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Boxed's Huang on Amex Investment, Competing With AMZN (Audio) · Bloomberg Intelligence

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  Speaker 1: the wholesale experience for those without the time means or
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  Speaker 1: gonna be speaking to the CEO of Boxed about his
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  Speaker 1: Charlie Pellock. That's a bloom Bird business slash. You're listening
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  Speaker 1: to taking Stock with Kathleen Hayes and Pim Fox on
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  Speaker 1: Bloomberg Radio. Do you get tired of driving out to
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  Speaker 1: a place like Costco or Sam's Club to stock up
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  Speaker 1: on big, bulky items like well, paper towels. I go
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  Speaker 1: through a lot of paper towels. Would you like it
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  Speaker 1: if you could just, you know, go online and order
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  Speaker 1: those and have them come to your house for free. Well,
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  Speaker 1: that is the business model for Boxed Boxed Wholesale, and
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  Speaker 1: they're doing quite well, growing very rapidly. In fact, they've
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  Speaker 1: raised a hundred and fifty million dollars in funding to date.
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  Speaker 1: And imagine that just a couple of years ago, the
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  Speaker 1: founder and CEO was in his garage in Edison, New Jersey,
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  Speaker 1: just getting it off the ground. And that's Shay Wong.
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  Speaker 1: He is uh with me in our New York studio. Now,
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  Speaker 1: thank you very much for having me and and everything
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  Speaker 1: you just said. Literally that was the problem that we
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  Speaker 1: had in my family. And so that's what I want
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  Speaker 1: to do and solve the problem for myself and luckily
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  Speaker 1: a lot of Americans around the country have the same problem.
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  Speaker 1: So there you were tell us about that. You you
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  Speaker 1: were saying, gosh, I I mean, I actually kind of
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  Speaker 1: like going to place like Costco Sam's Club sometimes you
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  Speaker 1: walk around and you know, but I know a lot
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  Speaker 1: of people find it tedious. Yeah, I mean, you know,
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  Speaker 1: it really is for some of the folks that literally
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  Speaker 1: don't have the physical means too. So you figure folks
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  Speaker 1: that live in urban areas without a car, or if
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  Speaker 1: you're later on in life and you just can't get
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  Speaker 1: out of the house anymore. And so that's an audience
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  Speaker 1: for us. Also, people in the suburbs, you find that
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  Speaker 1: they don't have the time or the patients to go. Yeah,
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  Speaker 1: they have a car and they live in Texas, they
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  Speaker 1: can get to a Sam's Club, but they just don't
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  Speaker 1: have the time and patience with three kids to go
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  Speaker 1: in store. So did you ever think to yourself, oh, gosh,
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  Speaker 1: there's already Amazon, and then there's Jet you know, another
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  Speaker 1: East Coast competitor of Amazon to a certain extent, What
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  Speaker 1: made you think you get boxed off the ground? I thought, um, one,
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  Speaker 1: that that because it was solving a problem that I
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  Speaker 1: had that I looked around at what were my options
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  Speaker 1: as a consumed were and none of them were, like
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  Speaker 1: my kind of needs weren't exactly met, and so I
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  Speaker 1: thought there was there was definitely an opportunity there. But
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  Speaker 1: more so we knew from a business perspective we had
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  Speaker 1: to go with a different model. And so for us, UM,
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  Speaker 1: we don't have everything. We're very clear with the consumer
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  Speaker 1: that we're not going to be the everything store, but
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  Speaker 1: we have a thousand items large format only, and you
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  Speaker 1: get to discover a few interesting items as well. So
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  Speaker 1: what else besides toilet paper and paper towels, which to
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  Speaker 1: me are obviously the fill the car very fast? You figure, laundry, detergent,
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  Speaker 1: water does really well, beverages, chips, snacks, and right now
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  Speaker 1: about fifty percent of our businesses foods, household so everything
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  Speaker 1: to fill your pantry. Basically, so you ship for free?
