The Disadvantages of Faire

disadvantages of faire

Over the last several weeks, I’ve been exploring the potential pros and cons of Faire (formerly Indigo Fair) here on the Lucky Break blog. Today I’m sharing some of the disadvantages as part of an ongoing blog series about emerging wholesale marketplaces. While there’s certainly a lot to love about working with this wholesale platform for artisans, there are notable disadvantages of Faire, too. I shared a few of those disadvantages in a previous blog, and I’m back with a additional thoughts to help you determine if Faire is the right opportunity for your brand.

 

The Disadvantages of Faire

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I’m pleased to share that Max Rhodes, Faire’s CEO, graciously provided answers to a tidy list of queries I sent his way. In the final two blogs of this series, I’ll share his responses, my final thoughts, and the results of the Lucky Break community survey.

 

FAIRE FAVORS BUYERS ABOVE BRANDS

There’s a general feeling among many makers and product designers that retailers are getting the better deal when it comes to Faire. They enjoy generous ordering incentives, including free shipping, free returns on first orders from any brand, and $200 cash to spend when signing up through a brand’s Faire link.

 

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However, artisans often believe that they’re getting the shorter end of the stick. We’re enjoying an increase in exposure, but we’re also paying a princely sum (up to 28% of the order) for the privilege of being seen. Thankfully, we’re not saddled with the burden of product returns, though passing the baton to Faire on that front creates separate issues that are worth exploring.

 

SLUGGISH CUSTOMER SERVICE

I frequently hear criticism about slow responses from the Faire team, especially as it pertains to reviewing applications for new makers. Despite those rumbles of frustration, artisan satisfaction with Faire’s customer support team appears to increase exponentially once we gain acceptance onto the platform.

 

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How to Sell on Faire

How to sell on faire

If you want to know how to sell on Faire, then you’ve come to the right place! This blog is part of an ongoing, deeply researched series about selling on Faire (formerly Indigo Fair). The first post, What is Faire?, detailed how Faire works, how much Faire charges, and what kinds of products Faire sells.

 

HOW TO SELL ON FAIRE

 

 

How to sell on Faire

 

In this installment of the series, I’m unpacking some of the nuances of the platform. Because Indigo Fair/ Faire is a rapidly evolving marketplace, it’s important to recognize that this data is accurate as of the time of publication. The Faire executive team is pioneering in spirit and ambitious in scope, so their efforts are an ever-changing experiment. It’s akin to building the runway as you fly the plane, but that’s to be expected when you’re- quite literally- trying to “reinvent wholesale.”

 

Getting started with Faire is deliciously straightforward. Whenever I speak to artisans within the Lucky Break community, the onboarding process is something that earns rave reviews. Co-founder Max Rhodes has often boasted about how easy it is to use Faire.

 

“Makers can apply to join Indigo Fair, and once accepted, they just send us their product catalogue to get their profile up and running. Most makers receive an order within a week, and they get paid as soon as they ship the goods.”

 

HOW ARE ORDERS RECEIVED THROUGH FAIRE?

 

Buyers shop through the Faire interface from a seamlessly curated selection of products that are chosen for them based on an algorithm that considers numerous factors. While only the Faire executives and the software development team fully understand the mechanics of the algorithm, we do have some clues about how the system works. The aesthetics of the shop and the frequency with which any particular brand is ordered factor into which products are displayed for any specific buyer.

 

Faire dispatches an email notification to the brand once a buyer places an order. Brand owners then log into the system to discover several options at their fingertips, including:

  • Accepting the order and selecting a ship date.
  • Editing the item availability to backorder an item.
  • Canceling the order.

 

Payment for orders is settled upon shipment. Because buyers often enjoy trade credit (commonly known as “net terms”) via Faire, brand owners can pay an additional 3% fee for immediate payment. If they choose to agree to net 30 terms to settle the invoice, then they can forego the additional 3% fee. In all instances, Faire guarantees payment even if the buyer defaults on their obligation.

 

HOW DOES SHIPPING WORK ON FAIRE?

Shopkeepers often enjoy free shipping on Faire, and I can confirm that there’s almost nothing that they cherish more than zero shipping fees. But who pays for that?

