Latest / Small Business Success with Fexingo: Local Companies, Main Street Stories, and Community Commerce / How a Local Cheese Shop Used a Mystery Box to Beat the Supermarkets
Transcript
- Lucas: So earlier this week I stumbled onto something that, on the surface, sounds like a gimmick — but the numbers behind it are genuinely impressive. Luna: Okay, I'll bite. What are we talking about? Lucas: A 400-square-foot cheese shop in Portland, Oregon, called The Curd Nerd. The owner, Jenna Voss, launched a weekly Mystery Box subscription two years ago, and it now accounts for over 70 percent of her revenue — roughly $1.2 million a year. Luna: Wait — a mystery box for cheese? So customers pay upfront and don't know exactly what they're getting? Lucas: Exactly. Every Monday at 10 a.m. Pacific, a limited number of boxes go live on her site — usually 150 to 200 — and this summer she built a waitlist of 800 people. The boxes sell out in under 10 minutes most weeks. Luna: That is wild. But isn't the risk that customers get something they don't like and cancel immediately? Lucas: You'd think so, but her churn rate is under 5 percent. And that's the part I want to drill into — because the mechanics she uses are really replicable for other small retailers. Luna: Okay, lay it out. What are the three things that make this work? Lucas: First, the limited drop window. By making it a specific time each week — and capping supply — she creates genuine scarcity. People set reminders. They tell friends. It's not fake FOMO; the boxes actually disappear. Luna: And the second? Lucas: A strict no-substitutions policy. If you're allergic to a certain mold or you hate blue cheese, you can note preferences in your profile, but otherwise you get exactly what's in the box. That discipline reinforces the idea that the shop curates, not customizes. Luna: So the customer is buying into Jenna's taste, not their own shopping list. Lucas: Right. And the third piece is a referral program that gives existing subscribers first access to limited releases — like a seasonal truffle cheese or a rare aged gouda. That turns subscribers into evangelists. Luna: What's the economics look like? Because a $40 box of cheese — after shipping and the cost of goods — can't leave much. Lucas: Actually, the margins are surprisingly healthy. Jenna told me her gross margin on the Mystery Box is about 62 percent. Compare that to a typical supermarket cheese section, which runs around 25 to 30 percent. Lucas: Three things: she buys direct from small producers in Europe and the Pacific Northwest, skipping distributors. She uses seasonal, perishable inventory that would otherwise go unsold — cheese that's approaching its peak, not past it. And she includes local crackers or honey from other Portland makers, often at wholesale or barter rates. Luna: So the box is a vehicle for moving inventory that's harder to sell by the wedge alone. Lucas: Exactly. The supermarket can't do that because they're centralized. The local shop can pivot on a week's notice if a batch of aged cheddar is ready early. Luna: And the subscription model smooths cash flow, which is huge for a small perishable business. No more guessing how much to order. Lucas: Jenna actually said that before the subscription, summer was her worst season — tourists would buy single wedges, but locals were traveling. Now summer is her highest-revenue quarter because subscribers auto-pay. Luna: I love that. It's a classic predictable-revenue fix, but applied to a very tactile, unpredictable product. Lucas: And that's the counterintuitive part. Usually we think subscriptions work best for commodities — razors, protein powder, contact lenses. Jenna proved the opposite: surprise and curation can command a premium. Luna: But the model has to be airtight. One bad box and you lose that trust. Lucas: She's very careful. Each box includes a handwritten note explaining the selections. She films a short unboxing video every Monday after the drop. And she personally tastes every cheese that goes into a box. Luna: So there's a human touch that algorithms can't replicate. Lucas: Exactly. And that's the bigger lesson for small retailers: you can't compete with Amazon or the supermarket on convenience or price, but you can compete on taste — literal and figurative. Luna: What about scaling? Could another shop in another city copy this? Lucas: Jenna thinks so, with one caveat: you need a product where variety is a feature, not a bug. Cheese works because no two wheels are identical. Same with coffee, tea, hot sauce, chocolate. Luna: Or wine. Or craft beer. Or even pantry staples like olive oil. Lucas: Right. The model is flexible, but the core — limited drop, no substitutions, referral perks — has to stay intact. If you start customizing too much, you lose the scarcity and the margin. Luna: It's almost a retail version of a CSA box, but with more curation and less commitment. Lucas: Exactly. And the numbers prove it. Since launching, The Curd Nerd has grown from a single brick and mortar to two locations, and the subscription alone covers all the overhead. Luna: That's the kind of story that makes me think: what if more local retailers thought like curators instead of just merchants? Lucas: Yeah. And if these conversations have moved your work forward in some small way — maybe you've tried a new pricing model or thought differently about customer loyalty — consider supporting the show. It keeps us ad-free and independent. Luna: Absolutely. Listener support is what makes this possible. If you're able, you can find us at buy me a coffee dot com slash fexingo. Lucas: And back to the cheese shop — one last stat I thought was telling. Jenna says 40 percent of her Mystery Box subscribers have never set foot in her physical store. They found her through Instagram or word of mouth. Luna: So the subscription is also a customer acquisition channel for the retail location. Lucas: Exactly. And when those subscribers do visit, they spend an average of 30 percent more than a walk-in customer because they already trust the curation. Luna: That's a virtuous cycle. The subscription builds trust, the trust drives retail visits, the retail visits reinforce the subscription. Lucas: And that's the playbook. It's not about being cheaper than the supermarket. It's about being more interesting. Luna: I'm honestly going to think about this the next time I walk past a cheese counter. Maybe I'll take a chance on something I've never heard of. Lucas: That's the spirit. And if you do, let us know — we might do a follow-up on listener experiments.