Fab recently laid off a third of their staff as they transition from designer flash sales into customized goods and their own private label. The business is tough and reminded me of our experiences building Makers Alley. We initially set out to build a place where people can buy customized, personal furniture from local designers. The idea was was consumers would benefit from being able to get items that are custom made and can be customized to fit individual styles while supporting a local business and makers would have a new avenue to sell their products and build their brand.
Unfortunately, we faced huge obstacles on the consumer side. We thought that with such a feel good story and compelling vision we’d have no trouble attracting people to buy furniture but it was extremely tough. We launched during the flash sales era where everyone was on a hunt for deals and discounts. We considered showing discounted prices by inflating the original price but that just didn’t feel right and we didn’t want to diminish the work of our makers and designers.
I recall talking to one of our woodworkers who told us about being approached by Fab which wanted to include some of his pieces but they wanted him to sell his pieces at too steep of a discount in addition to Fab taking a cut that it made no economic sense to do it. This validated our belief that we did not want to go down the discount route but that still didn’t help us attract consumers - especially when they were being inundated with expiring deals and flash sales. Fab wanted to promote good design from new designers but their flash sales model prohibited them from working with the designers and makers who needed it the most.
Fab’s new direction feels bittersweet. It sucks for any entrepreneur to realize that a business model doesn’t work and it absolutely sucks to have to lay off amazing people who actually believed in your vision but at the same time I do think that their new model is more sustainable and better for the long haul, not to mention that it’s now more similar to what we were trying to do Makers Alley.
Building a custom label should be easier than starting from scratch since Fab’s already associated with good design but their challenge will be changing the mindset of their customers from expecting great deals to be willing to pay more for curated, unique designs. This is going to be tough and there’s a lot more competition in this space. I suspect their biggest competitor is Etsy and that’s why they’re focusing on their private label in order to move away from that model and become more like the Warby Parker for design.