When Chieh Huang started the household goods and grocery e-tailer Boxed out of his garage in Edison, New Jersey, in 2013, lofty workplace benefits were hardly on his mind.
“When we started this business, I wanted to sell bulk goods to people all around the country,” he says. “Social change through toilet paper was not on the agenda.”
Perhaps not, but these days Boxed — a venture-backed company — is getting as much notice for the generous fringe benefits it offers to its more than 200 employees as for the company’s smart business strategy.
Beginning in 2015, Huang began footing the bill for his employees’ children to go to college and a year later offered to pay up to $20,000 for employees’ weddings. While funding these major life events has certainly garnered Boxed its share of headlines (including ours), it also speaks to the thornier issue of how companies are attempting to attract and keep the best workers. At a time when the war for talent is especially fierce, being able to offer more than a fair salary and two weeks’ vacation is crucial.
“After leading my first company, [gaming start-up Astro Ape], I realized that it doesn’t matter how powerful or big an organization is. If all of its people walked out one day, that organization is worth zero the next day,” says Huang, who practiced corporate law at Proskauer Rose before getting the itch to start his own company. “That was a huge epiphany for me, and it made me realize that I’m only as good as the people I lead.”
Since its launch four years ago, Boxed has been growing robustly with a simple concept: Give shoppers the convenience and price savings of buying everyday items in bulk (think brick-and-mortar wholesale clubs, like Costco or BJ’s) and allow them to do it from an app on their smartphone and without an annual membership fee.
The company addresses several demographics with this approach, including millennials that don’t have the time or patience to wend their way through a giant warehouse club or the transportation to get there. In fact, roughly 80 percent of Boxed customers are between the ages of 25 and 44, according to the company. The other group that’s turning out to be Boxed fans are shoppers in rural areas that don’t have a Costco or any other warehouse format nearby. Four fulfillment centers (Union, New Jersey, Dallas, Atlanta and Las Vegas) handle orders from shoppers throughout the United States.
Last year Boxed — backed with $132 million of venture capital from firms such as DST Global and GGV Capital — rang up sales of $100 million, double what it did in 2015. Part of its success has been in curation: Boxed offers about 1,500 items on its site, compared with around 4,000 at a typical Costco. Huang says the average order is $100 and contains about 10 items, so most qualify for the free shipping that starts with a $50 order.
Funding life-altering events
The idea to pay for his employees’ kids to go to college came about after Huang visited the Atlanta fulfillment center in 2015. He discovered that only about two of the 20 or so workers there had their own cars. The rest had a long walk just to get to public transportation to come to work. He was determined to do something to remedy the situation, and “the most obvious answer was to get everyone a car,” Huang recalls. “But I wanted something that was going to be more long-lasting and really empower upward mobility. In my life, that was my education.”
Huang contributes a portion of his salary to a nonprofit foundation and writes the checks for those tuition bills from there. Though he won’t say exactly how much he’s spent, he does say he’s paid for a handful of his employees’ kids so far.
The wedding payments came about by chance as well, Huang says. An employee in the company’s fulfillment center in New Jersey was working a second job to pay for both his mother’s medical bills and his own wedding. When he realized he wasn’t going to be able to save up fast enough to do both, he broke down crying at work and went home early.
“This is a very stoic guy,” Huang says. “So when I found out he had left, I called him that night and he told me what happened. He was working seven days a week, so I wasn’t going to say to him ‘work harder.’ We stepped in, and we paid for the wedding.” That was last spring.
Today the company has a policy where it will reimburse any full-time employee for their wedding expenses up to $20,000. Again, Huang won’t reveal how many weddings the company has paid for, but does say the average age of his employees is right in the middle of when most couples decide to marry.
Despite this corporate largesse, Huang is quick to point out that he’s quite aware that he’s not running a charity. “Every company has to decide what they want to focus on, and for us it’s paying for these life-altering events for our employees,” he says. “It’s not the cheapest program, but then, we don’t look like a typical start-up.” Huang says there are no beer kegs, Ping Pong tables or free lunches every day of the week. “We’re frugal, and we use our money to fund what we think are really impactful and meaningful things,” he says, noting that fewer than 10 full-time employees have voluntarily left the company since it started.
As much as Huang’s entrepreneurial spirit influences his focus on rewarding employees, his upbringing has played an important role as well. As the son of Taiwanese immigrants, he recalls his parents’ struggle to make ends meet while raising him and his older sister in Edison, New Jersey.
Every other weekend, the family trudged out to what was then a Price Club so his parents could stock up and get the best prices on the household goods and food the family needed. However, one area where his parents wouldn’t scrimp was on Huang’s education. “They understood what a good education could offer me long-term,” he says. When it was time to go to college, Huang was able to attend Johns Hopkins University, where he earned a bachelor’s degree in economics.
A law degree from Fordham University soon followed, but by 2010 the urge to start his own company was too strong to ignore. He started his gaming company and then sold it to Zynga in 2011. By 2013 he was working out of his garage to get Boxed off the ground.
The idea to go from gaming to paper towels and tissues was not as odd as it might seem, he says. When Huang married and moved his young family to New York City, he missed having the warehouse shopping option he grew up with and figured other young families did, too. Updating the concept with mobile seemed like the natural thing to do. “Less than 2 percent of consumer packaged goods are sold online, so there’s tremendous growth available if it’s done right,” he says.
So far, the company is doing well with its formula — and its timing. Consumer packaged-goods companies that wouldn’t even take a phone call from Boxed four years ago are now “rolling out the red carpet for us,” Huang says. “All these companies are chasing growth, and the only double-digit growth they can get these days is online.”
In the meantime, Huang says Boxed can’t find talented folks fast enough. “We get our fair share, but I wish we could get even more,” he says. With a reputation for generosity and a concept that’s growing, Huang is likely to see that wish come true.