Numbers don't make any sense. MSRP $13.50-$14.00, 50% taken by retailers, COGS $2.50-$4.00 (17%-30%), 1$ per (5%-7%) for production space (not sure if that is included in the COGS), so roughly 87%-72% total cost to produce. Then claims to have a 30%-40% profit margin? Plus, there are a lot more costs to operate a business outside of the pure production costs and seller royalties.
Those numbers were on larger retailers. So overall margins could be a lot higher. However profits seem to be slim. 30-40% on max 120.000 turnover caps the profit at 40.000-50.000. Nice but not impressive yet.
Yeah he didn't clarify where that margin was from. B2C or B2B. that $11k order was for 3k bottles, $3.66/ea.... Sold @ $14/ea, healthy margin for retailer but he's making like $1 a bottle there?
@@Bundalaba Yeah definitely not. I sell my artisinal handmade sauce for $20 a pop and my bulk sauce bottles for $10. With those total cost numbers he mentioned i would just give up lol.
00:01 Growing a hot sauce business while working full-time 01:58 Creating a hot sauce brand inspired by murder hornets 05:42 Growth from year one to present 07:38 Hot sauce production process and business operations 11:31 Started hot sauce business on weekends 13:29 Margins in retail and other sources differ. 17:10 Strong branding attracts customers 18:37 Starting a hot sauce business at farmers markets 21:47 Persistence is key in entrepreneurship Crafted by Merlin AI.
For all the haters down there... he is using a co-packing company and he still in the early stages of start up. This shit doesn't happen over night it takes time to build a quality brand that consumers trust and will show support for. The condiment industry is a 30.64 billion dollar a year industry, so there is plenty of room for growth, and worrying about the actual breakdowns of gains and losses. When you get to a point of the returns affording you to build a production plant to supply your own product is when the numbers really count, until then you have to pay dues by doing everything possible yourself, pounding pavement, cold calling, farmers markets, food events, etc.
this is exactly the blueprint that I need for my salsa company. I only managed to get as far as making the logo and nutrition label. I am stuck at the point of going to my local farmers market and setting up a stall.
@@theboringchannel2027 uhh...I said my salsa company. I have the llc, nutrition label, logo and a formula made already. Just that the marketing part and work has me delayed a lot.
@@manuelllanas1840 So you have most things, but not any product made, and are stuck on "marketing" to sell at a farmers market. I hope you realize that the business in this vid, with 10k a month is sales, is LOSING MONEY after rent, insurance, expenses and labor.
These guys are smart to sell merchandise. Their next step can be to start up burger shops/steakhouses and use their in house hot sauce in their outlets. This way, they could retail their hot sauce as well as merchandise in all their outlets
Thats why America is so powerfull! In Brazil to create a food company you have to face a tremendous heavy regulation. The process used in this company to handle food, if in Brazil, would land the owner to the jail.
Idk where in Brazil you talking about this would qualify as artisanal food which is only really regulated for cleanliness if that depending on how you sell it
@hmmidkjojo I'm a food engineer in Brazil. To handle food on the scale presented in the video, it is necessary to follow these standards: RDC 216/2004 RDC 275/2002 RDC 60/2019 RDC 724/2022. You will need much more than 5 thousand dollars to create a factory like his and an operational capacity about 2x larger if you want to sell legally.
To be honest, I’m not sure how he gets away with it here in the US. I do t personally have an issue with it, but I saw several presumed violations occurring.
Well done Kevin. You reminded me of my college years at the UW in the 80s. Unfortunately, I left Seattle in 1989 and have not been back since then. I will stop by to test your sauces if I will have a chance to visit there soon. Else, come to Oman to set up production facility, which I will be happy to be your partner.
In my opinion, it's astonishing how people choose the questions to ask. I mean, is this a channel about starting businesses or a channel about cuisine? The first three questions were totally off track: "Weirdest customer?", "Bizarre recipe?", "What does the sauce pair with?" And the best was the last: "What do you do in your spare time?" I strongly suggest to the interviewer that if the subscribers don’t come up with interesting questions related to the topic of the channel, they should ask some of their own because it's really sad to miss the opportunity. No hate, but guys, it's a pity. There are plenty of questions more interesting for someone who wants to start a business than those. I read a comment down here like " how it is possible with 10k a month and 3/4 employees and rent to make money"? ..that is a good example of an interesting question in my humble opinion.
