These Companies Will Help You Thrive!
Written by Herbert Lui
Want to try out an exciting project this summer? Want to test the waters with entrepreneurship? Learn from the best, and have a look at what some of the internet’s most interesting companies are up to:
1. Selling even more Affordable, Higher-quality Goods
Everlane is a vertically-integrated clothing brand (much like Zara) that produces only four types of fashion items each month in limited batches. They produce everything themselves, which means there’s no middle man marking up. There’s also a low chance of overproduction as their products usually sell out before the end of the month; there are also fewer inventory costs. (The exception to the rotation of items are their consistently available and affordable, premium-quality T-shirts.)
Warby Parker is a retailer that designers their own glasses. It skips the licensing fees that haunts most designer spectacles; that’s how they’re able to keep all their glasses (and a monocle) at less than $95 (prescription shades are at $150). It offers demo kits to any clients who want to try out their glasses, and it has been testing out virtual fitting as well.
In contrast to the first two retailers; Lot18 is the middleman, and functions very similarly to Gilt, buying in batches and retailing at low price points. Lot18 specializes in selling domestic wines at inexpensive prices as limited time offers – a feature that Groupon made so famous.
There are tons of methods to make money selling stuff. Everlane and Warby Parker choose to cut out the middlemen and create their own premium-quality items and distribute the product themselves. They’re able to keep 100% of the profit at a lower price point, but they have to do more work and they take more risk (minimized by production in smaller batches and carefully gauging market demand).
Lot18 (and Gilt) demonstrate how you can make money selling by finding suppliers and negotiating better deals for your customers. Where margins may be smaller, the larger scale of people buying will compensate. Lot18 leans on the spectrum of connecting supply and demand – another tactic to make good money.
2. Connecting Supply and Demand
AppSumo isn’t just one of those deal-buying sites; it specializes in digital products for web geeks. This comes in very handy for both parties – because costs per download are so cheap for manufacturers (bandwidth only), AppSumo is able to generate a lot of revenue for its partners (who don’t have to worry about selling things and sacrifice a portion of profit for that), and also offer great deals to its audience. AppSumo has recently been expanding beyond digital products though, auctioning off consulting time.
Subscription cosmetics company Loose Button connects make-up enthusiasts with new samples every month through its Luxe Box. It also serves as a kind of virtual “trunk box”, which helps suppliers gain insights into what items will be popular with the market (and which may not be looking as optimistic).
Onboardly is capable of connecting startups with available writers and content developers. It makes life easier for both parties by bringing on board published content experts in the startups niche, and getting writers paid opportunities. The original content that Onboardly creates serves as a crucial foundation to any social media strategy.
While being the middle man may be the quickest kind of tactic to execute, it can also be difficult to scale: how do you generate so much traffic and sales for your partners, after you’ve reached your entire network of friends and family? Or, how do you elicit honest feedback from your customers that can help your partners improve their products?
3. Customizing Products
Indochino is a manufacturer and retailer that sells tailored suits at affordable prices. (Think $399 for a fitted black suit.) They teach you to check your measurements with some DIY videos (and even send you free measuring tape if you don’t have any); once you’re measured, you then input your dimensions into their website and receive a suit. If it’s not to your liking, you can make adjustments at your local tailor and send the receipt to Indochino, who will cover up to $75 worth of alterations or re-make the suit for you.
Rickshaw Bagworks empowers you to create customized bags and laptop sleeves at a relatively higher price point. That’s because you’re given a ton of options to choose from – ranging from colours to material. The time you save from all those trips to the mall looking for a bag (or settling for one you don’t like) will be worth the extra cost.
Can’t pick that perfect gift? Wantful makes your life a whole lot easier: answer a few questions about the person you want to buy a gift for, and it will generate some suggestions. From the list of suggestions, pick 16 of them and Wantful creates a high-quality book featuring these suggestions, and you can leave it up to the giftee to pick the perfect gift from the book.
The phenomenon of participatory commerce has made companies like Indochino, Rickshaw, and Wantful very popular; as it turns out, the more people participate in something, the higher the perceived value (referred to in Harvard Business Review as the “IKEA effect”). Plus, your customers are much more likely to like it, because they had a say in creating it.
These are just three of the many tried-and-true ways to create value for your customers. Take a chance this summer and cut out the middlemen in your industry, connect supply with demand, or create awesome customized products. And remember: Never create things you are not proud of!
Business News with BITE.
Liked this post? Why not buy the ARB team a beer? Just click an ad or donate below (thank you!)
Liked this article? Hated it? Comment below and share your opinions with other ARB readers!