Blue Apron is spending more than $400 for every new customer - and the results show why the company is doomed
The meal kit company is spending more than $400 to recruit each new customer, despite only making $236 per customer a quarter, Eater reporter Whitney Filloon said in an interview on Cheddar on Monday.
When Blue Apron filed for its IPO in June, the company claimed that it spent, on average, $94 per customer to convince them to buy a subscription. At this point, the vast majority of Blue Apron's marketing costs are going towards customer acquisition.
However, as Recode pointed out in June, that figure was based on the timeframe of 2014 to the first quarter of 2017. If you use the marketing figures from the last 12 months - dividing marketing costs by customers added - the company was spending roughly $460 for each new customer.
At the same time, the amount of money that Blue Apron is making per customer has declined.
In the first quarter of 2017, Blue Apron made an average of $236 per customer in revenue. In Blue Apron's filing to go public, the company claimed that cumulative net revenue per customer for the six months after their first order was $402 for people who joined in 2014, $451 for 2015, and $387 for 2016.
In other words, it takes more than half a year for Blue Apron to recoup the money it spends on bringing in each new customer, based on recent marketing figures.
Blue Apron has struggled since its disappointing IPO in June.
When Amazon filed a trademark application on July 6 for "prepared food kits," Blue Apron's stock sank 11%. And, on Friday, stock dropped 5% after news broke that the company could lay off 1,207 employees from its Jersey City, New Jersey facility, though Blue Apron said employees would have the chance to transfer to a new warehouse.
- Govt approves PLI scheme for making drones with outlay of Rs 120 cr, comes out with norms
- Apple transportation through drones to become reality in tribal Kinnaur district of HP
- Researchers develop device that uses sound waves to separate blood-based nanoparticles
- 5 Bihar villages to be developed into human-carnivore coexistence zone
- Delhi's air quality will likely improve from Sunday evening, says IMD