Crowdsourcing physical goods is not a simple business. But if done right, it can be a big, high margin business. That is what Courtney McColgan hopes for Shopbevel, the crowdsourced jewelry site she launched this week.
Shopbevel applies the crowdsourcing model pioneered by popular t-shirt community Threadless to jewelry. It’s a category that, like graphic design for t-shirts, has many dabblers and hobbyists. “With jewelry, it’s very widespread because you can walk into a bead store suddenly you’re a jewelry designer,” says McColgan. And that means the category is fertile for an online community. Especially one that gives those amateurs a chance to have their designs made professionally.
Shopbevel raised $750,000 in Seed funding from LightBank and Great Oaks Venture Capital. Leah Busque, founder and CEO of TaskRabbit, contributed an angel investment and Jeffrey Kalmikoff, the former Chief Creative Officer of Threadless, is an advisor.
McColgan is a Stanford business school grad who’s worked on the investor side on both Wall Street (Morgan Stanley) and Silicon Valley (DFJ). She’s also fluent in Mandarin, having started a microfinance company in China in 2007. Using all of that experience, she’s worked out a way to profitably manufacture jewelry in China based on design submissions in small batches of 50 to 100. The entire process takes over a month, she says.
Shopbevel solicits submissions around a theme for two weeks. Then community members (currently 7,000-strong after a week of its official launch) will vote. Then the top designs are chosen based on community voting, social media reactions, and Shopbevel’s team. They’re manufactured in China, shipped back to the US, photographed, and sold via Shopbevel.com’s homepage.
That’s a lot of tricky logistics in play. This is why so many have failed at this model in apparel. A few examples: In 2011, the founders of apparel contest site Velvet Brigade unceremoniously joined Modcloth without even the courtesy of an “acqui-hire” characterization. Indian company Fashionstake started out allowing users to buy a “stake” in a design but had to pivot away from that model (twice) before selling to Fab in January. And then there’s 500 Startups’ “fashion game changer” Lookk. The company’s crowdsourced apparel design site shut down last month. Crowdsourcing apparel designs does not have a good track track record.
That’s because sizing is variable, there are fewer amateur designers, and apparel has higher quality requirements with its materials. With jewelry, cheaper materials don’t necessarily cheapen the overall effect of a piece.
Still, the challenges for Shopbevel are significant: The company must make sure designers submit their prototypes with an appropriate price. The company must figure out the logistics of manufacturing a piece of jewelry based on just a photo of it. The company must ferret out fraudulent submissions of store-bought jewelry — anyone can photograph and upload a piece and if it gets selected, they could profit on its sales. (McColgan says the site filters out copyrighted images quickly and is building a variety of other safeguards against fraudsters.)
If Shopbevel can get this right, though, the payoff is high. (The company is not alone in thinking this: Beta-mode Mejuri is a competitor.) Each of Shopbevel’s items have a built-in demand thanks to the voting. Given the limited nature of each item, most of the jewelry made from Shopbevel’s 20 beta-mode contests has sold out.
The economics are favorable, too. Shopbevel pays designers 15 percent of its profits on sales. Designers don’t balk at the small cut because of the exposure they get from the platform. Shopbevel has thrown a lot of effort into getting placement for its jewels in glossy magazines and fashion blogs. The site will partner on a contest with New York’s design schools; the winner will be featured in Refinery29 and worn by a celebrity judge. Later this year Cynthia Rowley will judge a Shopbevel contest and sell the winning piece in her store.
Even designers that don’t win get indirect sales and attention, McColgan says. The program is most beneficial for amateur jewelry designers that haven’t had much luck with Etsy, where there are 2.5 million jewelry listings. Here is a way to break through the noise, sell a lot of jewelry (at no manufacturing costs) and make a royalty fee for the design. “We think a lot about media blitzes and things like that that will make our designers happy,” McColgan says. Shopbevel has 3500 designers on its site, a number that “grows dramatically” with each contest, she adds.