In the Room with Jeremy Cai of Italic: Making luxury attainable and empowering manufacturers to become merchants

Selfie with Jeremy Cai

We are so excited to welcome you back to the Room for season 5! To kick off this season, we sit down with Jeremy Cai, CEO and founder of Italic. Listen to the full episode on Apple Podcasts now.

Italic is an online retailer that sells high-quality essentials from the same manufacturers as top brands, for 50–80% less. Jeremy is on a mission to make quality affordable but also to empower manufacturers to become merchants. Prior to Italic, Jeremy entered into the world of entrepreneurship as a Thiel Fellow in 2015 and went on to found Not Pot and Fountain. While Italic was a departure from previous spaces (such as high-volume hiring through Fountain), the mission of empowering manufacturers was in Jeremy’s DNA.

This week’s episode of The Room Podcast explores insights and themes such as the early founding firsts of Italic, the evolution of the Italic business model, what it means to be a “merchant”, and the future of eCommerce marketplaces. Let’s open the door.

Season 5 of The Room Podcast is proudly sponsored by our friends at Silicon Valley Bank and Cooley.

Theme 1: Early days and being a third-time founder

While Italic was Jermey’s first stab at building an eCommerce marketplace, it wasn’t his first time founding a startup, and it also wasn’t his first encounter with the manufacturing industry. In this episode, Jeremy sheds light on his upbringing and how his family’s background in the manufacturing sector influenced his worldview. Jeremy grew up in Chicago and would spend dinnertime conversations with his parents talking about new clients, equipment, quality control, facilities, etc. Jeremy didn’t want to pursue his parents’ career, which informed going after founding businesses in very different sectors, but is now back disrupting the space he grew up knowing so well with Italic. In 2015 Jeremy dropped out of college and entered the world of startups via the Theil Fellowship, founding his first company, Fountain, which disrupted HR software. During his early days as a founder, Jeremy realized the importance of a team. He reflects that first-time founders often care about products, second-time founders care about disruption, but he, as a third-time founder, cares first and foremost about the people he works with and the team he has built.

Theme 2: Business model evolution

Italic initially started with a membership model, members could pay a monthly or yearly subscription fee to get access to the Italic platform to purchase luxury for less. Today, that’s not the case. Italic has opened to non-members. Italic originally launched with a membership model as a way to compensate for the losses they were seeing on the orders due to the competitive prices they wanted to set. As Italic has scaled, even though they are maintaining the same quality and experience, they are now able to open up their marketplace and provide membership as an optional upgrade. The opening up of the platform is aligned with Italic’s mission to empower everyone to have a way to purchase high-quality products and to live well as a result of their purchase. Italic is dependent on the concept of a flywheel, the more customers Italic gets, the more leverage they have to bring on more manufacturers, expand their product line, and build for this generation (and next) of consumers.

Theme 3: Building an eCommerce marketplace

In this episode, Jeremy digs into the marketplace dynamics of Italic and where they are looking to next. Jeremy explains that as Italic is a supply-driven business, they need merchants to come onto the platform, see the value proposition of Italic, and grow their business. Historically, manufacturers have been opposed to new marketplaces due to generational tradition and many-decade contracts with their customers, but newer generations of manufacturers are now excited to innovate with the rapid growth of eCommerce. As manufacturers are a low-margin business, Italic is now providing them an opportunity to double or triple their margins. On the demand side, Italic needed to validate what consumers were looking for, but given Italic’s growth, there certainly are many telltale signs that consumers do in fact care about the intersection of quality and price point. After pitching to over 150 manufacturers and getting traction from shippers, Italic has successfully established a new marketplace model that now continues to scale.

Thanks for checking out this episode of The Room Podcast.

Stream this episode on Apple Podcasts and Spotify

We will be back next Tuesday for a new, inspiring conversation. In the meantime, catch up on all our latest episodes, available now on all podcast streaming platforms, including Apple Podcasts and Spotify.

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