Jeremy Cai on changing the retail game with Italic and its unique membership model
Everyone wants quality goods at fair prices, right?
The problem is that brands don’t sell the products they source for the same prices they pay for them. To make a profit they mark their prices way up, meaning rather than paying for the quality of the product, customers are paying for the brand name.
The order of events for most brands is: source the product, slap their brand name on it, and sell it to the consumer for more than they paid.
Retail is ultimately set up to benefit the seller, not the shopper, nor the makers.
With Italic, I made it my mission to change that.
My history in a nutshell
Before founding Italic, I was co-founder and COO of Fountain.com, an enterprise HR software business. After making a graceful exit, I pursued building a business in an industry I was passionate about.
My family has a long history in manufacturing, and having worked in the industry at a young age, I understood the inefficiencies and injustice first-hand.
After years of planning and speaking with manufacturers, I founded Italic in 2018 as a means to democratize access to quality goods.
The basics of Italic: no logos, no markups
Italic is all about fairness–fair prices on all ends.
By setting it up as a membership-based shopping experience, we’ve been able to sell our growing catalog of 800+ products directly from our manufacturers to our members without excessively marking prices up.
Additionally, we source all our products from the same manufacturers as leading high-end and luxury brands–using the same materials as them too. The only difference is that the customer can buy all our products at prices for up to 80% less than the leading brands sell them for.
To make this possible, we took the brand out of the equation. No more brands, no more logos, no more markups.
Building a category-defining business
I founded Italic to be a category-defining business, one that will last the test of time, change the way we shop, and come to shape the next generation of commerce.
Foundationally, Italic is based on true transparency and aligned incentives between makers and buyers. While our model requires that manufacturers front the cost of their own inventory rather than getting paid upfront for it like in a traditional brand relationship, , our model provides manufacturers with an opportunity to achieve higher profit margins than they’d typically be able to achieve.
Marketing-wise we’ve relied mostly on paid advertising and word-of-mouth referrals, working with influencers and our Italic Rep ambassadors . Being named one of Fast Company’s most innovative retail companies also garnered a lot of attention for the brand.
Along with our commitment to our customers, we’re also committed to the manufacturers who sign on as merchants with us, and we are continually working to deepen our relationships with them.
The traditional retail industry privileges only the sellers, ripping off the customer and the manufacturers simultaneously. With Italic, I wanted to provide a path for everyone to achieve the lifestyle they aspire to and for manufacturers to become merchants of their own instead of relying on a supply chain that's extremely unfair to them.
So rather than direct-to-consumer, we’re direct-from-manufacturer, letting the customers shop directly from the manufacturers.
The Italic membership model: delivering more value
Monetizing Italic primarily through the yearly membership has been the key, affording us the ability to set a significantly more compelling and radical pricing strategy than what the traditional retail supply chain offers us.
Because of this pricing strategy, we’re able to deliver a uniquely high level of value to our customers. On top of the dramatically discounted quality goods our customers have access to, we are fully dedicated to maintaining our customers’ happiness through providing a best-in-class member experience including exclusive events, participation in product development, and around-the-clock member services.
Italic’s survival is dependent on our members, so our priority is always to tend to our customers’ needs first and foremost, and ensure their experience is unparalleled.
We don’t make money on individual product sales, so our motivation is to make our customers happy by offering them value they can’t find elsewhere.
Among the member events we offer are Thank You Thursdays, during which we drop the price on one of our best-selling products to the point where we take a loss. This is our way of saying thank you to our members who have shown us their support and offer even more value to the membership.
We also love to encourage customer engagement and connection, and those who are interested in being a part of our product development can submit product requests via type form. This feature alone has led to some of our most successful products to date, including a set of dumbbells and kettlebells launched mid-pandemic.
Members fueling growth
As a result of our unique supply chain, we’ve been able to introduce products at a speed and quality that’s entirely unmatched in our industry. We went from launching in 2018 with a small selection of roughly 40 products to now offering over 800. This includes a variety of high-quality, beautiful, and carefully designed products and clothing for your closet, home, and kitchen.
This massive growth in such a short period has been fueled by our members and suppliers. The more members who join the platform, the more leverage we have to convince new manufacturers to join as merchants. And the more manufacturers we have in our wheelhouse, the more products we can offer.
It’s a win-win-win for all three of us.
Three tips on what to focus on if you want to build a company
In founding Italic, I was focused on building a category-defining business. One that will last the test of time and shape the next generation of commerce that’s founded on true transparency, aligned incentives between makers and buyers, and providing a path for everyone to achieve the lifestyle they aspire to.
I wanted my company to be revolutionary, ethical, and dedicated to customer experience.
When it comes to the advice I would give to a founder, I wouldn’t deviate much from those three things.
My only addition will sound somewhat cliche, but no less important: follow your passion.
Moving onto Italic from my first company was a venture based just as much in passion as it was in research, and it had to be that way for me. I firmly believe that a company grounded in passion will have a much better chance of success.
So without further ado, here are my three tips to any future founder looking to build their own business:
- Revolutionize the space you’re in.
Learn about the industry you want to build a company within. Figure out how you can make it better. Our industries are often based on how individuals can make more money, usually at the expense of others.
- Think radically.
If you want your business to stand out, avoid the status quo and try revolutionizing the industry or product by offering something that is its own category.
- Prioritize the customer.
This means everything from letting their needs inspire your products to going the extra mile to provide an incredible customer experience. . Make sure your customer not only wants to come back again but also tells all of their friends about you.
Looking ahead: the future of Italic
When it comes to the future, I’m excited to keep growing Italic’s product offerings and adding on new manufacturers–this upcoming year we have plans to expand into beauty, outdoors, and pets. As the year goes on we’ll continue to scale up our marketing across all of our channels.
My ultimate dream is to see Italic become the new way for consumers to shop. I want Italic to be the next everything-store, one people go to for the best prices on high-quality product needs, from home goods to kitchen supplies to clothing to pet-care.
Italic’s entire purpose is to build a better retail model for manufacturers and consumers and we hope to eventually offer all kinds of goods and services that improve the lives of our members.
As I see it, the most incredible part of Italic is that our model allows us to truly prioritize our customers and their happiness. I can’t tell you how much I’m looking forward to introducing more customers to Italic and offering them the highest quality goods at fair prices.