A to-the-trade approach to DTC sofas: How Benchmade Modern breaks the rules

Summary

Business of Home Podcast: A To-the-Trade Approach to DTC Sofas – How Benchmade Modern Breaks the Rules

Released on February 17, 2025, the "Business of Home Podcast" hosted by Dennis Scully delves into the evolving landscape of the interior design industry. In this episode, Dennis interviews Dan Campbell, the President of Benchmade Modern, to explore how the company is revolutionizing the direct-to-consumer (DTC) sofa market by integrating traditional trade lessons with modern e-commerce strategies.

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1. Introduction to Dan Campbell and Benchmade Modern

Dennis Scully introduces Dan Campbell, highlighting his unique background as a 17-year veteran at Holly Hunt and his current leadership role at Benchmade Modern, a part of Artisan Lane’s US Manufacturing group. Unlike typical DTC companies that heavily rely on digital advertising, Benchmade Modern distinguishes itself by maintaining in-house manufacturing capabilities.

• Dan Campbell explains the company's core operations:

  "Benchmade Modern is upholstery focused. So we do custom upholstery and it's online e-commerce for both direct to consumer or the trade. And what we've done is created a process where you can customize your piece... and it's still all hand." [10:50]

2. Dan Campbell’s Career Path and Industry Insights

Dan reflects on his journey from architecture to the furniture industry, emphasizing the transition from creative aspirations to the practicalities of project management.

• Dan Campbell shares insights from his time under Sally Serkin Lewis at J. Robert Scott:

  "Quality was really my biggest takeaway from her. Just the detail and the level of making things perfect and always striving for the best quality." [03:23]

He discusses how these lessons have influenced his approach at Benchmade Modern, focusing on unwavering quality and meticulous attention to detail.

3. Transition to Artisan Lane and Embracing E-commerce

After 17 years with Holly Hunt, Dan transitioned to Benchmade Modern under Artisan Lane’s umbrella in 2019. He describes this move as a significant shift from an analog to a digital business model.

• Dan Campbell on embracing digital:

  "What I've learned is very different from my analog life at Holly Hunt. So it's actually made me a much fuller. It's learning something completely new and different to me." [08:49]

4. Benchmade Modern’s Business Model and Customization Process

Benchmade Modern leverages a robust online platform allowing customers to fully customize their sofas. Orders are expedited by synchronizing production processes, enabling delivery within four weeks.

• Dan Campbell outlines the order process:

  "Once it's put in the system, it literally goes in the next day... everything is happening at once." [17:04]

This streamlined approach contrasts with competitors who often face extended lead times due to sequential manufacturing steps.

5. Digital Marketing Strategies and Enhanced ROAS

Dan emphasizes the critical role of effective digital marketing in Benchmade Modern’s success. Initially facing challenges with low Return on Ad Spend (ROAS), the company revamped its marketing strategy by collaborating with a new ad agency, resulting in ROAS improvements from 6-8 to as high as 15.

• Dan Campbell explains ROAS:

  "If I spend $100 and my ROAS is 8, I'm getting $800 in sales. If it's 12, I'm getting $1,200." [23:43]

He highlights the importance of creative assets and continuous optimization to maintain high advertising efficiency.

6. Balancing Trade and Direct-to-Consumer Markets

Benchmade Modern is expanding its reach into the trade sector, recognizing the importance of designers in driving sales. By employing dedicated representatives who understand both the product and the industry, they’ve increased trade business from 2% to 10%.

• Dan Campbell on trade growth:

  "When a designer starts using it and understands it, they're buying two sofas a month because they're like, this works, this is easy, it takes no time." [28:51]

7. Challenges in E-commerce Furniture: Freight and Logistics

One of the significant hurdles Benchmade Modern faces is managing freight costs. Despite offering flat-rate shipping, the escalating costs of delivering large furniture pieces require the company to absorb excess expenses to maintain competitive pricing.