  • When you notify Faire that an order has shipped, you attach the tracking number for the parcel and notate the shipping cost. This has been the process since Faire’s launch.
  • Faire reimburses for the shipping fees alongside the settlement for the merchandise, according to the schedule you’ve selected. (Immediate payment for an additional 3% or settling the invoice in 30 days for no additional fee)
  • Faire passes the shipping charges on to the buyer unless the shopkeeper is taking advantage of a free shipping special. In that case, Faire absorbs the cost of shipping.
  • In February 2019, Faire rolled out an optional, automated process for printing shipping labels within the program.  This eliminates the need to manually input shipping costs and tracking numbers.  Swing by the Faire FAQ to read more about Faire’s new shipping program.

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Four things you probably didn’t know about big wholesale accounts

Things to Know about Corporate Accounts

Please listen closely, dear makers and product designers: I’m throwing myself at your feet, imploring you not to get stars in your eyes when it comes to corporate retail deals.

 

Corporate accounts are the big, flashy accounts that many makers dream about. These details usually involve multiple locations (sometimes hundreds of doors, sometimes just a few dozen) that are all managed by a singular corporate entity. You know the ones: Nordstrom, Macy’s, Target, Sephora, Paper Source, Dean & Deluca, Anthropologie, Urban Outfitters… there are dozens and dozens of coveted corporate accounts that many makers are itching to crawl into bed alongside.

 

Over the course of my fourteen years as a full-time maker, I’ve done business with many corporate retailers. I’ve also helped dozens of makers navigate these relationships, giving me a unique peek inside the collaborations that so many of us covet. And while I’m huge proponent of dreaming big and scaling up a business, I know all-too-well that corporate retail deals aren’t right for every brand. Before you tee one up, I hope you’ll make certain that it’s a good fit for your business.

 

Things to Know about Corporate Accounts

 

THE BALANCE OF POWER SHIFTS SIGNIFICANTLY WHEN YOU’RE WORKING WITH CORPORATE ACCOUNTS.

These accounts expect you to have a game plan together and they offer far less flexibility than your friendly neighborhood boutique. Why? Because there are a lot of legs on this octopus.

 

The owner is not the buyer. The buyer is not the person who unpacks and inventories the order. And that’s not the person who puts merchandise out on the sales floor nor the person who rings the sale and wraps the parcel for you to carry home. Corporate accounts are highly systematized and the buyer is, in essence, a conductor who’s managing a dizzying number of logistics. They’ll expect you to climb aboard the train and keep your promises in order to ensure that the orchestra plays on.

 

Because these relationships involve more people, there will necessarily be more complexity and more coordination. Corporate accounts often mandate that orders are packaged a certain way, tagged in a particular fashion, shipped on a precise date, etc. They don’t want it a week early and they certainly don’t want it a week late. Working with corporate accounts may find you buried beneath a tidy stack of paperwork and wading through vendor manuals that explain the intricacies of order fulfillment.

 

You’re the sister-in-charge when working with independent stores. You call the shots, informing them how things will be packaged and delivered, and detailing how you expect to be paid.
However, the balance of power radically shifts when you crawl into bed with corporate accounts. They’ll tell you how they do business. You have to decide whether or not you can work within those perimeters and if you can’t, then you’ll need to pass on the account.

 

 

CORPORATE ACCOUNTS BOAST MUCH LONGER TRANSACTION TIMES.

There’s a common misconception that corporate deals are the fastest way to scale an artisan brand. Um, no. Let’s put that myth to bed once and for all…

 

These deals can take many months to bring to fruition. Generally speaking: the larger the fish, the longer the amount of line you’ll need to reel them in. Corporate deals aren’t an ideal solution if you desire is to grow your company quickly. Without a doubt: if a corporate account places an order, then certainly- that will help you ramp up business and scale. But if you need orders tomorrow, corporate accounts shouldn’t be the primary focus of your attention.

 

These deals take a substantial amount of time to nurture and working with these accounts requires a potent combination of strategy and patience.

 

 

THE FINANCIALS OF CORPORATE DEALS CAN BE OVERHWELMING TO SMALL BRANDS.

There’s no doubt that corporate accounts have enormous buying power, which is both good and bad news. Good news? They’re capable of placing orders with commas and zeroes. Bad news? That enormous buying power puts them in the driver’s seat for price negotiations, and they often use it to extract preferential pricing, which clocks in below normal wholesale.

