NYLP: Welcome to the New York Launch Pod, a podcast highlighting new start-ups, businesses and openings in the New York City Area, I’m Hal Coopersmith and my guest in this episode is Eric Kane, the Founder of Barrel On. Barrel On is a site where everything you buy, a portion is donated to charity. They tell you how much and what charity it is going to. I think it’s a really neat idea, particularly around the holidays you are doing a lot of shopping. You can check them out at barrelon.com. Now let’s go to the interview.
Stepping on to the Launch Pod, we have Eric Kane. He’s the founder of Barrel On. Welcome to the New York Launch Pod, Eric.
Eric: Thank you, Hal. It’s good to be here.
NYLP: So what is Barrel On?
Eric: Barrel On is a way to sustainably fund charity projects in its simplest form. So we created a marketplace that is solely for brands that produce sustainable, environmentally-friendly goods. But we also inspire the brands on our platform to donate a percentage of every sale to go fund charity projects.
NYLP: So you wanted a platform for sustainable, environmentally-friendly goods. How did you come up with the idea?
Eric: It’s been years in the making, to be honest with you. We started as a barrel refurbisher. Me and a few buddies would take old whiskey barrels, bring them to our friend’s garage, clean them up, and transform them into tables. And we use LED lights inside of the table. We actually cut the tops off the barrel, installed LED lights, and sort of created this eye-catching, illuminating table that we thought could inspire people to look at sustainability and issues surrounding sustainability in a different way. And we were also selling the barrels and giving a portion back to a foundation that was near and dear to me, The Young and Brave Foundation.
So at first, that was it. It was a handful of guys building barrels in the garage. And I ended up having a conversation with someone who’s a dear friend, mentor. And he said to me…he said, “If your mission here is to raise money for charity projects and to do it in a sustainable manner, you need to think bigger, and you need to think bolder. Just you selling barrels is…how many barrels can you sell, right?” And I really took it to heart. And I sat down. I thought about it. Was doing some research on social entrepreneurism and looking at the Toms model Blake Mycoskie did. And it came to my attention that there are so many brands just like me. There are so many people selling sustainable, environmentally-friendly goods and giving back to fund either charity projects or just giving back to fund interesting initiatives. So I decided, why don’t I try to create an Etsy but only for those brands and to have those brands give back, but do it in a very tangible and transparent way. And that’s kind of how Barrel On started.
NYLP: And how are you finding all these brands?
Eric: It’s actually really easy. Social media, nowadays, has become just an incredible tool for anyone, entrepreneurs especially. And it’s super easy to search for #sustainability. And the next thing you know, you see four or five brands that are selling something sustainable. And then once you start finding those brands, you really find the places to look. There’s other sites that are solely environmentally friendly, so we reach out to them. We also reach out to brands on Etsy and other sites. A lot of these brands are happy to sell on multiple platforms, especially a lot of them say that Barrel On’s very different and that it’s solely sustainable, and it also gives back. So it’s really easy to call vendors. Most of the time, it’s people cold-calling vendors or emailing them or even just commenting on their Instagrams.
NYLP: And then once you find them, talk about how it comes to be where they’re on the site.
Eric: Usually, what we’ll do is we’ll set up a phone call with the vendor, and I’ll speak to them personally, and learn a little bit more about their business. You can learn a lot from their websites. But there’s nothing better than just speaking with the individuals themselves and getting to know them and getting to know their businesses and why they do what they do. That’s really important is why they’re doing it. It’s something that we’re really interested in. And it’s kind of what like drives us is our why. We’ll set up a phone call with them. And actually, we use this incredible service. It’s called amy.ai. It’s a robot that schedules meetings for you. You just cc Amy in your email. So we use that to schedule meetings with the vendors and we’ll have a phone call. And if the vendor agrees to sign up, we have terms and conditions that they agree to. And they either set up their shops on their own. Or a lot of times, we’ll offer just to help them out, do it for them.