• Dan Campbell discusses freight challenges:

  "We're consuming the excess freight because it is. It does cost way more than we charge." [35:32]

Dan underscores the complexity of ensuring reliable delivery while keeping costs manageable for consumers.

8. Emphasizing "Made in America" and Supply Chain Resilience

Benchmade Modern prides itself on its "Made in America" model, employing over 2,000 craftspeople and maintaining vertical integration to minimize reliance on external suppliers. This strategy not only supports local manufacturing but also mitigates risks associated with global supply chain disruptions.

• Dan Campbell on the American supply chain:

  "Everything is made here... we really try to work with as much as possible, all us, because we survey people that buy from us, and they care about it." [38:33]

9. Product Design Trends and Consumer Preferences

Dan observes shifting consumer preferences, noting a dramatic move away from gray towards warmer tones like tan, green, and unique hues such as "zinnia" (a rust-like color).

• Dan Campbell on color trends:

  "The sales we were seeing in every shade of gray has probably gone down 50%. And then every shade of tan has taken that up." [44:15]

He highlights the importance of adapting product offerings to align with evolving aesthetic preferences.

10. Strategic Partnerships and Branding

Benchmade Modern collaborates with lifestyle influencers like Eva Mori to create authentic, relatable branding. The partnership showcases how products integrate seamlessly into real-life settings, enhancing consumer trust and engagement.

• Dan Campbell on the Eva Collection:

  "She does a lot with the home, but she's also a mom and a wife, and she talks about how the furniture actually is part of her life... that authenticity resonates with people." [46:15]

11. Future Vision and Expansion Plans

Looking ahead, Dan envisions Benchmade Modern becoming a nationally recognized source for custom upholstery, with plans to establish physical showrooms in key markets like Dallas and Chicago to enhance customer experience and brand presence.

• Dan Campbell on future goals:

  "My goal or objective would be to become a truly known source for custom upholstery... having 10 to 15 locations would be a great way to help people understand what we do." [49:10]

12. Conclusion

Dan Campbell's leadership at Benchmade Modern exemplifies a harmonious blend of traditional industry expertise and innovative digital strategies. By prioritizing quality, embracing customization, and effectively navigating the challenges of e-commerce, Benchmade Modern is setting new standards in the DTC sofa market.

Notable Quotes:

• "Don't let best get in the way of better." – Dan Campbell [07:31]
• "It's the design that matters most to the consumer." – Dan Campbell [16:28]
• "You need both... be digitally savvy and have people who care." – Dan Campbell [32:11]
• "We're just pushing through our plans, and they've all worked." – Dan Campbell [42:30]

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This episode offers valuable insights into how traditional industry experience can be effectively leveraged within the modern DTC framework, providing a blueprint for success in the competitive world of interior design and furniture manufacturing.

Transcript

[Dennis Scully]

This is business of Home. I'm your host Dennis Scully. Every week I'll be speaking to leaders and innovators from all corners of the home industry. My guest this week is Dan Campbell, the president of Benchmade Modern. Like many direct to consumer companies, Benchmade Modern takes out ads on Instagram and sells its sofas online. But unlike most of its competitors, the company is out of a US Manufacturing group. Artisan Lane, the owner of Lee Industries and American Leather, Dan is also an unlikely D2C president. He's not a Silicon Valley entrepreneur, but a 17 year veteran of Holly Hunt. I spoke with Dan about how the lessons he learned from the trade apply to the direct to consumer world, why.

[Dan Campbell]

Gray sofas are over, and why consumers.

