Interview: Bradford Shellhammer, founder and chief design officer of Fab, explains why the company dropped the "flash sales" model to become both a manufacturer and online retailer of design. In an interview with Dezeen he discusses how Fab is disrupting the industry, how it can help designers and how it "absolutely" wants to open physical stores.

"Some design retailers see us as a threat," he said, but argued that Fab is raising the profile of design. "The more people talk about it, the more awareness there is, the bigger the pie is for everyone."

Some people will always want to walk into a physical store to buy furniture, he said, adding that younger customers are increasingly comfortable shopping on their smartphones - and want to buy cheaper, less elitist products.

"We’re talking to people who’ve never heard of the Conran Shop before, let alone heard of Charles and Ray Eames, Jasper Morrison, Knoll, Vitra, Moooi," he said. "They don’t know what any of that stuff is. These are people who live on their phones and they just know if it’s cool or not. They’re a group of people who would be intimidated by walking into a Conran Shop."

Shellhammer spoke to Dezeen at the Conran Shop Marylebone in London, where Fab held its latest Disrupting Design event. This saw young designers presenting their products to a jury in the hope that Fab will put them into production.

"I have dozens, if not hundreds, of stories of designers whose lives have changed through selling on Fab," he said, explaining that Fab offers young designers an alternative to self-production or royalties.

Fab would like to open its own physical stores, he admitted. "A Fab store would have to have fashion, have design, have some kind of food and cultural element, and it would have diffuse technology – it couldn’t just be a store, because what’s the point?" he said.

Together with Jason Goldberg, Shellhammer launched Fab in 2011 as a flash-sale site for designer goods and has grown in just two years into a $1 billion dollar company with sales in around 30 countries and 600 employees. Acquisitions along the way included UK flash-sales start-up Llustre and German site Casacanda.

However in July it announced it was switching its strategy away from flash sales - which involved selling discounted products for a limited time - and towards the more traditional retail approach of developing original products and holding inventory. Over 100 employees at its European headquarters in Berlin were laid off as it centralised its global operations in New York.

"[Fab] definitely is disruptive to the design retail and supply chain," said Shellhammer. "But I think we’re also disrupting a lot of people’s perceptions of what design is. I think there are still a lot of people within the design world who turn their nose up at Fab, but more and more we’re winning them over."

Shellhammer admitted that Fab's reputation suffered during its spectacular growth. "For the sake of putting more and more products on the site, a bit of the curation was lost," he said. "I do think that looking back, one of the things I’d like to take back is that, for a while, Fab did rely too heavily on kitsch and gimmick."

Here's an edited transcript of the interview:

Marcus Fairs: Tell us how Fab's business model has changed.

Bradford Shellhammer: Fab is now in the process of pivoting its business once again. Previously we launched as a marketplace for designers: emerging younger talents who could not get into traditional brick-and-mortar retailers and those whose products would be shunned by big-box retailers from Amazon to Walmart to whatever.

Over the evolution we realised that wasn’t necessarily a sustainable business because we weren’t actually taking inventory. So although our buyers were taking really spectacular and wonderful products and uncovering designers and telling their stories, there was also the whole back side of operating a retail business, which is the inventory side and shipping things quickly and fast. And in a world of Amazon that is the expectation: regardless of how special or unique the product is, people need to get it quickly.

So previously we had a business model which was called “sell first,” which is where we would find something great, we would vet it, take photography and present it to the world. Then we’d buy it from the designers and ship it to the customer. That could make for a 20-day lead time. And people don’t want to wait that long, especially for a bag or a glass or a pair of shoes.

So what we’re doing now is moving our business to an inventory-planning model, which is like a traditional store. And also we’re moving to developing and manufacturing our own products, which is why we’re here today. So that’s a big shift in our business too.

Marcus Fairs: What difference will it make to designers?

Bradford Shellhammer: Previously we were simply buying other people’s products, but we realised pretty quickly that a lot of designers whose products we were selling weren’t scaling their businesses effectively because they were often buying their raw materials at retail [prices]. Like they were going into a hardware shop. They had no scale, they could not leverage, they did not have the capital to go any buy mass amounts of wood to bring the price down on their products.

So what we were realising was that we had this really unique opportunity to tap into this designer group that we have worked with, who have not only designed things but who have up until now made things, who really don’t want to be makers. They want to be designers. And all the stuff that goes along with that – the manufacturing, the marketing, the sales, the inventorying.

