How Online Marketplace Faire Delivers Enterprise-Grade Purchasing Power to Small Businesses
Marcelo Cortes, the Co-founder and CTO of Faire, discusses how a small product messaging change enabled SMB adoption of its purchasing, product, and sell-through analytics powered marketplace.
For so long, the wholesale industry lagged behind the times. The technology involved was old, or even non-existent, and people trying to sell products were trapped in a old-school process that wasn’t meeting the needs of the time.
Something needed to change.
Enter Marcelo Cortes and his co-founders, who created a company called Faire.
Faire was founded in 2017 and it is a wholesale marketplace that helps retailers find and buy wholesale and while also connecting makers with the physical stores or businesses. The idea was born when Cortes and his co-founders were working at Square and they saw an opportunity to build something that made the eCommerce experience more welcoming to small businesses, and make data more available to them as well.
“If you think of a small store, a brick and mortar store that might have one to five locations, which is usually our target audience, they’re trying to compete with much larger brick and mortar stores, big box stores, or with eCommerce,” Cortes said. “They have no data. If you think of Walmart, they have data on all their products. They know what sells well where, and what time of the year. The little store, they’re buying products basically all by intuition. They see a few products, they look at it and they have to make a decision whether they’re customers are going to like it or not. We realized that we can actually build something that will give them the ability to have the same type of tools that much larger businesses, or big box stores, or eCommerce platforms have, to make much more well-informed decisions on what products are going to work well in their stores.”
But even if you are only focusing on small businesses, you can’t group them all together and treat them the same. Each company, maker and wholesaler has its own challenges, markets to a unique set of customers and sells a vast assortment of goods. Finding a way to serve each of those customers in a way that is personal to them is a challenge. And it is one of the main areas that Cortes is focused on at Faire. He is creating a marketplace tailored to the individual, and that is what is separating Faire from the rest of the pack.
“That’s another place where technology is used to our own advantage,” Cortes said. “We need to be very good at serving customers differently and providing a completely customized experience to different types of stores. That’s what we do. That’s why data science is so important for us, and we have a very strong data science team tackling this problem of ranking and personalization. The reality is, we really treat each customer differently. Every different store that comes to our platform, they have a completely different experience. If you are a store that sells gifts, you’re going to see a lot of gifts. The more we learn about you, the things that you like to see, the search that you make, the products that you sell and you buy from us, the more accurate we get at serving you products that will connect well with your store.
“From day zero, we have spent a lot of time and effort making sure that we have data, and we are very data-driven, and we are building a very custom experience for every different person that comes to our website.”
And from day zero, they were experimenting, building, and iterating based on the data they were collecting. They were following the lead of the eCommerce platforms that had come before them and were working and built their own versions of them backed by the data they were gathering.
Eventually, they started integrating the way sales and payment were processed, and they built recommendation engines that could learn about their customers and partners in order to create the best possible experience for everyone involved. They fixed problems that came up along the way and worked quickly so that issues didn’t linger.
All of that work, personalization, iteration and data analytics eventually paid off, because very early on Faire had found product-market fit and a model people could work with — even if it took a little creative marketing to make everyone more comfortable.
“When we were in the early days trying to finding product market fit, our very first idea for Faire …we were very sure that we could build a successful consignment eCommerce platform where we would connect to the point of sale systems in the stores,” Cortes explained. “And we would know when they sell something, and they would pay us when they sell. They would keep things until they don’t want them anymore. It turned out that whenever we told people consignment, they ran away from us. We couldn’t understand it. We’re like, ‘It’s a good thing, we’re giving you very good products. We’ve built this machine that finds good products, and we’ll let you carry them for free.’ Then we changed our message. We started to call it ‘Try before you buy.’”
The shift in messaging turned out to be the tipping point, because soon Faire was on its way to the top. Today, the company has a billion-dollar valuation, and it is still growing.
But even though the company is scaling, staying focused on the community building aspect of bringing small businesses and makers together is still important for Cortes and the entire team at Faire. That’s why they have introduced a new podcast called Brick and Order to bring their community together.
“Even though we are online, our customers are not online,” Cortes said. “We are dealing with offline local retailers, and they love community. That’s one of the initiatives that we’re trying to build, to help them with community, to listen to each other’s stories, to learn from each other’s mistakes, and connect them more. It was especially important to launch it now with this whole COVID-19 era. People need more information.”
Thanks to the podcast, as well as new initiatives Faire has introduced recently, makers and buyers are feeling a sense of connection, they are learning from each other and they are building their businesses even in tough times.
That growth doesn’t appear to be slowing down, and Faire is going to be continuing to use data to ensure that there is only more success for small businesses in the future.
To hear more from Marcelo Cortes, listen to his episode of Up Next in Commerce here.