[Dennis Scully]

Care more about design than lead times. This podcast is sponsored by Ernesta, your destination for designer quality custom size rugs with a curated assortment of timeless colors, patterns and textures. Ernesta will deliver the right size rug in the style your client wants in only two to four weeks. And with Ernesta's exclusive trade membership benefits, you can get dedicated support, free unlimited samples and special discounts to help you achieve your clients design goals. To join Ernesta's Trade program, visit ernesta.com boh this podcast is also sponsored by Hickory Chair. Since 1911, Hickory Chair has been dedicated to blending the authenticity of classic craftsmanship with the precision of modern lean manufacturing in their Hickory, North Carolina workroom. Over the years its collections have grown to include timeless designs, both modern and classic, drawn from iconic periods and places and brought to life by renowned designers like Suzanne Castler, Ray Booth, David Phoenix, Susan Hable, Kim Skodrow and Marriott Hymes Gomez. In partnership with interior designers, trade showrooms and high end boutique stores, Hickory Chair's master craftsmen create bespoke furniture that reflects the designer's vision and is celebrated for creating luxurious yet livable furniture designed to stand the test of time. Visit Hickorychair.com to learn more. And now on with the show.

[Dan Campbell]

I want to set this up by talking about because you were reminding me recently that you not only worked for Holly Hunt, which is how I came to know you over the years, but also for the remarkable Sally Serkin Lewis back in the day, another hall of Fame inductee and a powerful force in our industry back in the day. Let's talk a little bit about your career path and how that came to be. You were reminding me that architecture was once the dream.

[Unknown Speaker]

Yes, yes. Dennis went to architecture school and had all these big dreams building, you know, all these things. And then in the real World. It was, you know, office renovations, bathroom stalls, and it was like 5% creative and 95% project management, which is, you know, not what I thought it would be. So I was working. My last role was at what's now tpg, the Philips Group in New York. And a friend of mine from Design Text was, you know, was probably complaining and she was like, oh, I'll get you a job at J. Robert Scott. And so she knew somebody there and literally that's all it was. And so I went over there and. But I learned a ton from Sally and just the way she thinks about things and her business and the quality I think it was, quality was really my biggest takeaway from her. Just the detail and the level of making things perfect and always striving for the best quality.

[Dan Campbell]

Well, and let's remind people what J. Robert Scott was. And I mean, I was reading up since speaking to you first. I was reading up and reminded that she was the first woman to open a Showroom back in 1972 on Melrose. And it was a big deal and she was, as I say, she was a force.

[Unknown Speaker]

Yeah, a forerunner. Yeah, Big, huge multi line showman originally with Jim Thompson and really brought all those brands to LA and then really narrowed her scope into her brand which, you know, at the moment was it. It was the top brand for quite a minute.

[Dan Campbell]

Well, and then, and so then how did you transition to ultimately work for Holly Hunt where you were for much of your career?

[Unknown Speaker]

So I went from Sally to Creation Bauman, which was a Swiss textile mill. I ran their US kind of distribution or partnership here with Carnegie, did the commercial side and then I was doing the residential side for them and which was another great experience though, learning, you know, literally in the mill, making, weaving, all of those things for an international company, which was great. And then Holly came knocking and I was like, I don't know. And then I really was like, I don't know. And she's, you know, it's this crazy, huge successful business and I was like, I'm not sure.

[Dan Campbell]

Well, so what was your impression at the time? So when you say, I don't know, what were you thinking? What was Holly Hunt to you?

[Unknown Speaker]

It was this great place, but it was always to me, I think at that point when I wasn't in it, it was really kind of set somewhere else within the industry in this space. And I think part of it was just change, you know, moving from one thing to another. And I was like, you know, I went out and met her and I mean, you know, her, but she's hysterical. Do you know what I mean? So we're like driving around the car, going to the showroom, going to the warehouse, getting gas. We literally pumping gas in her car on the interview. And, you know, and we went to like 10 locations in about five hours. She was great. She's really. She's just a really great person. And so I was like, oh, this is gonna be great. So that's when I jumped ship and moved over there. And I was there for 17 or 18 years. A long, long time.

[Dan Campbell]

Exactly. You were there for so much of your career. And I feel as though, and I don't know what you came in as originally, but you rose up over the years to really be one of Holly's.

