As you may or may not have heard, Fabric.com recently announced that they were getting out of the fabric business completely. In this blog, I will discuss the rise and fall of fabric.com among a few other things related to the company.
For starters, let me clear up one major misconception that I keep hearing. Fabric.com was owned by Amazon.com. Many people think that Amazon is now going to buy Fabric.com, but that is not the case. Rather, Amazon.com is closing Fabric.com and getting out of the fabric business for the time being which will likely be forever.
For a little bit of history, a gentleman named Stephen Friedman started Fabric.com in 1999 under his Phoenix Textiles Group. I actually recall the first time I met Stephen. I also recall when the Jaftex Companies started to sell to Fabric.com. It wasn’t long before that all changed when in 2008 Fabric.com was bought by Amazon.com. The thing is that at that time, Amazon was nothing like it is today. 12 years later and post-Covid, Amazon.com as you all know is a different beast of gargantuan proportions.
I won’t lie, over the years, Fabric.com had been a great Jaftex Customer. They were very loyal, buying at a minimum, a little bit of almost everything that we offered them from all of our brands. I truly enjoyed working with many of the buyers there. Those buyers were very bright. Whenever we would meet, I would learn something about how the “Amazon” people were looking at things and I found it very interesting and insightful. I always went away from those meetings with new insights, knowledge and perspectives. One of the problems to me though was that the Fabric.com people were numbers people and less so fabric people. That was a big negative to say the least and contributed to their demise in my estimation.
Over the years, I have seen many of the “big” box retailers try to find the secret sauce to fabric to no avail. The problem is that fabric is a totally different beast and always has been. The biggest reason to me that it is a different beast is that it isn’t a widget. It isn’t a can of soup or a box of cereal which is a lot easier to manage when you can just grab one off the shelf. Rather, we are dealing with a length of fabric that needs to be cut into various lengths until the entire original length is gone. In there lies a challenge.
One of the other major challenges in my eyes was the labor aspect. That, in my opinion, was the straw that broke the camel’s back for Fabric.com. The fact that someone actually had to cut the fabric each time someone wanted to buy some is a real hurdle. With minimum wage rising more and more these days, the labor aspect put a real squeeze on the margins and we know that Amazon is all about margins. It’s so much easier and cost effective for companies like Amazon to deal with widgets that can be grabbed off a shelf. This compares to a fabric bolt that needs to be taken off the shelf, rolled out on a table, measured, cut, folded, refolded and put back on the shelf. It sure sounds like a lot of costly steps to me. Those steps were eating into the profit margins for sure.
Another challenge to me was the inventory. In the Amazon way, the Fabric.com buyers bought almost every single item out there from every single vendor. They wanted to be the assortment leader and they were. However, you can see how that might create a problem at some point. Perhaps the frenzy of Covid got them so loaded up on inventory that someone decided that the Fabric.com plan was no longer sustainable, the inventory got out of control and there was no way to right the ship. Perhaps they just couldn’t figure fabric out. It kind of reminds me of what happened to FreeSpirit Fabrics under the Coats & Clark Company. As hard as they tried, they just couldn’t make it work for them. At some point, you just need to fold and cut your losses.
For many of the fabric suppliers, I think many of us had an inkling that something like this might happen. Recently, the Fabric.com people were making the effort to get suppliers to sign on to the Amazon platform. The problem with doing that was that each supplier would have to manage their own business on the Amazon platform and deal with various other aspects of that process. That was definitely a daunting task for suppliers and would probably require a part-time employee at a minimum and a full-time or more than one full-time at the maximum. Needless to say, they cut the chord before this got into full swing so we will never know the answer.
Fast forward to recent weeks, team Fabric.com sent out an email with the big announcement that they were closing the business. That was followed by lots of chatter and speculation in the industry. They are still closing and this is now all a reality. In fact, they gave all vendors the opportunity to buy back their own fabrics that Fabric.com was still holding. We at the Jaftex Companies felt it was important to protect our brands. As such, we recently purchased back all the goods that they had of ours. Not everyone in the industry felt the same, so others are allowing Fabric.com to sell off their branded goods to whoever wanted to buy them. That would concern me a little as you never know where your fabrics will show up. That could definitely create problems. For example, what if loads of quilt shop only goods ended up in big box stores? I don’t think my customers would like that…nor would I.
So the million-dollar question is, what do I think of all this and what will be the impact? In the short term, it won’t be great to have all that excess fabric floating around the market without a home, especially the way the market is right now with lots of Covid excesses. In the short term, it will also be bad not to have all the regular fabric orders from Fabric.com. More importantly though, we will miss the regular reorders that were placed weekly by Fabric.com based on their algorithms. That was important business for us to help keep moving through inventory. That will be missed for sure too.
In the long term, I think all the people that were buying from Fabric.com will have to find a new place to find fabric. I am sure there will be some fallout and perhaps this will be the impetus for some to stop sewing altogether. This will ultimately mean more business for everyone else who is selling fabric and that is a good thing. I am of course hoping that more of this business goes to quilt shops, but I am sure that plenty of this business will go to big box retailers too. Either way, I imagine that there are lots of quilters searching for new places to buy fabric.
With that, if you own a quilt shop or are an online retailer and if you play your cards right, you have an opportunity to pick up lots of new customers. Therefore, 2023 would probably be a good time to figure out how to convert these customers to your own customers. Good luck!
What do you think of all that?