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  Speaker 1: Are you making money shipping for free? Yeah? So the
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  Speaker 1: beauty of it is that our average consumer, our consumer
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  Speaker 1: on average orders about ten items. And so as you know,
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  Speaker 1: if you think about the variable costs online, um, once
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  Speaker 1: you get to a certain part, like once you get
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  Speaker 1: to a certain items per per order count, the variable
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  Speaker 1: costs of shipping that box actually flatlines. And so if
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  Speaker 1: you're adding ten items per card, then you're actually making
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  Speaker 1: margin on it. Now you you're one of your most
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  Speaker 1: recent big, high profile investments, and a very powerful one
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  Speaker 1: is American Express and they had the card relationship with Costco,
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  Speaker 1: which Costco ended. So now American Express Ventures announced to one, Well,
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  Speaker 1: you did a hundred you did a big, big round
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  Speaker 1: of funding with them. How much was it? Yeah, so
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  Speaker 1: our last round was a hundred million dollars and then
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  Speaker 1: m X closed just recently as well. So what does
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  Speaker 1: that entail? What is that? What did it cost you
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  Speaker 1: to do that? And what is it? What is the benefit?
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  Speaker 1: What are you getting out of it? It cost me.
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  Speaker 1: Luckily they were very good to work with so it
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  Speaker 1: wasn't like we had to they ground us away in
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  Speaker 1: a in a long drawn out negotiations, So it didn't
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  Speaker 1: cost us a lot um. But in terms of working
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  Speaker 1: together and what we think about, you know, how we
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  Speaker 1: think about jointly driving our businesses going forward. And so
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  Speaker 1: they obviously have wholesale customers where you know, now UM
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  Speaker 1: American Express charting JU nineteenth I think will not be
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  Speaker 1: accepted in store. And so if you if your card
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  Speaker 1: is not accepted in store and you don't have any
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  Speaker 1: alternative next to you, you literally cannot use that card anymore.
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  Speaker 1: But more so than that, I think we're working on
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  Speaker 1: initiatives for the future. So for example, UM now UH
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  Speaker 1: our customers don't need or they can check in or
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  Speaker 1: or check out with just their American Express credentials for example,
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  Speaker 1: they're logg in UM. But a lot more coming coming
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  Speaker 1: UH in the future. Well, you have to talk about
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  Speaker 1: your your your your your program you have for employees
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  Speaker 1: where you pay for weddings. So I wanted to spell minuts.
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  Speaker 1: It's not like we sit around and just think, okay,
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  Speaker 1: what what else can we pay for? You know, I think, Um,
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  Speaker 1: what I found was that, Um, you know, coming from
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  Speaker 1: a technology background, UM, you deal with engineers, you deal
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  Speaker 1: with like just office folks all the time, where especially
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  Speaker 1: in Silicon Valley, if you're making less than a k,
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  Speaker 1: it seems like you're slimming it right like. But now
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  Speaker 1: we have fulfilming centers, Now we have a physical part
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  Speaker 1: of our business. It introduced us to a whole another
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  Speaker 1: kind of world, at least you know, when I grew up,
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  Speaker 1: I grew up poor. It reintroduced me to to another world.
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  Speaker 1: And so for us, we had a very specific problem
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  Speaker 1: in one of our fulfillment centers. One of our stalwart
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  Speaker 1: packers actually cried on the floor during work and we
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  Speaker 1: asked him. I called him later that night asked, hey,
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  Speaker 1: I heard this was happening. UM, what's going on? And
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  Speaker 1: so ended up that Um, he was paying his mother's
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  Speaker 1: medical bills uh, and wanted to pay for his wedding
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  Speaker 1: at the same time and so that his mother could
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  Speaker 1: go in time. UM, And that the match just wasn't
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  Speaker 1: working out, even though he's working seven days a week
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  Speaker 1: and two jobs. And so I just felt like, at
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  Speaker 1: least I can't control what happens in outside of our
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  Speaker 1: our walls, but at least in a company that I run, um,
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  Speaker 1: I want to be able to fix the things that
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  Speaker 1: are wrong. And you paid for sw wedding, and now
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  Speaker 1: you pay for all employees weddings. Right, Yeah, so I
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  Speaker 1: think you're a courage A lot of people get married.
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  Speaker 1: It is well, one one thing I'll add it. It's
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  Speaker 1: just it just really is the the the employer employee
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  Speaker 1: relationship and so and I know that's a big, big
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  Speaker 1: thing for you, for you. Chay Long, CEO, co founder
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  Speaker 1: Boxed Wholesale. Check it out. This is taking stock on
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