Part of doing business is small talk before you talk brass tacks. Yes, it is brass tacks not 'brass tax'. Also, this is an entertainment channel. People want to hear the wierd/bizarre. Sounds like you're looking for cheat codes to life.
As a food manufacturer i'm really excited for this new company. However 10K a month is a pretty scarily low amount of revenue with all that equipment and the size of that location. Did I miss the part were they spoke about the equipment and rent costs? The monthly overhead of 2K minimum must not include rent. As for the equipment I would want to know how he was able to afford it. It looks like about 100K+ of equipment costs. Please dont see this as a dig. Im just wondering. Love the show.
If he turned around and said 2 days to peel garlic but it's worth it coz our customer knows fresh is better than peeled frozen...would have been much better marketing
Would also be lying, which eventually shows up as a negative in your bottom line. Playing the long game and being honest is why these guys are going to make it.
If I ask them to teach me how to make this are they be ready to help me? I love to make this and sale it in Afghanistan I am at Washington I got business in Afghanistan love to get good things from here and make it in Afghanistan and sale it there.
Never making sauce with pepper whole. They can have rotten inside without showing on the outside. Always cut your pepper in half. Rookie mistake right there!
Real question is whats the UpFlip take on doing a business interview like this.. need a UpFlip on UpFlip ha. He has to sell massive amounts of more hot sauce from this, plus the penetration of continued growth from this video.
Get FREE access to Business Startup Blueprint here: bit.ly/4d4g9Oe
Oh my Gosh! You’re the brain behind this yummy hot sauce? I tasted it at a car repair shop in Virginia around the Covid time and I loved it.
Numbers don't make any sense. MSRP $13.50-$14.00, 50% taken by retailers, COGS $2.50-$4.00 (17%-30%), 1$ per (5%-7%) for production space (not sure if that is included in the COGS), so roughly 87%-72% total cost to produce. Then claims to have a 30%-40% profit margin? Plus, there are a lot more costs to operate a business outside of the pure production costs and seller royalties.
Those numbers were on larger retailers. So overall margins could be a lot higher. However profits seem to be slim. 30-40% on max 120.000 turnover caps the profit at 40.000-50.000. Nice but not impressive yet.
Yeah he didn't clarify where that margin was from. B2C or B2B. that $11k order was for 3k bottles, $3.66/ea.... Sold @ $14/ea, healthy margin for retailer but he's making like $1 a bottle there?
Math ain't mathing
@@Bundalaba Yeah definitely not. I sell my artisinal handmade sauce for $20 a pop and my bulk sauce bottles for $10. With those total cost numbers he mentioned i would just give up lol.
$4 of cost out of $7 left after retail leaves 40% profit margin.
00:01 Growing a hot sauce business while working full-time
01:58 Creating a hot sauce brand inspired by murder hornets
05:42 Growth from year one to present
07:38 Hot sauce production process and business operations
11:31 Started hot sauce business on weekends
13:29 Margins in retail and other sources differ.
17:10 Strong branding attracts customers
18:37 Starting a hot sauce business at farmers markets
21:47 Persistence is key in entrepreneurship
Crafted by Merlin AI.
Okay, I am a hot sauce snob, and I am going to order a set and give it a taste. I live in Washington as well. Will report back!
Remember to report back
The report?
@@Kamilmiarkayou said you're going to order some of the hot sauce. Did you get it yet? If so, how does is taste?
With 4 flavors, I was surprised he didn't know the ingredients of his product. Nice insight on the extra cost of the cap wrap.
He definitely knew the ingredients lol
Lol, what? He created the recipes…he knows what’s in ‘em.
@jacobypope8059 he clearly didn't. He read it off the bottle.