[Dennis Scully]

Key right hand people.

[Unknown Speaker]

Yep. Yeah. I started as national sales for Great Plains. At the time, it was just the textile and leather collection. And then we grew that, and then it was furniture. And then, as you know, it changed, you know, years over time, and I just kept growing within the company. And it was fun because you kept my role, kept changing, the company, kept changing, our ownership changed. You know, like, all these things kept happening. Lee left, all these different things happen. But it keeps the job, you know, interesting because you're always doing some new project or new focus or something. So it was really fun.

[Dan Campbell]

Well, and as you say, I mean, and you and I talked about this recently, so funny enough, I just sat down with Holly at the New York School of Interior Design and had this wide ranging and typically all over the place conversation, as one does with Holly, which is part of the fun of it. But I wonder what really stuck out for you that you feel that you learned from the long time that you were with Holly and as I say, the ups and the downs with that organization and different corporate ownership and all of that.

[Unknown Speaker]

I think, Dennis, it is about getting it right and quality are the two things that I took away from her. And I think one of the expressions, which I think everybody knows is don't let best get in the way of better. And it's really a great phrase when you think about it. But, you know, she really looked at everything like that. You know, as I said, the piece of furniture, it's good, but can we change it by a quarter inch? Can we increase the thickness of the foam? What can we do to make it better? And that really was that strive and passion, I think, to get everything right and never chance out, never cheap out. It was like, whether it's the wine, which, you know, she had the best wine, or it had to be the best wood or the best leather. And it really was like all and everything else would follow is what she would say. Do you know what I mean? If you make great product with good quality, good design, sales will follow, the brand will follow all of those things. But having the product be the kind of core of the idea or the business and the other things will fall into place.

[Dan Campbell]

In wrapping up your time at Holly Hunt because you, you transitioned to the company that you're at now, were you just feeling like you wanted a new challenge? What was going on for you? Because I know it couldn't have been easy to step away.

[Unknown Speaker]

Yeah, I think there was a lot of changes going on that was post kind of new ownership coming in with her. Miller and I had met Brian, who's the CEO of where I am now at Artisan Lane. He was in York and we were developing the Holly Hunt walls collection. And so I got to know Brian very well from York for three to four years and he had moved over to Artisan Lane where he is now, and had reached out. I think it also was a point where I've been there so long, if I don't do something different, is it just a forever thing? And so I'm excited about the change for me and it's helped me learn so much about because what I'm doing now is this digital e commerce world, which is really different from my analog life at Holly Hunt. So it's actually made me a much fuller. It's learning something completely new and different to me. And it's been a great challenge. In the end, it was the right thing.

[Dan Campbell]

So let's explain what Benchmade Modern is. And a little bit, as you were suggesting, the parent company relationship and all of that.

[Unknown Speaker]

So Benchmade Modern is upholstery focused. So we do custom upholstery and it's online e commerce for both direct to consumer or the trade. And what we've done is created a process where you can customize your piece, whether it's, you know, every five inches or to the inch, the fill the finish on the wood com or you know, our textiles or leather. But the big changes, it's. We can produce it in two weeks, delivered in four weeks, you know, made in three weeks or four weeks, which is weeks, not months, you know, and that's I think, coming from where I was, you know, it's. It's all the back and forth from paperwork to signings to lead times approvals. And for a consumer or trade, you can just simply go on the website, look at the product, pick your fabric, see the product in your rendering, pick your wood finish, hit, boom, boom, Your freight's done, your ECD is done, it ships well.

[Dan Campbell]

And I want to talk about some of the specifics of that. But so you come into this organization and if I recall, the parent company had bought Benchmade Modern. I want to say, was it 2019?

[Unknown Speaker]

2019, yes. So the larger company is. Is Artisan Lane now, which used to be American Leather Holding. So it's American Leather Lee Industries, Benchmade, and then Brookline, which is more hospitality focused. So there's four companies under it, but we're all separate companies that have our own DNA and work very independently. But at the same time, we all benefit from each other.

