BostInnovation on CustomMade’s Revenue Growth and Plans for the Future
CustomMade is again in the news. BostInnovation has published an article on CustomMade’s revenue growth and its continually evolving efforts to put consumers in touch with custom makers. Mike Salguero, co-founder and CEO, and Matt Goldstein, Vice President of Corporate Development, discuss some of 2010’s developments, website enhancements, and their plans for 2011.
By Cheryl Morris
CustomMade, the Cambridge-based marketplace for artisans to sell handcrafted goods, found its niche and began generating some serious revenue in 2010 — $500,000 worth. And 2011 promises to be a year of rapid growth and expansion for the company, where they expect to drive revenues to $5 million.
The market for custom made goods is a whopping $15 billion, and CustomMade separates itself from companies like eBay and Etsy in the way it focuses on the service of having a custom goods made for you. It also is only home to professional artisans, as opposed to hobbyists.
In 2010, CustomMade enjoyed a 10-fold increase in revenue and grew its team to 20 people. This was mainly thanks to their subscription strategy, whereby custom artisans (who number more than 1,500 on the paid side) can elect to purchase annual subscriptions from $400 to $1200 to enjoy preferred placement on the CustomMade site. Otherwise, artisans can display up to three pieces of their work for free in hopes of getting found by buyers.
But the company is now starting to see consumers feel more and more comfortable transacting on the site, in part thanks to the company’s November launch of a ready-made storefront, where CustomMade takes a 15 percent cut of any pre-made goods sold through its platform.
“What’s happening now, and our vision for CustomMade as a whole, is converging,” stated Co-founder Mike Salguero. “Our platform is providing a number of easy ways for a consumer to connect with a local small business: (1) contacting community members directly to inquire about a custom project, (2) filling out simple forms to create project “leads” that are distributed to our maker community, and (3) buying ready-made items through our ReadyNow E-commerce platform.”
Because the company considers themselves a destination for custom services, their focus is providing all possible avenues for makers and consumers to connect, and letting them decide.
2011 will bring a broader array of services to custom made aficionados. “Until recently, CustomMade has been a primary destination for consumers and makers in the fine furniture and home décor world,” shared VP Corporate Development Matt Goldstein. “The demand for our platform has now been coming from all angles of the custom services world: fashion and apparel, metal works, leather goods, kitchen cutlery – you name the category.”
In line with this expansion, CustomMade customers can expect some serious enhancements to the site. On the artisan and maker side, CustomMade dedicated 2010 to fine-tuning the site’s experience. But the company wants to avoid the poor navigation and the ability to browse all the millions of pages of incredible artisans and unique work featured on CustomMade — something Etsy and eBay have arguably not gotten right. (This is in fact why I personally don’t find myself regularly using Etsy for gift-giving.)
“We want to give makers the ability to strut their stuff and consumers the ability to actually find what they’re looking for,” explained Salguero and Goldstein. “Too many other sites in our world lose control of content management and how the site is organized. We’ve got a great handle on it.”
CustomMade raised $500k in 2008 and $1.15 million in June 2010. They are now ready to “fuel the engine” for 2011 and 2012 and are in detailed discussions with their existing investors, as well as are opening the field to new investors. Boston is hot bed for custom e-commerce — with companies like Fashion Playtes, Gemvara, and Blank Label. Gemvara is estimated to have made $7M in revenue in 2010, and if CustomMade can hit $5M in 2011 they will be another company leading the way.
On Tuesday the company was featured on BusinessWeek’s (owned by Bloomberg) “America’s Most Promising Startups” slideshow, a section the publisher continually updates with new profiles. Other startups in Massachusetts that have been featured in the slideshow in the past few years include RetireLife, ClickFuel, Gemvara, IdeaPaint, The Little Pearl, Wedding Payment Plan , and Telesto MedTech.
Read more details about CustomMade’s incredible story — from its acquisition from a Maine-based cabinet maker for $150,000 to its road into the digital age — from our in-depth interview with them last May.
BostInnovation provides news for those involved in Boston’s innovative startup scene and tech community.
Congratulations, Mike and Matt!