NYLP: And what’s the motivation for a lot of these brands for doing what they’re doing? What’s the why?
Eric: Yeah, you know, I think, honestly, it’s just a lot of people have it pretty well nowadays. Like life isn’t that bad, and they really realize that, and especially people who run businesses where they’re really pursuing their passion on a day-to-day basis and they want to help other people live slightly better lives. So a lot of our brands, they have this strong sense of the environment and the world in general. And they want to give back. And they just want to do stuff that help others. And this feeling within them that they get from giving back, that’s greater than the slightly excess profits they would get if they didn’t give back. So really, I think, they just genuinely care about other people and want to give back.
NYLP: So that’s one of the things that I find pretty interesting. It seems like a trend we’ve had on companies that donate a portion of profits to charity. But is this really a new marketplace? What’s kind of driving customers to say, “I want to shop for brands that are giving back. I want to go to these sites. I want this.” What do you think is really driving people to these sorts of companies or these sorts of brands?
Eric: I think what’s driving them to our platform is the fact that we’re incredibly transparent about how we give back. There’s no “You’re just giving money to a charity, and that’s it.” Everything we do is very tangible in the form of projects. So every time you make a transaction or make a purchase on our site, you’re raising money for a specific project. And then we will go out, and we film that project when we completed so that everyone sees.
Also, another thing that leads into more transparency is we don’t say, “We’re giving a portion.” You can see the exact number that you’re generating with every item you purchase. Our vendors commit a percentage that’s tied to a product. So one of our vendors sells surfboards and skateboards that are made out of old fishing nets that they actually pulled out of the ocean in Chile and they turn them into skateboards. And they’ll give, say, 20% of their sale’s price. And you’ll see that they’re giving $20 off the $100 skateboard. So I think that fact that it’s very tangible and transparent is what’s really driving consumers to our platform.
NYLP: And does shopping on your platform cost more than it would on shopping on another platform?
Eric: Generally, it doesn’t. Usually, our vendors set the prices the exact same as they would on their regular platforms.
NYLP: And so when a portion of proceeds are donated, where is it going?
Eric: Right. So we’re small. We just launched our beta site a little over six months ago. And our first project was Operation Turkey Day, which is a collaboration with The Young and Brave Foundation. They host events and raise money for children who suffer from cancer. And what Operation Turkey Day was…well, they have actually been running this in Los Angeles for a few years but they wanted to bring it to New York. So we partnered with New York Presbyterian Hospital, and we brought Thanksgiving dinner to a group, actually, a few hundred cancer patients, their families, the nurses, the doctors the Tuesday before Thanksgiving so that they can enjoy a nice meal with their families since they weren’t, you know, going to be able to go home.
So we started and we still continue to support The Young and Brave. They’re always going to be a foundation on our platform. We’re currently in the process of rebuilding our entire site from scratch. And our new features will include more charities. But again, it’ll always be projects. And the consumer will have the ability to choose which project they want to donate to.
NYLP: And how do I know that the money is actually going there?
Eric: So there’s few ways. And we could be even more transparent with this going forward. Essentially, we PayPal the money over pretty much immediately upon the transaction. So technically, we could release financials and we’re very…more than happy to to anyone who wants them. The videos, obviously, showing that we’re out there and we’re doing these projects, serve as a point of proof, I guess. And the last piece is that our vendors receive the credit and the tax credit for those donations. So they’re the ones who actually receive the forms from the nonprofits that receive it so they could prove it as well.
NYLP: And what’s your target demographic? What’s your target shopper that you’re really looking to reach?
Eric: Everyone, the whole world, anyone who wants to shop for items that are unique and interesting, sustainable, usually like from small brands that, you know, aren’t mainstream, anyone who’s into that type of thing and wants to give back. So I mean young and old, whoever’s really happy and wants to give back to other people, that’s our target.
