Candy Crushed: How My $100 Candy Empire Collapsed

TLDR: I sold snacks in high school but got squeezed out by competition

Intro While high schoolers these days are busy being Bitcoin millionaires and coding unicorn startups, I had the ingenious idea to sell candy and soda to my friends, Looking back, I actually learned a lot of business concepts from the venture and I feel like readers would appreciate learning some business basics while I describe the fall of my candy empire.

Stroke of Genius - My Market Opportunity In freshman year of high school, I was dismayed to find out the campus swapped all the snacks in the vending machines to bland health foods and the sodas to Powerades. In the midst of that depressing period I thought "Hey, I miss having those snacks and I bet everyone else does too. Why don't I just sell my own?"

Broke High Schoolers - My Target Market I don't know about your high school, but freshmen are broke. Even those with money sometimes went to school with no cash (before Venmo). $1 was the only price I could charge because most people only had $1 or 4 quarters. For my homies, I would extend a line of credit and keep tabs with a tiny notebook.

The Local Dealers - My Supply Chain My biggest issue with the whole operation was getting consistent supply. I was a kid and couldn't order nearly enough at once to buy wholesale. In order to make a profit off $1 sales, I had only 3 suppliers:

1. Clearance sales from my local convenience stores
2. Bulk order boxes from Costco
3. 99 Cent store deals. Relax. I made sure expiration dates were a few months away

I often only had Twix, Hershey's Cookies & Cream, and Pepsi because they were on sale the most often at 50 cents each and sold the most volume at school.

Showtime - My Sales Channels Monday to Friday, I would bring a swim bag filled with chocolate bars and an icebox with 9 sodas. I had 5 class periods and lunch to clear my inventory each day. 3rd and 4th period + lunch were my prime times. I would keep the chocolates on me throughout the day but kept the soda mostly in the locker since they only sold well at lunch.  Teachers didn't appreciate business going on in the classroom (even though a couple would buy some) so I limited commerce to inbetween class periods. Soda easily cleared out during lunch while my bars were great between classes. I had a working model but I was stuck in the same classes each day so my reach was limited.

Growth - My Scaling Strategy At a certain point I decided it was time to scale the business and find ways to reach more people. I was able to pick up 2 friends as additional sales channels and made a profit sharing agreement with them. When I first came up with this, my goal was to hit more students in classes I couldn't reach, sacrificing some margin for bigger volumes. I would bring boxes of chocolate to school to supply my sellers who would then sell in their own channels and we split the margin. Unfortunately the execution of this didn't really pan out; my sellers were in the same grade as me and a lot of the students we sold to overlapped so we were cannibalizing sales from one other. Also, the incentive for them to sell was lower than mine since their commission per bar is split with the supplier, me. In the end I scrapped the expansion because getting it right would take too much extra work.

Attacked On Two Fronts - My Downfall When I was the only player in town, things worked well. Sure there were other candy sellers but our territories infrequently overlapped. Then one day, 2 competing sellers emerged and with competition on both fronts in price AND quality, I knew the good times were ending:

• Shoebox Guy: One guy gunned for selection and had a wide variety of gummies, chocolates, and snacks organized in a shoebox. He emphasized diversity in choices and people loved that. I didn't like selling most of what he had because my suppliers didn't have good prices on them. Still his presence took a lot of my chocolate bar market share away.
• Dynamic Duo: The two sellers worked together to sell chocolate bars and Shasta Cola. For those who don't know what Shasta Cola is, it's a brand of soda in the discount stores that sell for less than a quarter a can. At the end of the day, high school students are low low end consumers and care a lot about price. Dynamic Duo sold their Shasta Cola for 50 cents! There was no way I could compete with that selling Pepsi and I didn't have easy access to Shasta Cola. I knew their presence became a problem when I wasn't clearing out my icebox at lunch anymore.

Leaving the Business - Not Worth At a certain point I hung up the towel and stopped selling. It wasn't worth fighting both fronts and there wasn't a large enough market worth competing for. Not going to lie, another BIG secondary reason I wanted to stop was because I ate too much of my supply. It's too easy to have a Pepsi and a couple of Twix bars each day when there's a pile of it on your table. As much as I disliked swim practice, sometimes it was probably the only thing holding me back from a heart attack.

Looking Back - Advice to My Younger Self Yeah yeah I get it. You're a kid, can't drive, and don't even know what "gross margins" mean but I'm still not impressed. Looking back I think I should have:

1. Stopped worrying about margins on each bar! You're missing a whole bunch of untapped customers by limiting your range of offerings. Additional volume would have offset the smaller margins.
2. Scale across grades, not just your friends. You need to branch out a little more to make sure there's no customer overlap.
3. Pay better attention to what people want. They asked for Sour Patch Kids, you did not provide. Sales would probably be better if you kept your ear to the ground.
4. Don't. Eat. The. Candy.

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