@@benjaminwhite4479he clearly didn't know. He read it off the bottle
Continue in ignorance if you insist
Just had atomic wings from Wingstop. They skimped me on the sauce today, no heat at all. Wish I had some of this
Would've been a perfect match! 🔥
I love your straight questions and the guy answered is very generous both of you deserve 👍👍
The Liquid Death branding concept of hot sauce.
Sneaky can of liquid death spotted at 22:00 in the video ;) (right, down corner)
I wouldnt say so.. water has no better ingredients or passion of creation.
For all the haters down there... he is using a co-packing company and he still in the early stages of start up. This shit doesn't happen over night it takes time to build a quality brand that consumers trust and will show support for. The condiment industry is a 30.64 billion dollar a year industry, so there is plenty of room for growth, and worrying about the actual breakdowns of gains and losses. When you get to a point of the returns affording you to build a production plant to supply your own product is when the numbers really count, until then you have to pay dues by doing everything possible yourself, pounding pavement, cold calling, farmers markets, food events, etc.
this is exactly the blueprint that I need for my salsa company. I only managed to get as far as making the logo and nutrition label. I am stuck at the point of going to my local farmers market and setting up a stall.
Dale gas..... No pasa nada, si tu no haces nada Bendiciones dale prisa
Glad it helped! You're already off to a great start; keep going! 🌶️
I think you need product before you head to the farmers market to sell.
@@theboringchannel2027 uhh...I said my salsa company. I have the llc, nutrition label, logo and a formula made already. Just that the marketing part and work has me delayed a lot.
@@manuelllanas1840 So you have most things, but not any product made, and are stuck on "marketing" to sell at a farmers market.
I hope you realize that the business in this vid, with 10k a month is sales, is LOSING MONEY after rent, insurance, expenses and labor.
My favourite detail in this. The custom shrink wrap.
Absolutely love this channel. This was a great insight into hot sauces and Kevin is a champ. Fan from Durban, South Africa
The branding of the sauce is just next level 😎😎
These guys are smart to sell merchandise. Their next step can be to start up burger shops/steakhouses and use their in house hot sauce in their outlets. This way, they could retail their hot sauce as well as merchandise in all their outlets
i usually fast forward the ads, but id say it's so fun to watch this time around 😅
Glad you enjoyed it as much as we did! 😊
There it is again. It takes a community of warmth to make good things grow❤️
Thats why America is so powerfull! In Brazil to create a food company you have to face a tremendous heavy regulation. The process used in this company to handle food, if in Brazil, would land the owner to the jail.
It's fascinating how regulations can vary so much between countries! Thanks for sharing. 🙏
Idk where in Brazil you talking about this would qualify as artisanal food which is only really regulated for cleanliness if that depending on how you sell it
@hmmidkjojo I'm a food engineer in Brazil. To handle food on the scale presented in the video, it is necessary to follow these standards: RDC 216/2004 RDC 275/2002 RDC 60/2019 RDC 724/2022. You will need much more than 5 thousand dollars to create a factory like his and an operational capacity about 2x larger if you want to sell legally.
@@quicktips3858 That is not his factory. It's the company he outsources the manufacture and bottling to.
To be honest, I’m not sure how he gets away with it here in the US. I do t personally have an issue with it, but I saw several presumed violations occurring.
how much do the strength of the product vary ?
❤epic work, will buy a bottle much ❤ best wishes
Certainly won't regret it! 😉
What is the brand of Co-packer used in this video? Tks
This was a great watch!
Stay tuned for more great content - we appreciate your support! ☺️
Thanks for being transparent.
I couldn't come up with a better name for a hot sauce brand if I wanted, this was right on spot!
Sometimes the best names just come naturally. 🙌
great documentary, sir!
good job!
Glad you enjoyed it! 🙌
10k a month in sales, 3-4 employees, rent, expenses = LOSING MONEY
Good experience though. Sure he's making more now. Sometimes the market has to warm up to a product first
Losing time... but if he enjoys it... why not
It says it's a copacker = no employees, no equipment & no rent.