NYLP: Obviously, you want to reach as many people as possible. But are you finding that, you know, within a certain audience, you’re looking to target people within a certain demographic or a certain age range?
Eric: Definitely, definitely. I mean we do focus more on millennials, actually. Millennials have been our highest source of traffic. And the
most purchases come from people, really loosely, with an age of like 19, 20, and 35.
NYLP: And are you seeing a lot of repeat customers?
Eric: Yeah. Actually, most of our customers are repeat customers.
NYLP: And how are you getting the customers?
Eric: So we actually have no marketing budget. We don’t spend any money on marketing. We have a social following. And there’s a hundred brands on our site. And every single one of those brands semi-frequently posts something on social media about how they sell on Barrel On. And that is our source of traffic at this point.
NYLP: How do you actually make money?
Eric: So we earn 5% of every sale after the donation’s been calculated out. So if there’s a $100 product that’s sold and, say, the vendor’s donating 5%, the donation will be $5, and we would take 5% of $95, $4 and change. So that’s how we make money. It’s a very modest living.
NYLP: Are you profitable?
Eric: At this point, no. But our costs are exceptionally low. Our expenses are not too bad, mainly service-based. So there’s really not too much that costs to it. And what we find as interesting about our model, right, is that other multivendor marketplaces, say, someone like Jet, massive company, or Amazon, they spend millions in advertising. And Jet spends $25 million per month in advertising. We can never match that. We can never spend that much money. But we don’t think we have to, because we’re able to crowd-donate off of shopping to fund charity projects that we can film and that our whole community can share. And thus that’s our marketing.
So our market strategy, our marketing strategy is to give back and to give back relentlessly. And we think by doing that, people will come to our platform, and they’ll buy products. And the more people that come and buy, the more people are going to want to sell, and, ultimately, the more donations we’re going to raise to fund awesome charity projects. And then if there’s another way that we can make money, eventually, we could look into it. But at this point, as long as we can continue to keep
the lights on and raise money to fund charity projects, we’re happy to keep doing it.
NYLP: How come the donations vary by different vendors?
Eric: Yes. So I guess some vendors aren’t able to give as much as others. A lot of these handmade goods are kind of…you know, they’re custom, small pieces that people value pretty highly. But the actual costs of the materials more likely aren’t that much. So vendors are willing to cut into that margin in order to give back a bit more. But there are some products, you know, like organic sunscreen, you know, how much can you really give back or… So I guess it really just varies on how much the vendor wants to give.
And then the piece that we find interesting that really motivates our vendors to give is we only promote vendors based on the percentage they’re giving. So essentially, vendors can donate to promote, but they can’t pay to promote. So you can’t pay me $15, and I’ll put you on the homepage. But if you say, “I’m going to give a 100% of this necklace,” you’re going to be on the homepage, because our algorithms would pick up the percentage that’s being donated. So a lot of vendors, they’ll do certain products. They’ll give a large percentage just to be up on the homepage, up in their category as, you know, the most generous product on that page. And then, hopefully, you’ll go and you’ll shop from them some more.
NYLP: So one of the things that’s interesting, at least in terms of this space, is a lot of companies have charities they choose. You have one, The Young and Brave Foundation. But there are other companies that say, you know, “This is something that’s really important to our mission, giving back.” Can they join your site if they are already giving a portion of their proceeds away? Or does it need to go to these specific charities that you’re choosing?
Eric: Many vendors on our site give to other organizations outside of Barrel On. But any sale that goes through Barrel On has to support the partner organizations and the projects that are on Barrel On, which there hasn’t been any really challenges with that so far. And we offer to our vendors, they can recommend nonprofits that they work with. And we’ll look into those nonprofits, whether it’s via Charity Navigator or connecting with their executive directors and learning more about what they do. And then we will work them into the platform as we grow. As we grow, we plan on offering the most generous vendors will be able to choose the projects that they want to do and the ones that are most meaningful to them.