We are now in the process of going to those people and saying: “we can take that part of the process away from you; you can carry on designing. We’re not going to knock you off like other big retailers, but we’ll pay you and put your name up there and say this was your idea and that you designed it, and you’ll come along with us on the manufacturing and design process so that the quality is to your liking”. But because we have such a larger audience and we ship to 30 countries, we can get it at a much better price.

Marcus Fairs: So in some ways you’re acting like a traditional producer or manufacturer, and a traditional store, at the same time.

Bradford Shellhammer: Yeah! And I’m trying to think who else do that. I guess a lot of big American companies like Target and the like do that. But not many people; they usually do one or the other.

Marcus Fairs: When you talk about design, what do you mean? We’re here in Conran, which sells high European design, quite expensive, very well made. And then there’s the cheaper, more gimmicky stuff. You seem to have both.

Bradford Shellhammer: It’s not about the price point for me; it’s about whether there’s something special or cool about it. But I think Fab has sometimes gone too gimmicky. That’s something that we’ve learned over the past two years: that for the sake of putting more and more products on the site, a bit of the curation was lost.

But I don’t think I’d ever want to give up the more humorous things, the quirky things. The world of serious design is really boring to me. I want to have some fun; I want to laugh. I like humour and I like kitsch. But kitsch needs to come in dribs and drabs rather than overload. And I do think that looking back, one of the things I’d like to take back is that, for a while, Fab did rely too heavily on kitsch and gimmick.

Marcus Fairs: I was told the best-selling product at one stage was a cardboard cat scratcher or something.

Bradford Shellhammer: Yeah. At one time it was a cardboard cat scratcher! That was actually a pretty basic item. It was really just a simple block of corrugated cardboard with no decals, no colour, nothing. It’s actually a very pretty object; a functional, affordable object that people needed. Shockingly! I think we sold three or four thousand of them last holiday season.

Marcus Fairs: Is design popular enough to sustain a business of your size?

Bradford Shellhammer: It can be! You’re recording me on an iPhone so I’d say yes probably. I think so. There are lots of businesses who have proven that design does matter. That’s one of the things a lot of people ask, especially when we started: is design too niche, is it too small a world? And I’m like, no. Maybe what they define as design is too small.

In an article about us recently, Murray Moss - who is the highest of the high in design – said Fab is broadening the definition of what design could be. I’m not being so grand as to say our store is forcing people to think differently about what design is, but I do think maybe we’re enticing people to talk about and understand design more than they did before. And we’re not coming along and saying that in a serious way, although a lot of the things we sell are very serious.

Marcus Fairs: You called this event Disrupting Design. How disruptive is your business to design retail and design supply chains?

Bradford Shellhammer: I think it’s more than just disruptive to design retail and supply chains. It definitely is disruptive to design retail and supply chain but we’re not the first company to come along and disrupt traditional retail. But I think we’re also disrupting a lot of people’s perceptions of what design is. I think there are still a lot of people within the design world who turn their nose up at Fab, but more and more we’re winning them over.

Casper Vissers from Moooi has been a big fan. He calls it “turbulence”. We’re getting people to think about what design is. I don’t want design to be something that’s kept in a glass case or put in a museum; something that’s elitist. Design and luxury don’t have to be the same thing. Especially in the United States, design is confused for something that’s elitist and out of reach.

So a big part of the mission of Fab is to say there is an alternative to buying things that are mass-produced, that are from your limited retail choices at the mall on the corner. If it’s a piece of jewellery or a backpack or a sofa, there should be something that’s an option for more people. At a better price than what’s available now.

The idea of a $10,000 sofa just doesn’t seem right to me. I just don’t understand it. Why can’t the people who can’t afford a $10,000 sofa have something a little more special too? That’s what we’re trying to do at Fab.

Marcus Fairs: We’re here at Conran… but aren’t you a threat to their business model?

Bradford Shellhammer: Yes and no. Jasper Conran and I met and we hit it off and this is something that two friends decided to do together. I have great respect for what his father did. It’s very much alive in what Fab is all about. It’s this mixture of things found all over the world with icons of design so it’s a big honour to be here.

Marcus Fairs: Jasper doesn’t see you as a threat?

Bradford Shellhammer: I know for a fact that some design retailers see us as a threat but the more people talk about it, the more awareness there is, the bigger the pie is for everyone. There’s always going to be the person that wants to walk into a shop, sit down on a sofa and touch something.

But the products of the world are endless. I don’t have to sell the same things as the Conran shop or other retailers. We sell some of the same brands as Conran, but we’re not speaking to the same customer. Our customers are much younger, they’re buying things at a much lower price point. The Conran customer is an older customer with a bit more money.

