The retail sector is undergoing considerable transformation. While direct-to-consumer (D2C) brands have redefined shopping habits, Quince aims to enact an even more substantial shift in the retail model.

The company, which secured $8.5 million in seed funding last year – a detail recently disclosed – is focused on reimagining the supply chain with its own collection of 700 products, encompassing men’s and women’s clothing, accessories, jewelry, and home décor.

Following a year of beta testing under the name “Last Brand,” Quince is now launching with a novel approach termed “M2C,” representing manufacturer to consumer.

The core concept involves Quince collaborating directly with factories, providing designs for essential items – those that are not heavily patterned or branded – and placing orders that can be adjusted weekly to align with current demand. As customer orders are received, Quince coordinates with manufacturers to optimize production, preventing both overstocking and shortages for each specific product. The factory then ships the items directly to the customer, bypassing traditional distribution centers or retail stores.

One might assume that factories would be hesitant to embrace this model, given the potential losses they face when brands overestimate demand and are unable to sell through their inventory. However, co-founder and CEO Sid Gupta explains that this new approach is being introduced at a critical juncture in the retail industry. Larger brands, those that typically place orders for substantial quantities like 100,000 units, are facing challenges during the pandemic and are streamlining their product offerings.

This situation presents factories with limited options: partnering with D2C brands or utilizing online marketplaces such as Amazon.

“Demand from D2C businesses is fragmented, and most D2C companies remain relatively small in scale,” Gupta stated. “Achieving significant efficiency gains can be difficult. The challenge with selling on a marketplace like Amazon is the intense competition from numerous sellers offering the same products. If a factory produces high-quality goods, compensates its workers fairly, and operates in an environmentally responsible manner, its costs may be 3% to 5% higher.”

He further explained that it is challenging for a factory to effectively communicate these values to customers on Amazon, and even more difficult to master the complexities of online advertising.

These circumstances have made manufacturers more receptive to exploring alternative methods of operation.

By establishing direct relationships with factories, Quince asserts its ability to substantially reduce the cost of luxury items, offering a cashmere sweater for around $50 compared to the $150+ price point commonly seen with other brands. Quince collaborates with over 30 factories worldwide.

Gupta emphasizes that the company has also prioritized sustainability, establishing standards related to material sourcing (utilizing organic or recycled materials), manufacturing processes (ensuring ecological soundness), worker compensation, and other factors. The company is also investigating programs to share profits with both the factories and their employees.

The funding secured last fall enabled Quince to conduct beta testing throughout the previous year and expand its team to 16 members, including co-founders Becky Mortimer and Sourabh Mahajan. The workforce is comprised of 35% female employees and 65% minority employees.

The company’s investors include Founders Fund, 8VC and Basis Set Ventures.