people to go to coldcart.co. Amazing.
Brett
I love it. Thanks so much for taking the time and cold, no crowd cow. If you’re listening, hire these guys. I’ll come back as a customer.
Jason Park
You’ll be talking about how great your crowd trial experience was and how you’re now.
Brett
I love it. Thanks so much, man. Appreciate it.
Jason Park
Thanks so much. Crap.
Brett
All right, that was awesome. Yeah, I didn’t even.
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