NYLP: So what’s the sweet spot in terms of the donation for some of these vendors?
Eric: The average is 30% of the sales gross. So not of profits, 30% of the sales price that you see.
NYLP: What’s your background?
Eric: I’m a Stevens Institute of Technology graduate. I graduated in 2012. And after school, I went on to work in consulting at PricewaterhouseCoopers. And I worked on some really interesting projects and worked with some awesome people. But the exact role that I was in wasn’t exactly my passion. So I got an opportunity to work on Barrel On fulltime, actually, as a donation from an organization that was kind enough to back me with it. So, you know, that’s how I got into this.
NYLP: How did you get your start once you got that donation to kind of launch?
Eric: Yeah, so that was tough. I’m not a developer. I mean I came from IT audit at PwC. So I was not exactly in the position to build a multivendor marketplace. But I was told to do it. And I was given, really, the opportunity of a lifetime. And I couldn’t have been more grateful for it. So I taught myself code first and, basically, just hacked together a site. You know, our beta site is nothing to write home about. It’s like a functional website. It works. So I just hacked it together. I figured out how to do it. I spent some of my own money hiring a freelancer in Chicago to help out. And I just taught myself things. You know, I’ve never designed a site. I’ve never built a site. So I never knew this concept of wire framing, and user experience and user-testing and even marketing. I’ve never made a video before. So I just started teaching myself these new skills just by doing, built a site, started making promotional videos, threw up a social media account, you know, started looking at other accounts and seeing what they’re doing and how do you consistently post. Like what should you be saying on your posts?
But, really, what it comes down to is that I’ve gotten very good friends with this guy Andrew Tarver. He said to me…he said, “Focus on your why. Like why do you want to do what you want to do?” And for me, it sounds Dr. Seuss-like and kind of cheesy. But it rhymes. So I went with this. I want to inspire sustainable living and charitable giving. And he just said, “Keep focusing on that and keep telling people that that’s what you believe in and what you want to do.” So I just kept doing that. And the more vendors I would tell that, the more friends I would tell that, the more people that kind of came around, would offer a hand and help out and sell on the site. So, yeah, I just kind of ran with it. You know, I was given the opportunity of a lifetime, and I decided not to waste my time and just, you know, do what I could.
NYLP: What’s been the hardest part in terms of inspiring sustainable living and charitable giving?
Eric: I think like half the world actually does care about this. And the other half is just like not really sure. So I think we’re at this like turning point where it’s starting to come…where like people do really believe in it. But, honestly, I don’t think it’s a challenge. I think people really want to do that, right? They want to live in a more sustainable way. It shows in everything, like the health trends. And if you go to Costco now, they have organic foods. It’s because it’s real. It’s like the market is demanding sustainable, healthier options. And obviously, this one gets incredible celebrity support, presidential support for these types of initiatives. So I think the people are getting there.
Honestly, I don’t think there’s ever been a platform where it’s really easy to do. There’s a handful of sites that you can buy eco-friendly goods. It’s just like no combination of buying environmentally-friendly goods and giving back in a tangible, transparent manner. But it’s like a challenge of like growing that is… Seven months, it was one…me, one person, you know, emailing hundreds of vendors, building a site, trying to market. Now, I have two more co-founders. And that’s just been like an incredibly awesome situation. Andrew and Taylor are great. And they’re super helpful. And they’re like awesome at what they do. But three guys working without any marketing budget, so it’s not really a challenge. It’s an opportunity to do something that no one has really done before. And like we love what we’re doing. So it’s really just fun.
NYLP: So let’s say, a big audience keeps on coming to your site, grows quickly, what do you see Barrel On becoming?
