Faire, a wholesale marketplace that connects independent retailers and manufacturers virtually, recently secured $150 million in series D funding, bringing the total amount of funding to $266 million and upping the company’s valuation into billion-dollar status.
The platform can best be described as a digital trade show. It allows brick-and-mortar retailers — and some online shops, too — the chance to browse and purchase products for their stores at wholesale prices from a number of manufacturers around the globe.
“Before Faire, the way manufacturers had to connect with stores was very inefficient,” Marcelo Cortes, Faire cofounder and chief technology officer, told WWD. “Trade shows are expensive and not the best way to buy products. Retailers had to hire sales agencies. Or, they had to fly to the trade shows. With Faire, we take care of all of those things. We find all of the things and distribute their products all over North America.”
To do this, the San Francisco-based company, which was started in 2017 by Max Rhodes, Daniele Perito, Jeff Kolovson and Cortes, uses data to match products from manufacturers in 39 countries around the world with local boutiques and mom-and-pop shops. Retailers can browse the Faire web site for anything they want. But Faire also curates a selection of items that are likely a good fit for each retailer, based on data, such as the store’s location, price range and current products.
Faire also takes care of things like fulfillment, customer support and returns. Retailers, meanwhile, have 60 days to decide if they want to keep a product or return it. Faire ensures that manufacturers, or “makers,” as Cortes calls them, are automatically paid after each sale.
“They don’t need to worry about going after a small store to try to charge them for this order in the future,” he said. “So there’s a lot of value for makers as well.”
The founding quartet — all of whom had all previously worked together at Square, a mobile payment company — came up with the idea after seeing firsthand how difficult it was for smaller retailers and boutiques to find new items to place in their stores.
“The owners of these stores had a lot of anxiety about bringing on new products,” Cortes explained. “Because they had to pay upfront. They didn’t have any data and it’s not like they had a lot of money. So, every time they brought on a new product and it didn’t work, they had to deal with it. They had to either try to get rid of it or leave it on the shelves for a really long time. We help these stores try out new products and find products that work better.”
He added that it was equally difficult for manufacturers to place their products in these independent boutiques, “even if they had a very good product,” simply because there was no easy way to find the retailers.
“The value proposition that we’re adding to the stores, and also the makers, to both sides, is very appealing,” Cortes said. “The reason for that is because we found this market, this specialty [brick-and-mortar] part of retail, where, even though they have managed to survive and thrive in a changing retail environment, they still have a lot of e-commerce and lots of larger retailers or big box stores competing with them. With Faire, by adding technology and making this market way more efficient, and also using data, we are adding a lot of value.”
And the company is growing fast.
When Faire launched, the platform was focused on gifting. Today, Faire includes women’s apparel, home decor, beauty, both men’s and women’s accessories and even pet products. Some popular women’s apparel brands include Vero Moda, Just Black Denim, Daniel Rainn, Renee C., Mittoshop and more. And with about 20 additional brands added each week, women’s apparel now makes up about 10 percent of total sales. The retailer network has expanded too — currently more than 50,000 retailers are on board — now serving brick-and-mortar stores in Canada.
On the manufacturer side, many of the 7,000 makers around the world using the platform, many already have a footprint in mass-market retailers. But Cortes said some are looking for a way to expand into independent shops and boutiques.
Sales are on the rise too. In early 2018, the site averaged less than $1 million in sales each month. Fast forward to fall 2019, and sales are more than $1 million a day. And in addition to the San Francisco headquarters, Faire also has offices in Ontario, Canada and Salt Lake City with 150 full-time employees.
Cortes said another reason the company is growing so fast is because — even in the era of online shopping — the experience of shopping in real life still resonates with consumers. And those stores need to continually keep updating what’s inside of them.
“There are many surveys that show that consumers actually enjoy the experience of walking into a store or looking and touching the product,” he said. “The people who manage the stores might tell you the story of the product or the makers of the product. It’s a very different experience. It’s not a thing that we think is going away.”
With the latest round of funding, Cortes said the company plans to expand its assortment of products offered, possibly increasing the selection of men’s wear and even offering food. He said he would also like to see more local retailers from countries outside of North America have the ability to shop the platform.
As for real-life trade shows, Cortes said he sees them continuing to change.
“I don’t see them going away,” he said. “Store [owners] definitely like to go to trade shows.”
But, he added, “There will be change on how trade shows work. We’re very interested in working with them and figuring out how we can help this evolution of trade shows.”