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I'm not 100% sure this is the right way to calculate costs, but those numbers seem reasonable to me: You give people their first shipment free, which you'd nor

I'm not 100% sure this is the right way to calculate costs, but those numbers seem reasonable to me: You give people their first shipment free, which you'd normally charge $60 1-in-3 people continue after that, so your cost to acquire 1 customer was $90. Tack on an extra $4 for the ads that got them to sign up. If 1-in-7 people continue, you get into the 400s. Those numbers seem pretty believable to me.

mattmanser 9y ago
What you charge $60 for shouldn't cost you $60, but I generally support the point. I think you're downplaying the $4.
- naravara 9y ago
  I think he's talking in terms of unrealized revenue, not cost of production.
- naravara 9y ago
  I think he's talking in terms of unrealized revenue, not cost of production.
deleted 9y ago
[deleted]
clay_to_n 9y ago
Plus all the initial marketing costs to get those people to sign up in the first place. Which, for an expensive service like this, where very few people are interested, seem significant.
- clay_to_n 9y ago
  (Not to imply that it's a bad service - just meaning that the CAC is a lot higher for Blue Apron than an iOS app - they have fewer, but more valuable, customers.)