Indigo plans to sell extra services to its makers and retailers down the line. (Traditional wholesale reps usually take 10% commission, Cooke says.) ![]() ![]() Indigo Fair charges nothing to retailers, and instead makes money from an 18% commission fee it charges to product makers as well as an additional 3% fee if they choose to get paid via bank transfer. Around 60% of stores using Indigo opt for the try-before-you-buy feature. Those that order a second time around are five times less likely to default than those ordering for the first time. “Because that initial order is smaller, it’s less risky,” he explains. Rhodes says he can offer the 90-day terms to all retailers as long as they establish they’re a brick-and-mortar store with foot traffic. It’s why business models that would have seemed crazy a decade ago are now commonplace: StitchFix sending customers clothes to try before buying them, for instance, and Klarna letting you pay for things without a credit card number or password upfront. Indigo Fair’s willingness to trust its business users isn’t so surprising when you think about the way big data analytics has shown that most of the time, people in online commerce will pay up as they should. Rhodes, who founded the merchant-financing arm for payments firm Square, also plans to eventually set up a line of credit from a bank. He admits it’s a “somewhat capital intensive” business, and that money from investors makes it possible to carry some of the risk for retailers. The company is focused almost entirely on physical stores because it’s a “bigger opportunity” than e-commerce, says co-founder and CEO Max Rhodes. The founders of Indigo Fair, (left to right) Marcelo Cortes, Daniele Perito and Max Rhodes. That's on top of $520,000 in seed money and the prestige of graduating from Y Combinator’s winter 2017 class. It’s on track to bring in sales of $10 million after its first year in operation.Īround 2,200 retailers have signed up to Indigo Fair, a San Francisco-based startup that has also just raised another $3.4 million from Sequoia Capital and Khosla. Indigo Fair was launched in 2016 and as of today has taken orders from more than 770 brick-and-mortar retailers on its site across the United States and Canada. When asked why she thinks they can do it, she suspects it has something to do with the company being a technology startup in Silicon Valley with plenty of capital behind it. Indigo Fair recently changed its returns policy to 60 days because retailers were finding "90" so hard to believe, but Cooke still finds it extraordinary that the startup can offer such generous terms to retailers. She plans to return them well before they start gathering dust, ahead of her 90-day deadline of Dec. But Cooke couldn’t shift the cheeseboards. The skeletal candles sold out in Cooke's store, too, and most of the other products from Indigo Fair have done fine. Photo via Indigo FairĪs such, Indigo Fair's most popular products are stationary and candles, with PyroPets the number one seller. An example of a search result for products on Indigo Fair's website.
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