This post was part of a 2-part series. So for more on Faire, click over to our other article here.
It’s been fascinating watching the impact of Faire over the last couple of years. At first, especially when Faire overlapped with Etsy Wholesale, most makers were skeptical or ambivalent about Faire. Recently, however, Faire has stepped up their recruiting efforts and many makers are either on Faire, considering it, or are actively against it. In other words -- Faire has become a part of the maker community.
Also: I’ve been hearing some unsettling things about Faire that I do want to share with you.
I have been hesitating to write this post because I didn’t want to seem like a Faire Hater. I don’t see them as our competitor, honestly -- but I know there could be a perception of that and I didn’t want to seem like we were speaking negatively about another company for our own benefit.
That said, my concerns have started piling up, so I want to share them in case doing so will save makers heartache or challenges. As always, I fully trust that each of you knows what is best for your business. So I’ll leave the decision of whether and how to engage with Faire to you. But in addition to the more general exploration of Faire that we did the other day, I want to dig into a handful of specific caveats to keep in mind if Faire is something you’re pursuing.
3 Ways to Avoid Becoming a Faire Maker Horror Story:
1. Don’t let them steal stockists from you.
A maker of ours, who is well-established, has a beautiful product line, fantastic branding, and a thoughtful (and drama-free!) approach to business came to me and said:
“I’m on their platform but was very unhappy with a discovery I made in February of this year. They were suggesting other jewelers with 50% of my order minimum requirement on my profile page -- in between my products and my “about me” section.
It was such a blow to me because I asked them before being on their platform if they were going to advertise other jewelers, because that was my main concern, referring buyers to my profile on their platform and then having them get distracted with another jewelry brand. And that’s exactly what happened. We saw our wholesale sales go down after we started referring people to Faire.”
I believe Faire is being intentionally confusing about recommending similar products from other makers. From their perspective, as long as shops place orders, Faire makes money. And if store owners are able to find a “similar product” for cheaper or for a lower minimum, they might jump over to that other product, either intentionally or inadvertently. That’s fine for Faire, as it means stores order more reliably. But it’s not great for makers, of course -- it means a stockist relationship you may have been cultivating for years could suddenly vanish.
My tips to avoid having stockists stolen from you:
Be cautious of the Faire algorithm.
Faire’s reality as a Venture Capital funded company means they are under a lot of pressure to grow, and grow quickly. So they will continue evolving how they “serve up” products for stores to purchase until it is optimized for total sales via Faire. That may not mean helping people reorder from you. So keep an eye on your Faire page/store, especially watching what store owners see --and make sure that you’re comfortable with how your line is being presented.
Beware the Faire Falloff.
You may see a burst in new stockists when you start on Faire. But watch those stores’ reorders. Unless they are reordering, it’s very possible that Faire’s algorithm is rewarding new makers with orders… but ultimately routing reorders to makers with cheaper products and lower minimums. Many makers are seeing The Faire Falloff -- growth in stockists, followed by an overall drop in wholesale sales and reorders. How to combat this? Look at your reorder rate (percentage of shops that order from you 2 or 3+ times.) Is it getting better with Faire or worse? If it’s getting worse, think long and hard about whether Faire is helping you grow your business over the long term or whether it’s just giving you a quick hit of sales.
2. Don’t count on unsustainable perks.
It’s a law of nature and business that if something seems unsustainable, it won’t continue. Companies with VC funding are legally obligated to use strategies that maximize profits for their investors. And one key strategy of Venture Capital funded companies is to do things that lose money now in order to gain customers. Once you get those customers in the door, you fix what’s called the “unit economics” -- in other words, you take away anything that isn’t making you money. In the case of Faire, I think there are a few things that are fundamentally unsustainable and won’t last forever.
The unsustainable things Faire is doing that likely won’t last:
Lot’s of “breathing room” for makers.
The reason that many makers are seeing rapid gains in orders from using Faire is that currently, there is not maker saturation in many product categories. Right now, Faire is carefully managing the number and type of makers they accept into the platform -- which means that if you get in, you often get a hit of orders. But this won’t last forever. To maximize profits, Faire will need to push maker saturation up until their profits are as high as they can be. That means that makers who are seeing tons of orders now will see that drop as equilibrium/saturation is reached in the marketplace.
First order perks and free returns.
Two tools that Faire is using to get folks engaged in the marketplace are $200 of free product on first orders (in some cases) and free returns. This is a great example of a program that loses money now, to gain customers, and will eventually be rolled back. Am I positive that’s the case? No. But if I were a Faire maker, I wouldn’t depend on those perks as part of my model or plan or calculations. They’re just too likely to disappear without much notice.
Honestly, you should take advantage of things that are good for your business, even if they won’t last forever -- you just shouldn’t depend on them. So take advantage of free returns and new orders and first-order perks. But don’t count on them lasting or build them into your wholesale numbers.
3. Make connecting your job.
Many makers wish they could just make their art and that someone else could handle X [business, finances, sales, stockist relationships.] Faire is tantalizing because it almost feels like that’s what happened -- they swooped in and are “handling” wholesale for you.
But to be blunt: Faire is not handling wholesale for you. Faire is a wholesale tool that you can use within your overall wholesale strategy. Wholesale is still your job. And you simply won’t grow your wholesale business over time unless you cultivate real, positive, present relationships with the store owners who buy from you. We’ve helped 600+ makers grow their wholesale business. And those that thrive are those that see relationships as part of their art -- not a distraction from it. The others? Those that, for instance, thought Etsy Wholesale was “handling” wholesale for them before they abruptly closed? Many of them aren’t in business anymore.
Make sure you’re connecting with stockists outside of Faire, and that you have a system to do just that. If you’re a Wholesale In a Box maker, you can use the Wholesale In a Box app and system to cultivate relationships with stockists -- even if they come from Faire. Just shoot us a note with your new stockists; we’ll set them up in your app and you can keep in touch with folks in your way, on your schedule. If you’re not a Wholesale In a Box maker, be sure to build your own structure to cultivate relationships with stockists -- and stay on top of it.
Long story short? Prioritize relationships.
Yes, Faire can be a powerful tool as it stands today. Use Faire if it is helping you create more and better relationships with shops. And drop it or change how you use Faire if it is hurting your relationships with shops.
We realize every business will have their own experiences with this service. So we’d love to hear your thoughts on Faire, if you’d like to share.Part of Wholesale in a Box maker membership includes unlimited coaching, we’re always available to help you work through the pros and cons of utilizing business tools like Faire. If you’re not a Wholesale in a Box maker, feel free to get in touch to learn what it’s like working with us!