We’re talking to people who’ve never heard of The Conran Shop before, let alone heard of Charles and Ray Eames, Jasper Morrison, Knoll, Vitra, Moooi. They don’t know what any of that stuff is. These are people who live on their phones and they just know if it’s cool or not. They’re a group of people who would be intimidated by walking into a Conran shop.

The whole point of Fab is that I don’t want a world where everyone buys things in the same place … I would hate it if other retailers shrivel up and die. But that’s what was happening in New York and America. Design companies were going out of business and a lot of people who were making things just didn’t have a place to sell their stuff. So part of the inspiration for Fab was to give them a platform. And the people that were here today, they couldn’t just walk into the buying office of the Conran shop, or the MoMA shop or whoever.

Marcus Fairs: It’s tough for designers. They can pitch to an established brand and more than likely receive terrible royalties or they can produce themselves and have to worry about manufacturing, marketing, selling and shipping.

Bradford Shellhammer: Or you can make something for a retailer that has scale; that can sell a lot of products. That’s the beauty of what we have. Designers can make more money than they would at one of these old-school design manufacturing brands licencing their products, because we have an audience.

Marcus Fairs: And do you have those success stories? Are designers making a living from sales on Fab?

Bradford Shellhammer: I have dozens, if not hundreds, of stories of designers whose lives have changed through selling on Fab. Who have quit their day jobs, hired assistants and focussed 100% of their energy and attention to their craft because of Fab. I don’t yet have stories where the people whose products we manufactured are doing that, because we’re just starting down that road. I’m hoping we can soon start doing that.

But yeah, I get letters all the time saying “I got out of credit card debt because of Fab” or “I quit my day job”, “I hired my first assistant”, “We leased an office space”, “Our business is growing” There’s a woman in Delaware who designs jewellery; she actually designed this earring for me. She bought a house. She put a down payment on a house from the money she made selling jewellery on Fab.

I’ve been showered with really unique gifts from Marcus Kirby of Future Maps - who was here today - because of the amount of sales of his maps. It’s not just a nice order for a few hundred pieces; it’s helping them sustain their business.

The flip-side is there are also people on Fab who are not seeing a difference. More and more though those are the more established brands. We do best with things people haven’t seen before. I’m not making a difference to Vitra’s bottom line.

Marcus Fairs: How many designers have taken part in the Disrupting Design callout and how many will get their products into production?

Bradford Shellhammer: We did it in Milan first [in April] and we had 250 people show up and it was crazy. We did it in New York next [in May] and we had less than 100 people. It was still crazy. And we’ve done it again today and I felt like today was the best.

But I think the calibre of the stuff is improving too. In Milan we shortlisted about 10 items and we have about four or five things that are going into production. They will be launched at least in time for Milan next year. In New York we had more things shortlisted; we had less stuff but better stuff. We have about ten things in production right now.

Even outside of these orchestrated meetings we’ve done a really good job of letting people contact Fab with ideas. We’ve taken a lot of chances on people that nobody else would take a chance on, and over and over again those have been the hits.

Marcus Fairs: Can you envisage a time when you have physical stores?

Bradford Shellhammer: Absolutely! Of course! But I don’t think it’s necessary. A lot of people, even within our company, say “we need to have physical retail eventually because people want to touch and feel things” and I'm like, actually, no. That’s an old way of thinking. Young people actually don’t. If it’s not in here [waving iPhone] they’re not going to engage with it. But the idea of bringing Fab to life in a setting and capturing some of the energy you saw here today would be really wonderful.

Marcus Fairs: So it’s something that appeals to you; it’s not something you’re actually planning?

Bradford Shellhammer: We do have one showroom now. We acquired a company in Germany called Massive Concept and it’s now been called Fab Designed By You. It’s our custom furniture website, which is separate from Fab currently. Where you can go and make a wood table to any specification you want; it’s made by hand in Poland and ships directly to your door, and it’s a lot less than any other custom furniture you can get in the world and it’s amazing quality.

So we have this small showroom in Hamburg. So we’re tiptoeing into showroom space and playing around with retail there. And we’ll probably grow that concept too. But in terms of a Fab store: a Fab store would have to have fashion, have design, have some kind of food and cultural element, and it would have diffuse technology – it couldn’t just be a store, because what’s the point? We’re not actively solving that problem but we talk about it all the time. It’s definitely something we want to do. But there’s a million things we want to do! So it’s deciding which way to go. You can’t do everything at once.