Smash Notes
Why Could Food by People Not Make Money on a Cookie Order?
at 45:28
Answer
Bernard Huang says the unit economics at Food by People, his marketplace for home-baked goods, never worked. A ten percent fee on a $24 order for a dozen cookies was about $4.80. He calculated that the company would need on the order of 200 of those orders a month just to make $1,000, and a buyer often did not return. Big catering orders were a different shape. The middle of the book is where he says they got hurt. He did not fully see the model while he was inside it. What he sees now is that a small cut of a small basket could not carry the company, no matter how many home bakers listed cookies.
Where this answer comes from
People
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