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retail watch | Jul 28, 2022 |
Has Faire broken away from the pack of online B2B marketplaces?

As the home furnishings world returns to physical trade shows and markets, one new factor has altered the wholesale buying process—the rise of online-only B2B marketplaces. Amid a flurry of pandemic-induced growth, one platform in particular has taken the lead: San Francisco–based Faire, which topped the $1 billion mark in transactions last year. Privately owned and fueled by funding worthy of any good tech startup, the company says more than 500,000 individual international retailers are now using its service to connect with some 70,000 brands from 150 countries.

“It’s been amazing to witness the growth in new regions and markets,” Jennifer Burke, head of sales for Faire, tells Business of Home. “To visit a shop in London stocking products from Ohio, it has truly illuminated the power of this community when given the chance to connect on a global scale.”

Faire, which wrapped its eighth annual virtual market with the third annual Summer Market last week, first launched in 2017. Its tagline “The future is local” dovetails with its mission to connect small vendors and retailers around the world so they can do business as easily as large suppliers and behemoth brands like Walmart. “What makes us unique, and what has led to so many brands and retailers wanting to join the platform, is the incredible scale of our community of brands and retailers,” says Burke. “Faire has become the largest online wholesale community in the world.”

The need for such a digital marketplace hasn’t escaped other brands. Two major physical home market center operators already have their own e-commerce platforms: Juniper by International Market Centers and MarketTime from the same parent company as the Dallas Market Center. Other operators have developed their own online properties, and several other independent marketplaces exist, but Faire is currently viewed as the industry leader based on the size of its business.

When Faire began, it initially targeted smaller suppliers and buyers, often handicrafts companies and individual sellers. Unlike platforms affiliated with physical market centers, it did not include a role for sales representatives, and it has attracted new users by offering incentives such as liberal shipping and return policies. More recently, especially during the pandemic, Faire has gained acceptance among both larger suppliers and more established retailers.

“When the pandemic began, we knew our customers needed an alternative, so we flipped the traditional trade show model on its head,” says Burke. “By creating virtual global trade shows where retailers can secure essential inventory from the comfort of their homes, we catalyzed a historic industry shift during one of the most critical periods in recent years.” In spite of the importance of e-commerce, Burke sees physical markets and shows as continuing to play a key role in the wholesale buying process. For many of Faire’s brands, that process also hinges on a deep familiarity with their buyers.

“Independent retailers know their end consumer extremely well,” says Burke. “They are expert trend carriers and curators. They stock inventory based on the changing needs of their customer base, which often includes both small-batch hand-made products as well as larger, well-known brands. We remain focused on supporting the growth of all our customers, no matter their size.”

That approach is working for Faire’s community, as well as its bottom line. Last year, the brand says it had threefold year-over-year growth, also driven by its expansion into Europe and Australia. And Burke says there remains enormous upside potential for the company. “Even with Faire reaching $1 billion in annual volume in just five years, we believe the size of this market is vastly underestimated. The most exciting opportunities are still ahead. We want to ultimately be the comprehensive operating system for the trillion-dollar B2B retail industry.”

In light of all this, many in the trade speculate that Faire will eventually go public or be bought, as many successful tech startups do, but Burke says that’s not necessarily the plan. “We are focused on building a stand-alone business. We’ve been fortunate to partner with world-class investors that believe in Faire’s mission and allow us to fund our own growth. If an IPO becomes the best path forward, we would consider pursuing it, however, right now we are committed to becoming the most reliable partner for our customers.”

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Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.

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