[Dan Campbell]

Well, so as you were just describing, this is a big transition for you coming into this, this digital world. Right. And we've talked so much recently about the many challenges that a lot of these online brands have been facing over the past few years. So a dramatic increase in advertising costs, these big shifts in how Google and other search engines are leading people to different brands or not. The algorithmic changes that have had such a huge impact. Right? Yeah. And you've had to really ramp up your skill set, I'm assuming, in digital marketing altogether. So tell me a little bit about that.

[Unknown Speaker]

Yeah. So, I mean, what I thought I knew coming in was I understood web and some things that I did at Holly Hunt, but then I realized very soon I was like, I don't know as much as I thought I knew at all. From email marketing to SMS to digital to Google to meta, all of the different platforms, all these things that I really wasn't as tuned into. The way you can go after a customer in their cycle of buying, get them excited about it, it's top of funnel and what information they need at this point, what activity to do the site, and then how you give them information based on what they were doing on the site. I have to say, it's fascinating.

[Dan Campbell]

Well, so your remarketing efforts are working very well because ever since you and I got off a call the other day, you have literally just been following me around my house and just presenting me ads for Benchmade Modern at every turn. I would open the refrigerator, there'd be an ad for Benchmade Modern. I'd get in the car, there'd be an ad for Benchmade Modern. I mean, so, I mean, that is. It is really interesting to learn how all of that works and to better understand. Have you found. I mean, obviously Instagram must be Your main driver. But you tell me Meta, which is.

[Unknown Speaker]

Instagram, Facebook is definitely probably the main driver for getting people interested, but it is also the magazines and the news. So New York Times, Wirecutter, Forbes, ARC Digest, all of them publishing articles, whether big or small. It's another way for people to find us email. And then the collaboration we did with Eva Mori is another great because it's her talking to her audience and different things like that. So it is definitely a little bit of a spider web. But Meta, Instagram and Facebook is definitely probably the main driver.

[Dan Campbell]

And it sounded as though. And then we'll talk more about Eva in a moment. And thank goodness I learned how to pronounce her name correctly because she's quite, she's quite adamant about making sure that you don't call her Eva. I mean, and I mean, then you shouldn't spell it Eva is. All I'm saying is if that's because it could be a right. I mean, if that's your big concern, I would just change it up. But anyway, that being said, I mean, I was excited when you went and made this transition and I wanted to give you time. And I think you've been there almost two years.

[Unknown Speaker]

Almost two years. Yep. March, it's two years.

[Dan Campbell]

So I'm curious a little bit about what I assume was a bit of an arc for you of both getting up to speed with the brand and what it was all about and the digital marketing skills that we've just discussed. But also it looked as though there was some repositioning, some rebranding. Sounds like you brought in a newer advertising agency. And so tell me some of the things that you, the changes that you've made since you got there.

[Unknown Speaker]

It really was a full reboot is how I would say. I mean, it was new logo, new brand, new color palette. My first hire was a furniture designer, so we came up with all new furniture designs or tweaking things. We had to get the scale correct and photo shoots, new ad agency adding renderings to sites so you can see the product in your fabric or leather. I mean, it was really honestly like, almost like a startup from. We had the foundation of the know how and the site functionality, but it was really redoing or fixing, adjusting, tweaking almost every aspect of it.

[Dan Campbell]

When you were thinking about the rebranding and the look and feel, were you thinking about your trade experience over all of those years and did you want it to feel more trade friendly or trade appropriate or. Tell me how you thought about it.

[Unknown Speaker]

I wanted it to Be, you know, move the brand up and trade friendly so they understand it. And so we did new trade pages and all those things, but also not going too far because it is still, you know, direct to consumer brand. So I wanted to make it very approachable at the same time so regular Joe could look at it and be like, I could have this in my space. You know, it would feel relatable to their home, but at the same time making it relatable to the trade for project use.