Eric: I see Barrel On as a success story like Toms, where Toms has been able to do incredible things, except we’re all the companies that are like Toms doing even bigger things. So I see it as an organization that is similar to Toms. Ultimately, it would be like a B Corp where it’s a for-profit entity. And it makes money. It sustains itself and sustains the payment of its employees but then can also just do incredible charity projects. And not just like small-scale things like…you know, what we did with Operation Turkey Day was amazing. But it’s small, right? It’s just a small micro project.
I always look at it this way. Thirty percent of every sale goes to fund a charity project. Etsy did $2.4 billion in gross merchandise value. If we did $2.4 billion, that would be $500, $600 million dollars in donations in a year. And you can do so much with that. So that’s really the way we see it is if we can scale, we’re going to raise a ton of money to do incredible things. And that’s where we can really sit down and think about what is the best approach just doing something that’s amazing, that’s going to make the world a better place.
NYLP: And so what are some of the incredible things on your wish list that you’d want to do?
Eric: Oh man, there are so many things. I would love, you know, like solar panels everywhere. I mean I think we’d like to focus a lot on charities that help with access to water, nonprofits that help with access to Internet. There’s really like this huge opportunity where we think about like…when I think about sustainability, I think about just like human life and what all humans should have, water, food, shelter, education, so, you know, things that can provide that, whether it’s Internet in developing countries…you know? I mean Facebook’s doing a great job with it. Google’s doing a great job with it. And we’re going to get there. Like the whole world has Internet. You just think about all that untapped talent and like brainpower that doesn’t have access to the Internet. What they’re going to be able think of, what they’re going to be able to do. So really just projects that support people in ways like that.
NYLP: Do you think this sustainable shopping and giving back is kind of the future of shopping and commerce? Or do you think it’s part of a larger picture?
Eric: I think it’s the future, because, you know, if all of a sudden, there’s a platform where you can buy and give back, right, everything you buy on the site generates a donation, why would you shop anywhere else? If you’re getting the same goods for the same price and still two-day shipping, why not? Like why would you go buy on Amazon if Amazon doesn’t give back?
NYLP: Well, if it’s the same price. But if it’s a lower price, some people will say, “I kind of want to do the lower price.”
Eric: Absolutely. And so that’s where there’ll be, you know, the niche market. If the prices are a little bit higher on Barrel On, which, at this point, they’re still the same, you know, people will buy wherever they can. But if it’s the same price, you might as well buy where it gives back. And at this point, knock on wood, our vendors are keeping their prices consistent across all platforms.
NYLP: How did you come up with the name?
Eric: So we came up with the name because, well, we’re refurbishing old whiskey barrels. So, naturally, the name “Barrel” sat there. And what we thought was interesting about the barrels and what kind of made it a piece of art is when we would cut the tops off and install LED lights on it. We came up with the thought that the barrel can always be on. It’s energy-efficient. It’s LED lights inside of a barrel. So the barrel can always be on. And then Barrel On just kind of felt like this positive, moving-forward type verb. It’s “verbable” is kind of what we thought about it, kind of like Google. So it just stuck. And we see it as like a very positive term that, you know, hopefully motivates people to continue onward when things are tough.
NYLP: How do people find out more about you and Barrel On?
Eric: So people can visit barrelon.com, and they can, you know, check out the website. I write on Medium from time to time. So you can find me on Medium. I think you can just search Eric Kane or Barrel On, one or the other. You should be able to find it. And, you know, keep your eye out. We’re rebuilding the entire site from scratch. Right now we’re beta. So the new platform is going to be much more robust, much more user-friendly. We’re going to incorporate a lot more projects into it. And we think we’re going to be able to do a lot of interesting things and fund a lot of impactful charity projects. And we would love to have you help us out.
NYLP: It’s great what you’re doing, Eric. It’s a really great site. And love everything about it. Thank you for stepping on to the New York Launch Pod and sharing your time with us.
Eric: Hal, always a pleasure. Thanks for having me.
NYLP: And if you want to learn more about the New York Launch Pod, you can visit nylaunchpod.com or follow us on social media @nylaunchpod.