How is Boxed paving the way for a new type of wholesaler?

Paul Hill speaks to a US company blazing the trail for a new type of wholesaler


In 2013, US-based Chieh Huang was at a crossroads in his life and decided to launch Boxed from his parents’ garage in New Jersey. From the offset, he set out to make the wholesale shopping experience more accessible and convenient for shoppers across the US – from rural communities to city dwellers.

“We wanted to bring the price, convenience and simplicity of bulk shopping directly to everyone’s doorsteps,” he explains. “The popularity of smartphones gave us an opportunity to do things differently – so we took the wholesale model online, first with a mobile app and then with a website.

“That’s where it all started: seeing a huge opportunity to change a very specific problem for consumers. Within six years, we’ve grown into a digital wholesale retailer that’s disrupting the legacy model.”

Since its incarnation, Boxed has raised more than $250m in funding from investors such as Aeon, the largest grocer in Japan, and GGV Capital. “We’ve grown to become a platform where retailers can expand their reach to new millennial consumers and test out new services like express grocery delivery without building that infrastructure from the ground up,” he says.

As the co-founder and chief executive, Huang oversees company operations and the overall business strategy. However, he recently hired Boxed’s first company president, Prentis Wilson. He joined from Amazon, having launched and scaled its B2B operations. “With Prentis in charge of Boxed’s core retail business, I plan to spend less time on the day-to-day operations and focus more on the company’s long-term strategy,” he adds.

Positioning itself as a “onestop shop”, Boxed provides a range of items such as crisps, snacks, beverages and cleaning supplies. It also continues to expand and diversify its inventory by working with vendors as well as expanding its own private label brand – Prince and Spring. “One of our most recent partnerships is with department store Century 21, and together we’ve introduced new apparel, accessories, cosmetics, and home goods items to the Boxed site.”

It also has an online grocery delivery service in selected US cities named Boxed Express, which offers an expanded selection of fresh grocery products to its customers. The service is available in New York, Atlanta, Boston, Dallas and New Jersey, with customers in these markets possessing the option to add fresh grocery items, such as produce and meats, to their orders.

Customers are able to group book and automatically split the bill

In regard to the customer base, he’s opened the wholesale market up to non-business customers. “All consumers who value accessibility and convenience as a part of their shopping experience shop with us. Our customer profile is very diverse and we cater to everyone from heads of households to parents, senior citizens and college students,” he says. “We also see popularity among office managers, and because of that, you’ll find our snacks and office supplies in the break rooms of businesses. The geographic makeup of our customers also varies, but we guarantee delivery to 48 states within the contiguous US.”

Boxed serves millions of registered customers within these parameters, as well as Fortune 500 companies that use it to stock up on office supplies and snacks. The average size of a Boxed order is 10 items, with Huang claiming that the firm’s competitors average around two. “Our model encourages 70% of registered users to become repeat customers,” he says.

But what gives Huang’s company its USP? “We offer great value, convenience and a simpler wholesale shopping experience to meet the needs of today’s on-the-go consumers,” he explains. “We’ve migrated the traditional warehouse club to a mobile commerce platform, and by doing so, we provide huge savings in time and money for millennials who don’t have the means or patience to shop at the traditional membership clubs.”

It also offers the unique concept of group ordering, which allows its shoppers to build a shopping cart with friends and family, even if they’re not all Boxed customers. “You can see who’s buying which items and automatically split the bill via Venmo payment,” he explains.

“Additionally, once every order is placed, shoppers even receive a selfie image of their Boxed with all of their products inside. We are always looking for innovative ways to simplify the shopping experience for this tech-savvy generation.”

Boxed guarantees delivery thought the contiguous US

Another unique aspect is the business’ Rethink Pink initiative, in which Boxed has made a commitment to absorb the costs of the sales tax associated with women’s hygiene products, such as razors, body wash, deodorant, tampons and shaving gel.

However, like certain wholesalers in the UK, Boxed faces a challenge of drawing in the right talent. “While I’m not going anywhere, the idea is that if I somehow disappear tomorrow, the company is able to push forward without me. We work hard to hire the right people and take care of them to ensure the health of the business in the long term.”

But with an increasing presence throughout the states, Huang is managing to make Boxed an attractive proposition for fresh talent leaving college. Talent that will help him in his quest to scale up the business. “In the retail industry, the consumers make the rules.

“Because consumer demand evolves so quickly, we’re always looking for new ways to anticipate those changes and evolve the business alongside new trends,” he explains.

“We have a great team of innovative minds on our side to help us predict the future needs of our customers and retail partners alike.”

As Boxed continues to innovate, influence and scale up, it is managing to blur the boundaries of what a wholesale operation is capable of. With Asda already launching a membership-free operation in Bristol, don’t be surprised if the Boxed model is taken up on this side of the Atlantic.

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Paul Hill
Paul Hill is the Editor of Better Wholesaling. Paul can be found on Twitter on @BW_PaulHill, or can be contacted via paul.hill@newtrade.co.uk and 020 7689 3376.

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