@@charlespenticton7561 it said they used a copacker for their first run. the entire video is in THEIR OWN MANUFACTURUNG FACILITY.
Seriously
Well done Kevin. You reminded me of my college years at the UW in the 80s. Unfortunately, I left Seattle in 1989 and have not been back since then. I will stop by to test your sauces if I will have a chance to visit there soon. Else, come to Oman to set up production facility, which I will be happy to be your partner.
best ad read I've seen!
WOW that branding is just on another LEVEL
how much for the machines bro ?
and now I need your hot sauces for my growing collection.
Their sauces are definitely collector's items. 🔥
Amazing, I've been wanting to do exactly this for ages. Thank you for this post.
Awesome story man. I wish my hot sauce company was this epic. But I'm a lazy dingo haha
Outstanding video. Kevin, thanks for showing us how the sauce is made behind the scenes :)
.10 of cost is worth it for the taste
Totally! A little extra cost is worth it for that amazing taste.
What a great company…. Definitely will order some.
Thanks for sharing this excellent documentary. at 8:42, the reporter accidentally drank the hot sauce and hope no serious injury!
No one got hurt, we promise! 😉
It's evident that selling hot sauce can be more profitable than you think. It's all about finding your niche and spicing up the market.
started watching, super inspiring, I wonder why he sharing all of that? not afraid of competition?
🤔 The wheels are turning 🤣😂
Being interviewed isn't easy.
@@sutats Great job
How did he market his brand?
Thanks, I wanted to see some more food entrepreneurs.
In my opinion, it's astonishing how people choose the questions to ask. I mean, is this a channel about starting businesses or a channel about cuisine? The first three questions were totally off track: "Weirdest customer?", "Bizarre recipe?", "What does the sauce pair with?" And the best was the last: "What do you do in your spare time?" I strongly suggest to the interviewer that if the subscribers don’t come up with interesting questions related to the topic of the channel, they should ask some of their own because it's really sad to miss the opportunity.
No hate, but guys, it's a pity. There are plenty of questions more interesting for someone who wants to start a business than those.
I read a comment down here like " how it is possible with 10k a month and 3/4 employees and rent to make money"? ..that is a good example of an interesting question in my humble opinion.
Thanks for the feedback! We'll definitely keep this suggestion in mind. Stay tuned for more awesome content!
10k and 4 employees - the answer is .... losing money.
Part of doing business is small talk before you talk brass tacks. Yes, it is brass tacks not 'brass tax'. Also, this is an entertainment channel. People want to hear the wierd/bizarre. Sounds like you're looking for cheat codes to life.
Great video! We did they get the market stair step display?
Thanks for watching! ☺️
Small businesses are the best
Good for you buddy. God bless
thanks
We hope you enjoyed the video - thank you for watching! ☺️
Do we need any preservative for commercial on hot sauce ?
rule of thumb is are you going to ship it to the other coast, or next town over, how long you want the sauce to last before it goes bad.
Nice work ❤
Appreciate the support! ☺️
As a food manufacturer i'm really excited for this new company. However 10K a month is a pretty scarily low amount of revenue with all that equipment and the size of that location. Did I miss the part were they spoke about the equipment and rent costs? The monthly overhead of 2K minimum must not include rent. As for the equipment I would want to know how he was able to afford it. It looks like about 100K+ of equipment costs. Please dont see this as a dig. Im just wondering. Love the show.
That’s a copacker. Not his space
Business is on fire. 🔥
If he turned around and said 2 days to peel garlic but it's worth it coz our customer knows fresh is better than peeled frozen...would have been much better marketing
Awesome insight! 🙏
Making politicians out of cooks.
Make the world shite again.
Would also be lying, which eventually shows up as a negative in your bottom line. Playing the long game and being honest is why these guys are going to make it.
I do sauces too and fresh vs already peeled is negligible
You can buy fresh peeled garlic in bags
great video, thanks for sharing.
Great video, they need to restock the Little Stingers!
Where does he make his label
Every TH-camr schould present sponsors after taking hot sauce. It's much more fun so!
