UPDATE: The company that is the subject of this post has responded with a comment which is copied at the end.
Let’s talk stuff. The Internet is great for little stuff — stuff that fits in a nice little box that Fedex or the post office can carry — but it has always been terrible for big stuff, like furniture. It’s big and expensive to warehouse; it’s heavy and expensive and difficult to move. The Internet graveyard is full of furniture sites that failed because of these problems and costs.
That’s why so much old furniture gets put out on the curb and gets hauled to the dump; it costs more to rent a truck to move grandma’s sofa to your apartment than it does to go to IKEA and buy a new one. The alternatives are pretty much limited to Craigslist and the like.
Then there's Move Loot, a company founded in 2013 in San Francisco that just expanded into MNN’s home town of Atlanta. It was described on Bloomberg as “a consignment shop mashed up with a Web store like Easy and a delivery service like UPS.” It’s not like Craigslist at all; It was pitched as a seamless integrated system where they moved the furniture to their warehouse, did minor refurbishment, in-house photography and then put it up on their website. In exchange, they took 50 percent of the sale price.
This is a lot more work. But it is also an opportunity: “Only 10% of the $200 billion furniture market is online,” co-founder and CEO Bill Bobbitt told Curbed. "That’s crazy. It’s cost-prohibitive because of the logistics. Our goal is to offer that last-mile solution.”
As Kyle Stock noted in Bloomberg:
A company like Etsy doesn’t have to worry about any of those things; it simply provides a platform and collects a fee. And there are plenty of potential — and not immediately obvious — problems when a prospective seller pitches a product to Move Loot. Chief among them: bedbugs and strange smells. The company turns down some 30 percent of proposed products.
Move Loot sounds like an Internet company and looks like one, and it certainly raised funding like one, including $9 million from the likes of Google Ventures and Y Combinator. But in fact, it was very bricks and mortar, with a hub-and-spoke system of warehouses, real live employees and delivery trucks. As noted on Tech Crunch:
Move Loot has created a fully integrated marketplace to handle last-mile delivery and really control the user experience. Workers who do furniture pickup and delivery are salaried employees with benefits, not 1099 contractors. “We want to have best-in-class movers and best-in-class delivery people,” Bobbitt said. “They are our touch point with the customer.”
But all those warehouses and those moves in and out get to be expensive. Can they run a business and make any money this way? Possibly not. Just last week, on Feb. 8, Move Loot announced a new submission process to let users “Sell more, faster for more moolah.” The company has totally changed the process, but on the Atlanta version of the site, they changed the diagram above but at the time of this writing, they had not even revised the copy, still describing the process as one in which Move Loot picks up and hold the object: "Once the consignment offer is accepted, you will be able to select a pickup appointment for your submission.":
But when you look at the San Francisco site, there's a new process, which is a very different business model. The company now asks customers to submit photographs, and the product is listed on the website while the customer keeps the piece, no warehouse involved. Then Move Loot picks it up and delivers it to the buyer:
Move Loot pretty much admits the problem on its blog:
We want to continue on this path upwards, and we’ve reached a point where the best way forward is to move past the physical limitations that picking up furniture before listing had on our sellers, our buyers and our marketplace We’re continuing to invest in the same great last-mile service that we’ve grown from the ground up and sets us apart from any other business in the space. We’re building the easiest way to buy and sell. And starting now we’ll be able to list and sell your products faster, and expand our service to reach more people sooner. Stay tuned for more big things ahead!
The company does try to make a silk purse out of this sow's ear, suggesting that items will sell faster and sellers will get a higher percentage. But essentially it looks like the company is giving up on the warehouses and turning the company into an Internet-based sales site like Etsy or Craigslist with a moving company attached. The customer takes the crappy Craigslist photos, the designer setups disappear, the seller does the storage. Which makes it much easier to expand into new markets and do without all that expensive bricks-and-mortar stuff.
As Bobbit told Bloomberg last year; "The logistics part is very scary." It's also really expensive and doesn't scale very well. Move Loot is still interesting and provides a useful service and a beautiful website, but it's not quite the same thing as it was.
Oh well, it was fun while it lasted.
UPDATE: I have received an email from an employee of Move Loot who writes:
I work with Move Loot and just saw your piece and wanted to address your speculation that "the company is giving up on the warehouses and turning the company into an Internet-based sales site like Etsy or Craigslist with a moving company attached."
This is false. The company is not giving up on warehouses and turning the company into an Internet-based sales site like Etsy or Craigslist with a moving company attached. They are evolving the model as they said in the blog post, in a way to be able to better serve their users and expand their service areas. More exciting news to come on how this will evolve in the coming month.