A major theme of the early pandemic was the shift to DTC, as brands and department stores’ wholesale relationships were strained by canceled orders and unmovable inventory.
But digital wholesale platforms like NuOrder, Joor and Faire, who connect retailers with the brands they want to buy product from, were welcomed middlemen in the last year. In the last week, Joor and Faire announced new funding rounds of $46 million and $260 million, respectively. For its part, Faire, which mostly works with independent brands, tripled its valuation from $2.5 billion to nearly $7 billion in the last six months. In March, the 10-year-old NuOrder also announced a large funding round of $45 million led by Brighton Park Capital and Imaginary Ventures.
The investor confidence in these companies is an indication that wholesale isn’t going away, only changing. These digital platforms offer a more streamlined wholesale solution compared to trade shows, but with greater scale and volume opportunities compared to individual partnerships with retailers.
According to Heath Wells, co-founder of NuOrder, the initial thinning of wholesale orders at the beginning of the pandemic has given way to a strong bounce back. NuOrder has been back to more than $1 billion in transaction volume a month since last fall, he said. Brands like Lacoste and Levi’s use the platform, along with retailers like Nordstrom.
“A lot of retailers canceled orders at the beginning. Now they’re going back out to market and are trying to fill up the store again,” Wells told Glossy last fall. “Wholesale is rebounding quite well. Saks is really doing well, and people are shopping again.”
Lauren Cooks Levitan, CFO at 4-year-old Faire, said the No. 1 thing the 200,000 retailers and 20,000 brands that Faire works with are looking for is more volume. Apparel transactions on Faire are up 5X year-over-year. Cooks Levitan said apparel is particularly well-suited to digital wholesale platforms.
“Apparel brands often have more complex, larger catalogs with lots of SKUs for different sizes and colors,” Cooks Levitan said. “We have a bulk uploader option, which makes those complicated catalogs a lot simpler.”
Notably, two of these platforms are using their new cash investments for international expansion. Faire is using its new funding to expand its existing European operations outside of the U.K., where it primarily operates now. Cooks Levitan said the European market alone represents billions of dollars of potential transaction volume.
Faire is focused solely on European expansion for now, Cooks Levitan said. Meanwhile, 11-year-old Joor has made Asia its main focus. With Joor’s new funding, it became the first digital wholesale platform to begin operating in mainland China at the beginning of June. Joor works with largre retailers and brands like Balenciaga and Neiman Marcus.
Cooks Levitan said she doesn’t see the shift that some brands made towards DTC as threatening to wholesale’s future.
“I believe that omnichannel is the future,” she said. “Yes, a lot of brands put resources into DTC over the pandemic, but wholesale is important, especially for growing an audience. Shelf space in a premium store is amazing marketing. It’s not as easy as it used to be to grow an audience solely through DTC and Instagram ads. A spot on the shelf in a good retailer is important for brand visibility. That’s not going away.”