Is the wholesale marketplace Faire right for your e-commerce business or brand?
My company has sold $2.6 million on Faire over the past 4.5 years.
As selling on Amazon has become tougher and tougher, we are thankful for the growing sales Faire has brought us.
That said, it's a difficult, counterintuitive marketplace to operate on, and one that is getting, like Amazon, more difficult.
What is Faire?
It's a wholesale marketplace. They make it easy for brick-and-mortar stores to buy your products, at wholesale prices.
So that $2.6 million in sales above, became something like $5 to $6 million in retail sales for our customers, the brick-and-mortar retailer, which is cool.
Like Amazon, Faire has its own version of "prime" which gives the brick-and-mortar retailers free shipping, for a fee. And Faire, has done a great job of combining this with terms, to enable brick-and-mortar businesses to finance their inventory purchases.
Who is Faire good for?
Faire's customer base is largely independent brick-and-mortar retailers. These businesses are not competing on price like Walmart, Aldi, or Dollar General are. They are mainly destinations, either as gift-oriented tourist shops, or, for us, Ozzy's Ostrich Adventure which sells our ostrich plush animals (not a real store, but we have many customers like this).
If you're selling a product that fits into that space, I highly recommend Faire, because, they're excellent about bringing lots of customers to your brand.
Increasing fees and complexity
Faire has not yet reached Amazon's level of complexity but it's getting there. When we first started selling on Faire, they took 15% of what you sold there and paid you your shipping costs and that was it.
Today the charges work like this:
- 15% for what they sell
- 1.9% to $3.5% depending on how fast you want to be paid
- $10/order for new customers who've never ordered from your brand
- Advertising on the platform if you want your products to be seen starting at $200/month
- Forced discounts to participate in their deal days
- And some fees around shipping that aren't even worth getting into they're so complicated
It could be worse, but the problem is that the way Faire works is very different from every other e-commerce marketplace in terms of pricing, so it ends up occupying a lot of your headspace as an operator.
And sadly, they've, like Amazon, decided to enforce pricing off of Faire meaning that if they find you selling your products for less off-Faire, they'll punish you on Faire. Normally this wouldn't be such a big deal, but Faire fees are quite high, so it requires you to bring all your pricing up, or lose Faire as a channel.
They're not Amazon when it comes to software and systems
Faire's sister company is not AWS (Amazon Web Services). They do not have dedicated artificial intelligence division.
Amazon isn't what it was when it comes to tech competence these days but for many years we were spoiled.
Faire frequently has code errors that cause inventory discrepancies, or in one case, us to be shorted $100s of dollars on multiple orders because their shipping reimbursements were not working as advertised.
Faire's payouts can sometimes be un-Faire and you need to watch them carefully to ensure you're being paid as you think you are.
Faire alternatives
While I've been selling to brick-and-mortar stores for well over a decade, we're much better as a company at e-commerce, so I'm not qualified to have a strong opinion on this topic.
For us, Faire generates more revenue than alternatives like trade shows and our sales reps, for whom I am extremely grateful. As someone who worked store-to-store door-to-door sales I know how hard it is to win those orders and when a sales rep delivers an order, I know how hard it is.
Sales reps, despite the greater workload per order vs. Faire's digital platform, have lower fees than Faire, but at least for us, have not yet been able to get us to the same levels of revenue.
Trade shows are great for general marketing and are necessary to attracting large retail clients, but are costly both in overall cost and time. With Faire, you're only paying (unless you advertise on the platform) when you get a sale, so while it's a challenge to manage, it is, in a way, less risky than committing to a trade show.
Conclusion
If your brand's products are gifty or purchased in independent retail, you need to be on Faire. It's not an option. There is certainly money to be made, but you need to be careful and have good systems and operations in place to take advantage of it.
