Plenty of online startups have taken aim at ‘the middleman’ in an effort to lure consumers with lower prices. But every industry has its own set of middlepeople, and some are easier to cut out than others.
Take the furniture industry, for example, where multiple layers of buyers and sellers can leave consumers paying three to five times what manufacturers originally sell their pieces for.
“It’s typical to hear phrases like ‘ripping people off,’ but in my eyes, it’s really not the case,” says Aamir Baig, the co-founder and CEO of Bryght.com, a Vancouver-based startup that’s taking a new approach to cutting furniture prices. The gross margins on these goods might be high, but each participant in the chain is adding relatively little. “If they charge any less, these companies can’t exist.”
As Mr. Baig explains it, the furniture industry is structured such that every bed and table changes hands several times. Offshore designers and retailers sell their wares to importers, who specialize in filling shipping containers – the only way shipping is economical – and wrangling the goods into North America. Then, distributors who specialize in warehousing and logistics sell the goods to retailers, who run the showrooms that let consumers poke and prod at the wares.
Bryght got its start when another co-founder, Andy Prochazka, was visiting a trade show in China – where he was visiting to learn Mandarin – and was astonished to see how little manufacturers were selling furniture for. Thus was born a business concept the founders originally called ‘Fill The Container,’ which wasn’t a great brand name, but had the virtue of accuracy: The company seeks out quality furniture, brands and photographs it, and sells it online.
But instead of shipping each piece direct from overseas, they let orders accumulate so as to fill a shipping container before having the order shipped. It’s possible, but uneconomical, to ship less-than-full container-loads. From there, the goods skip distributors and retailers, and go straight to customer’s doors. On average, delivery time is four to six weeks, though some items can be had as fast as 48 hours. The upshot is a savings of 50 to 70 per cent on comparable items, by the company’s reckoning.
The model has its risks: Consumers like to test furniture before buying. To allay concerns, Bryght offers a full money-back guarantee, including shipping costs. Any piece of furniture will be picked back up within three days. Still, the ten-person company is heartened by early success: Since its launch in March 2013, they’ve already shipped more than a hundred of pieces of furniture each month to Canada and the United States.
“The difference in the model is, maybe you can touch, look and feel the furniture, which has been a big thing for people,” says Mr. Baig. “But going though us, you have a big economic incentive.”