 

And they frequently work on trade credit, too, meaning that they buy now and pay later… leaving you to float the financials between order placement and pay day. It’s good to be king!

 

How would you like be on the receiving end of a $25,000 order? Hells to that yeah, right? What brand couldn’t use a $25,000 cash infusion? But if that $25,000…

 

• Bills on net 90 terms (meaning that you’re paid 90 days after the order is delivered) and
• Your COGS (what it costs you to actually make the product) comprise 50% of your wholesale price…

 

Then you’ll need to round up $12,500 to front that order, with the understanding that you’ll receive a check in 3 months. That’s a bit painful.

 

If you’re a business who’s just beginning to cut your teeth on wholesale, that type of order could translate into major cash flow problems. It might entice you to venture out on a limb that perhaps isn’t yet sturdy enough to support you.

 

On related note: the volumes associated with corporate accounts will likely prove overwhelming for new entrepreneurs and solo makers. You should consider working with corporate accounts once you’ve refined your production process and supply chain, when you have some experience packing out larger orders, and the capacity to finance the order without losing 3 months of sleep.

 

 

CORPORATE DEALS OFTEN HAVE “BUY BACK” CLAUSES.

Buy backs are a contractual obligation that requires a vendor to “buy back” their own merchandise if it hasn’t sold within a specified period of time.

 

Let’s suppose that you’re an apparel designer. Nordstrom places a juicy order with you for Spring of 2017. At the end of the season, your contract may well stipulate that you’re required to buy back every piece of clothing that remains unsold. You’ll buy it at an agreed upon price if it hasn’t sold within the contracted time period and you’ll return it to your inventory.

 

Not all product categories and not all corporate entities have buyback programs but they’re definitely something to keep an eye tuned to. Don’t get me wrong: cashing that first big check is hella fun… until you have to dip into your back account six months after you’ve spent those funds.

 

Please know that I don’t mean to scare you off of corporate accounts. They can move your ball forward in powerful ways. They can deliver big, handsome piles of cash at your feet. They boost brand cachet and build exposure. Yes, corporate accounts carry a host of benefits, but they’re not for everyone. And many of the makers that I see drawn to them like moths to a flame are particularly vulnerable. Each of us should know what we’re getting ourselves into before we dive in with both feet!

 

 

 

Four questions to ask yourself before pitching to a retailer

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As a business consultant for artisan brands, I spend a significant amount of time building strategy into the wholesale programs of makers and product designers. And a good portion of that time is invested helping makers determine which opportunities are best suited to them… and “Monday morning quarterbacking” deals and collaborations that aren’t serving them well.

 

One of the most common complaints I hear is that makers are having a hard time getting buyers interested in their work. Despite repeated pitching, they’re seeing precious little pick up and they’re quickly growing discouraged.

 

When I’m on the receiving end of these “SOS” calls, I immediately focus my attention on the product collection: Is it well branded? Is it well packaged? Is it unique enough to capture interest? Is it priced correctly? And they very next thing I put under the microscope is the kind of retailers they’re hoping to work with.

 

Too many of us are stabbing blindly in the dark! We pursue accounts that catch our eye without putting those retailers (and ourselves) through the paces to ensure that there’s ample opportunity for success there. But failing to properly align yourself with the “good fit” retailers brings with it some deeply undesired consequences:

 

• You lose mental momentum as you become frustrated with efforts that aren’t bearing fruit.
• You place energy into deals that don’t hold much promise, depriving other areas of your business of the benefit of that energy.
• You may often score opening orders, but you’ll struggle to net lucrative reorders, preventing your brand from building consistent cash flow.

 

Let’s put an end to that, shall we? When deciding whether or not to pursue a wholesale account, I hope you’ll ask yourself these four critical questions.

 

 

4 Things to Ask before Pitching to Retailers

 

1. HOW DO I FIT WITHIN THE CURRENT PRODUCT MIX?

You’ll need to have a firm grip on the current product mix of the retailer. Look for a combination of complementary brands (other brands-outside your product category- that your ideal customers would also buy) and competitive brands (brands within your product category that they might buy instead of yours). Are they already offering merchandise in your product category? Can you see your products be sol alongside their current offerings? Would you want to share shelf space with those brands?

