There's definitely room in the market for several players (in terms of the whole crowd-design/manufacturing space), but I think that down the road, there will be one clear winner. At the end of the day, this industry is a network effects game. Inventors/sellers will always flock to the service with the largest user base to increase their chances of getting their ideas to market. Right now, I'd say the frontrunners are Kickstarter and Quirky, although I've personally seen inventors shy away from Kickstarter because of their increasingly stingy policies. Quirky probably has the most unique model by partnering with big box retailers and tapping into a much broader distribution bottleneck.
I don't think there will be one clear winner in the crowd-design/manufacturing space, I think there is room for a site for each niche.
For example, http://www.unbrandeddesigns.com/ is gaining traction as "Quirky for furniture". I see many advantages. The submissions and participants are more focused and passionate since they're only dealing with the type of product they care about. And the team can source, build, sell, and distribute more effectively because they are only working within one industry.
The site itself is a bit weird. Most of the content looks like it's loaded in via AJAX, and on a slower connection it's pretty jarring. Clicking on "See All" initially shows the "About Us" section of the page, which caused me to think I clicked the wrong link, and went back. It wasn't until I clicked it again that I noticed what was going on. At least throw some kind of AJAX spinner/placeholder or indicator that the page content is still loading.
Sounds like a great concept. But 35% of markup is too high. Margins for hardware goods are low enough already. Then you take 35% of that. I think you'll end up with a bunch of overpriced items with inventors struggling to make a profit.
I can see why you might think 35% is high. Compared to Kickstarter or Esty who only charge ~5%, we do take a larger percentage. But at the same time, we are not just a platform like they are. We are actually a retailer, and we take care of payment processing and fulfillment to consumers. Most retailers charge 50% of the retail price for these services (which cost real money).
Though Kickstarer only takes 5%, you pay another ~5% in payment processing fees, and then you must set up and pay for fulfillment yourself, which is time consuming and expensive! We think it is inefficient that every Kickstarter or Etsy creator has to come up with a solution on their own, often at a large expense. We want the creator to focus as much as possible on building the best product they can, not on fulfillment, website, video, PR, etc etc.
I understand where you're coming from, but I would argue that your true value add is discoverability or customer acquisition.
Payment processing can be added easily to any customer-facing website. One-time product fulfillment for any number of customers, for completed products all located at one place isn't too hard. Yes, packaging is a challenge, but there are dedicated e-fulfillment services like Shipwire that don't cost so much.
Assuming I have a product that I would like to sell for $100, after accounting for payment processing and order fulfillment (let's say at 3% and 5% respectively), that leaves around 27% for customer acquisition. So I have to decide if paying more than $25 to acquire each customer is worth it. If we're talking about Costco, Amazon, Walmart, maybe. Some inventors would give their first born to get on a Costco or Walmart shelf, probably for good reason too. I don't think Swish offers the same value proposition, at least not yet.
If you're going through mainstream distribution, even at large volumes, at least 30-35% between the retailer and distributor is expected for electronics. More for other classes of goods. If the value proposition is really to handle distribution and fulfillment 35% could be attractive to small businesses that are below volumes for mainstream distribution.
I guess it depends on the industry, but in my experience in homewares, 35% is not high at all. 35% is about what a normal online retailer would aim for.
From a manufacturers perspective, it is great to sell through places like this because it allows you to assess demand before investing cash in a product.
I don't mean to be a yes-man, but just to offset some of the other comments: The site is clearly an early (but totally functional) version. It will get better + prettier + more ajaxy as time goes on. Bravo on your launch!
