Unless it’s handmade or extremely high-end, most furniture sold in the US is manufactured in China, and the designs are white label, meaning retailers brand and sell identical pieces. Deal Décor figured if we were all buying the same furniture from the same place, there had to be a cheaper way to do it. Today the ecommerce startup launches its furniture deals to California customers and announces seed funding of $1.2 million from angels including Mark Stevens of Sequoia, Rick Thompson, and Saeed Amidi.
Deal Décor places three to five pieces of furniture on sale in a 10-day deal with new pieces launching every week. Getting the deal requires buying in large numbers and, for now, living in California. Deals will be available in more states before the end of the year.
The San Francisco-based startup tested the model at a beta sale last year in the Bay Area where it sold 65 sectional sofas for $399, which it says sells on Amazon and at national furniture stores for $899.
Deal Décor’s website looks a bit ecommerce circa Overstock.com, but the business model is all Warby Parker, among the first to popularize a factory-to-consumer ecommerce model with its designer-identical eyeglass frames from China.
“There’s been an evolution of supply chain in Asia. Agents who negotiated deals have gone away and the wholesaler model is gaining traction,” says co-founder Gregory Lok.
Lok, who has lived in China for eight years, started by visiting the factories that manufacture furniture for retailers like Pottery Barn and Crate and Barrel. He and his co-founder Craig Sakuma had both worked in big box retail for Home Depot and Target. They researched the top selling pieces and negotiated a price with the Chinese manufacturers for a container’s worth to California.
The catch? The container must be full in order to make it a deal. The other catch? The manufacturer will add the order to its existing run, a timetable set by the big name buyers, not Deal Décor.
In its video on how it works, Deal Décor declares the ideal customer “patient and savvy.” Patience is required when an order can take up to 16 weeks. The language on the website also clearly states that enough people must commit to buy to unlock a deal. Lok said filling one container takes about 50 loveseats. Online group buying is a fairly new concept and Deal Décor should be prepared for disappointed customers if a deal doesn’t come through.
Where it may get really tricky is when the furniture arrives in California, Deal Décor’s launch state because it was easy to establish third-party delivery services there. Buyers have an option to pick up furniture, though it’s not clear where, or pay extra to have it delivered, but it’s not clear how much. Ensuring customer satisfaction at this stage will be critical and if Deal Décor pulls it off, it could pave the way for more factory-to-consumer ecommerce models.