 

2. WHERE DO THEIR PRICE POINTS FALL?

Too often, we don’t have a finger on the price pulse of retailers. Stores generally operate within a set financial range with their product mix. Think for a moment about the price range of jewelry at Target. Compare those numbers with the price range of jewelry at Anthropologie. One of these things is not like the other, eh?

Having a firm grasp on your own prices is essential. Having a firm grasp on the price points of potential retailers is just as important. Align yourself with accounts that are playing at price points which are already in harmony with yours.

 

3. ARE WE SERVING THE SAME TARGET AUDIENCE?

How well do you know your MVPs, your most ideal customers? The ones that eagerly gobble up whatever it is you create? The ones who happily share your work with others? The ones who might buy on a good sale, but never quibble about price? Do you know what attracts that group of people? What motivates them to purchase your product above all others? What makes them tick?

I hope you do… if not, then it’s time to drill deeper into your own brand development. Once you know “your people,” you should seek to build relationships with retail buyers who serve the same type of audience. When you introduce them to well-curated, beautifully presented work that’s designed for their audience, they’ll immediately recognize it. I’d estimate that fully 90% of the “Monday morning quarterback” calls I make are rooted in audience misalignment.

 

4. CAN I ELEGANTLY SERVE THIS ACCOUNT?

Even if the answers to questions 1, 2, and 3 are a resounding “yes!” you must ensure that your company is poised to serve this partnership.

• Can you deliver products in the volume needed?
• Can you float the financials if they’re requesting on trade credit?
• Can you survive a substantial “buy back” if the contract affords the account that opportunity?
• How will crawling into bed with this account impact your relationships with other buyers and accounts?
• Does partnering with this account improve or erode the public perception of this brand?

 

You’ll enjoy more mental momentum, more market traction, and improved efficiency when you focus retail outreach efforts on accounts with which your brand can ultimately align successfully. Find them and then pursue them with a passion!

 

 

 

The five hidden benefits of wholesale

Hidden Benefits of Wholesale

Hidden Benefits of Wholesale

 

Focusing on wholesale has been an enormous boon to my business over the past 14 years. It was one of my smartest decisions and it’s delivered a host of benefits, many of which you might not immediately think of, including…

 

  1. IT’S LOWERED MY COST OF CREATION.

Working in wholesale has allowed me to reach scale, meaning that I buy my materials in larger quantities at lower prices. And that scale has also both necessitated that I refine my creation process, and given me the cash flow I need to buy the kind of machines I needed to make the same products in less time. All of this means that I can generate handsome profits, even at wholesale prices. And it increases my profit margins when I retail through my website…

 

  1. IT’S STEADIED MY CASH FLOW.

Because I mix both wholesale and retail channels, I enjoy fairly consistent cash flow year-round. Sure… I still feel the summer drought, but wholesalers are ordering on a different schedule than my retail shoppers, which means that I didn’t feel the crunch of non-buying seasons nearly as deeply.

 

  1. IT’S GIVEN ME THE KIND OF CASH I NEED TO MAKE BIG INVESTMENTS IN THE BUSINESS.

And stores by hundreds-to-thousands of dollars’ worth of merchandise at a time. The cash infusions from large orders have enabled me to take things up to the next level: professional graphic design, product photography, professional web development, and bookkeeping. Those investments have made all the difference in how my brand is perceived and they’ve empowered me to charge a premium for my products.

 

  1. IT’S GIVEN ME GREATER CONTROL OVER MY SCHEDULE + CREATION PROCESS.

Farmer’s markets and craft shows necessitate the creation of a large volume of inventory which may or may not sell. With wholesale, I only create products that I have orders for, eliminating the need to carry lots of inventory. Many makers believe that they need vast amounts of space to wholesale, but that’s not necessarily true. Storing unsold products, booth displays and signage consumes space and you can free that space when you move into wholesale.

 

  1. I’VE NEVER LOADED MY CAR AT 5AM TO STAND IN THE HOT SUN AND THEN PACKED UP ALL MY THINGS AT THE END OF THE DAY.

I have never once loaded a minivan, SUV, or station wagon at 5am to make it to market. I have never once packed up what didn’t sell. I’ve never stood in the midday sun, sweating my ass off, and trying awkwardly to make conversation with passerby at a market. I’m convinced that this is my personal version of hell.