This is your cousin enrique whites your shit slapps hard brotha 🔥🔥🔥😝
Respect!!
This is awesome! 🔥
beautiful city
It really is!
Love this video
Love these videos
May have rethink the hot sauce . More expense than I initially thought . May keep it local for while
Regional is the base. But can be found worldwide if u look around! ;)
It's making me hungry.
Definitely brings on the cravings! 🌶️
Mango habanero, basbaas east African hot sauce.
Mango habanero: the perfect sauce for when you want to feel alive and slightly terrified at the same time! 😂
why using label, laser based label on the bottle is much more cost effective and environmentally friendly
They also offer durability and energy efficiency while avoiding the use of harmful inks and solvents.
Most hot sauce companies lactose ferment their sauces.
Thanks for pointing that out! It’s a fascinating process that adds unique character to the final product.
The guy has a hot sauce brand and just keeps the seeds “because he likes the texture “ lol
Persistence.
We hope you enjoyed the video - thank you for watching! ☺️
I'd just be happy with reaching the 50k for cottage food law. Almost double my yearly income lol
It’s exciting to think about doubling your income with that kind of success. Keep pushing forward! 💪
Why not soak garlic in water for easy removal of the skin...it's like the simplest trick
Your friend will sue you for the name idea 😂😂
What if our job doesn’t give us anything more than a survival wage? I can’t afford that equipment. 🙃
AWESOME! I have a good food business idea,is any body you knew to connect me in FAIR & MANNER Investor?
The question is not if you can have a business and a full time job but Why would you have a full time job if your business goes well.
That's a great point!
I like hot sauce fantastic
Then this product is perfect for you! 🔥
I think his 10k a month rev was “profit” not rev…
😂that taste test
Right? 😂
If I ask them to teach me how to make this are they be ready to help me? I love to make this and sale it in Afghanistan I am at Washington I got business in Afghanistan love to get good things from here and make it in Afghanistan and sale it there.
We do $20k plus a month with two employees 👍🌶
10k revenue
Bottle >10$
He’s selling less than 1000 bittles a month.
Which is not a small number but definetly not enough to survive
8:27 XD
Never making sauce with pepper whole. They can have rotten inside without showing on the outside. Always cut your pepper in half. Rookie mistake right there!
Ooooo
made in washington is A copy of made in Alaska and made in Oregon..
It's interesting to see how different states adopt similar initiatives to support local businesses. 🫡
Real question is whats the UpFlip take on doing a business interview like this.. need a UpFlip on UpFlip ha. He has to sell massive amounts of more hot sauce from this, plus the penetration of continued growth from this video.
your producion chain has alot of flaws that can be solved to gain more profit sir
At 10k in rev/month, they're hemorrhaging money. So.....cool?
How do you know that?
wow, he added bourbon to a honey-habanero hot sauce? what an innovator, I bet no one else ever thought of that before him
Commercial kitchens aren't cheap > $ 500 month
It can be quite an investment.
I like to know who this copacker thats charging $1 per bottle?
Kevin if you shave bald you'll literally look like Sean from Hot wings.
Как вашу продукцию можно купить в Украине?
What does food hot sauce pair with 🤡
💵💵💵💵💵💵💰💰💰💰💰💰
something is wrong with you when you talk to friends and family through the screen door ...
It was during the pandemic...
FIRST
Glad to see you here, bud!
Everybody is selling hot sauce... I will never buy this.
10k/month…I don’t think he cares😂
Sales or profits ? I have a small business making 15 k in sales and around 8 in profit
Gfy
Your loss, and more for the rest of us
@@angelcuc9529 what is your business about?
His idea is not original. Ive had the idea for a habanero honey sauce for about 15 years but i don't have the time or resources to do anything 😅
I’ll forward this comment to Nike, Adidas, Reebok and New Balance 🎉 while I’m at it… bottled water companies.
stealing mexican recipies?
It’s not Trademarked
Who did he steal it from?
😂
😊
@@layparissscan’t trademark a recipe
Habaneros suck
This guy sucks. No energy.