mDesign Makes Millions on Amazon Annually but You’ve Probably Never Heard of Them
There’s a new brand called mDesign. Based in Ohio, the company creates home organization products that are selling like hotcakes on Amazon.
With over $250 million in sales this year, the five-year-old company has doubled its growth every year so far. Even so, most people have never heard of mDesign and have no idea that it exists.
It might seem strange that a company could become so successful so quickly without most everyone having heard of them at one point or having caught a glimpse of their advertising on television on another. However, in the unique world of online marketplace brands, you are more likely to have purchased their products on Amazon without knowing the company name before shopping.
Countless companies exist solely within digital marketplaces such as eBay, Amazon, Target.com, and Walmart.com. A recognizable brand name would help, of course, but digital marketplace success has more to do with a brand’s algorithm relevancy.
mDesign’s growing exposure and sales on Amazon have come from matching searchers’ keyword intent to product algorithms and understanding personal shopping needs and desires generally. The brand also, and more importantly, saw a mountain-sized pile of positive reviews come in from customers who purchased the brand’s products on Amazon early in their marketplace tenure.
Pandemic Effects
Countless Americans have hunkered down and are working from home as a result of the coronavirus. This trend has only grown and multiplied over the last 10 months, and as of today, it shows no sign of stopping.
With the shelter-at-home initiative, the demand for home organization products and home office and classroom furnishings has gone through the roof. With everyone spending more time at home, people are looking for affordable products to make their homes more functional and entertaining. mDesign creates products to fit consumers’ need for function and their desire for style. Still, affordability is of the utmost importance to shoppers, especially at this moment in time. mDesign is one of the very few brands in the online marketplace space that consistently delivers that triple threat of quality to its customers: functionality, style, and affordability.
People, not only those working from home but really everyone, are consciously spending a considerable amount of time at home, more than ever before. So, they seek easy and less expensive ways to spruce up their homes and organize their lives while keeping their surroundings polished and fun. mDesign’s home products are ideal for this task, being affordable and stylish at the core of their brand.
The Many Advantages of Marketplace Commerce
According to brand new mDesign CEO, Stacey Renfro, consumer awareness of the brand is rising. Last month, 1.5 million consumers searched mDesign on Amazon. Still, when you’re building a company in a digital marketplace, killer brand awareness isn’t crucial because the customers are already built-in. Yet, Renfro and the team at mDesign know that the brand awareness mDesign is starting to garner within the industry and among consumers will help to further their top-line sales in every Marketplace.
Traditionally, direct-to-consumer brands spend a small fortune on marketing to attract customers to their sales platform, both digital and more traditional retail arenas. With marketplace commerce, the customers funnel down through their search habits and arrive primed and ready to buy with limited effort on the seller’s part to attract them.
Direct-to-consumer companies typically spend up to 30 percent of their total revenue on marketing. By contrast, Renfro says, mDesign spends only five to six percent on marketing. In addition, mDesign has only recently emerged with their very own direct-to-consumer website, mDesign Home Decor. The website, which seems to be modeled very much after their Amazon seller’s space, has a few original marketing additions, including a branded blog filled with an overflow of content helping to point customers in the direction of their need.
The Future of Digital Commerce
The future of digital commerce is, well, let me rearrange my thoughts to be more precise. Digital commerce is the wave of the future. In today’s terms, it’s what starting a DTC brand was a decade ago. Renfro highlights the bigger picture of consumer trends where online shoppers naturally focus on marketplaces instead of websites because they are comfortable in that space.
Marketplaces now comprise nearly half of all e-commerce. A marketplace’s most significant selling point to startup brands with little capital to begin with, is that they eliminate the prohibitive cost of attracting customers online. Honestly, this is a selling point for all brands, startup or not, regardless of how much money you have in the bank. With brand names like Amazon, Walmart, eBay, and Target doing the marketing heavy-lifting, third-party brands can focus more intimately on ranking for specific search queries and finding visibility within, instead of battling every other brand inside and outside the Marketplace on Google or any other search engine.
Online marketplaces already carry cache and immense market trust from so many consumers. If they find mDesign in the Amazon marketplace, then their confidence in the brand is built-in due to their faith in Amazon’s online Marketplace as a whole.
Another benefit of e-commerce is that it offers an abundance of new opportunities. Amazon is currently spending $5.5 billion on expansion in India alone. mDesign is not only the fourth-highest ranked brand on the Amazon marketplace based on an algorithm tied to sales, reviews, and ratings, but they are quickly expanding their reach. mDesign already opened stores in several marketplaces across western Europe, with scheduled openings in many more of Amazon’s 16 online marketplaces across the world coming very soon.
Mainstay companies like Target and Walmart are expanding their online platforms. Major retail chains such as Kroger and Lowe’s plan to build their marketplaces over the next several years. Digital commerce and online marketplace shopping are here ‘now,’ and will only continue to grow into the future.
The Downside of Marketplace Commerce
Everything has a downside, and marketplace commerce is no exception. For example, high-end luxury items don’t sell very well on Amazon. However, Amazon’s recent introduction of high fashion on its platform could lead to a bigger market for other luxury goods in the future.
Marketplace competition in the digital world is fierce. If you don’t have a strong and established brand, another company can undercut you by launching a lower price knockoff product.
The relevancy in Amazon’s algorithm builds up over time, mDesign CEO Stacey Renfro adds, and it provides in-house defense against would-be hijackers. For example, Amazon dominates specific markets with affordable basics like bins. However, Amazon sells clear bins with no bells or whistles. If you want a bin or container with a presence, mDesign offers snazzy containers in rainbow colors. Amazon has no interest in selling cool-colored bins or perhaps ever calling them ‘containers,’ so everyone is happy.
Amazon’s platform also puts great importance on buyer reviews. Suppose you receive customer reviews that show your product to be durable, easy-to-manage, and “as advertised” on the platform. In that case, you can quickly earn back those customers lost to another brand by exhibiting to shoppers your brand reputation and product consistency.
Brand Acquisition by Mammoth Tech Companies is the “New Black” on Amazon
Amazon’s Marketplace has also seen the advent of substantial tech-focused corporations like Perch and Thorasio, buying up every promising small and mid-level third-party seller on the Amazon platform. While these product lines may receive an infusion of capital upon acquisition, these more prominent companies can bring visibility to the brands they acquire. Still, very little brand guidance or refocusing comes from the larger parent company as time begins to wear on the original product.
While initially giving these brands scalability and capital to manufacture and distribute products, when the time comes for these brands to update and refresh their marketplace appearance, the individualized brand attention needed to keep up with the ever-changing consumer need will not be available. It will be easier for a Perch or Thorasio to focus on new acquisitions of the trendier version of the same business to fit their portfolio. Spending the time and creative effort needed to nurture and revitalize a withering brand they acquired only years prior is very much outside of a Perch or a Thorasio’s comfort zone.
The product you purchase from the mDesign brand name is developed directly by the people who were an intricate part of the brand’s birth on Amazon in 2015. Designers continually add their skill in every stage of brand growth and achieve the many successes mDesign has seen across all digital marketplaces. With mDesign’s business model seeing unique, rocket-like growth patterns to date, every team member is working to continue on that trajectory while infusing funds into brand and product innovation and visibility in Amazon’s Marketplace, as well as other digital territories they have yet to conquer.
What’s Next for mDesign?
So far, this solution-driven product business has seen exponential earnings growth year over year. mDesign plans to chart a similar course in 2021 while expanding into new categories of products. Decor, accent furnishings, garage organization items, and even baby supplies are all available in the Marketplace now, or their appearance is on the horizon.
Luckily, mDesign and many home-focused product platforms have flourished during the COVID crisis. That trend will likely continue as work-from-home becomes the new normal. Patterns in bulk order volume through Amazon have Stacey Renfro convinced there’s also an untapped business audience out there that might be worth exploring and further monetizing in the future.
The mDesign CEO reassures us that the company does not intend to open a traditional brick-and-mortar store location in the near or distant future. “[That’s] really not our game. We first and foremost believe that the future of retail is in marketplaces and going where the customer is,” she says.
“Whether it’s brick-and-mortar or your website, you’re trying to get the consumer to take any action that’s not part of their everyday behavior—whereas they’re on marketplaces every single day.” This type of sound thinking is undoubtedly what has propelled mDesign product sales upward year over year. It won’t surprise anyone to see the brand name begin to grow with the same fury if this type of thinking continues to come from their leadership. mDesign will soon be on the mind (and the search query) of every consumer with a home or office that needs the appropriately-priced, functional, yet stylish home decor solutions that this top-selling Marketplace brand continually provides.
This article has been published in accordance with Socialnomics’ disclosure policy.