[Dan Campbell]

Have you learned what matters most to the consumer about this product?

[Unknown Speaker]

It's design. So we did a bunch of surveys with people who had bought and we thought, you know, it's going to be lead time, it's going to be certain things because that's, you know, no one can hit that lead time. All the surveys always come. It's design. They love this product or that product or the look of it. And that's, at the end of the day, I think it is what people want. They want something that they like. It's beautiful and they like the look of it.

[Dan Campbell]

So that's what resonated the most. And we should talk, since you mentioned this lead time, which people are going to say, wait, what, two to four weeks? That's impossible. How can that be?

[Dennis Scully]

What does that mean?

[Dan Campbell]

So take us through an order process.

[Unknown Speaker]

So one is, it's all online, but once it's put in the system, it literally goes in the next day, we believe 24 hours. If there's any changes, otherwise, it's right into production. And I think, Dennis, the big difference for us than a lot of other makers is a lot of makers go, one plus one plus one plus one. You know, this takes one week, this takes two weeks. This week, this. And we're doing everything at once. So this group is cutting foam. These guys are building the frames, these guys are cutting fabric, These people are sewing the fabric. All of those things are happening at the same time, and then they're coming together to get put together, but everything is happening at once.

[Dan Campbell]

Well, that's what I was curious about.

[Dennis Scully]

Because having worked in the custom upholstery.

[Dan Campbell]

Industry myself, I am, I'm more than a little bit familiar with the, with the components challenge in all of it. And I worked for a very established company that didn't make its own frames, for example, for the most part. Right, so are you suggesting that you're. You're both making your own frames and your fill and all of that because you have multiple places that are making pieces? Correct.

[Unknown Speaker]

But everything is done in House at both. I mean, in two locations, but under one roof, if that makes sense. And it's still all hand. We do have great technologies from laser cutting leathers and all these types of things, but it's the care of quality in someone's eyes. And hands are on every single part of the process.

[Dennis Scully]

We're taking a quick break to remind you that you can discover Hickory Chair at a trade showroom near you or explore its website to find inspiring collections, fabrics, finishes, and a wide range of customization options for crafting bespoke upholstery and wood pieces for your home. If you're attending High Point Market this spring, stop by their stunning showroom at 200 North Hamilton, Experience Ray Booth's new collection, unwind in the design center and enjoy a cup of espresso, a cocktail, a free lunch, and Hickory Chair's signature hospitality. For more inspiration, visit Hickorychair.com or follow along on Instagram @hickorychair. And now back to the show.

[Dan Campbell]

And the customization. So what is interesting is the ease with which you can just slide a unit on a website and go from 65 inches to 100 inches, right. And then just knock off some other custom components of it. So tell me a little bit about what you're finding. People mostly do when they order a custom piece.

[Unknown Speaker]

I think what's really cool for the direct to consumer piece of it is they're getting a one of a kind piece for their home that fits their home, their lifestyle, whether, you know, whether they have kids or they're, you know, it's a country house or whatever it is, but it's the exact size they need. So we can do, you know, a sectional that's 105 by 150 and then picking the fill. So we do foam or trillium, which is a, like a synthetic down. So kind of how do you want the sit, you know, what finish do you want the legs? We offer it maybe extra deep, standard depth. But so based on if you're a 6 foot 5 guy, and so you want an extra deep sofa and you have dogs and cats, you do get a performance fabric and you want it a little more cushy. Let's go with the synthetic down. But it's all of those things and then you really can create something one of a kind for you, your body, your lifestyle, and aesthetically for your house. I think that's, for me, kind of the cool thing that you can't do at a lot of places.

[Dan Campbell]

A lot has been written over the past few years about Direct to consumer in general, how much it has changed. The founder of Bonobos is often out there explaining, I could never do what I did to build my brand originally today, just because the cost is so dramatically higher, but also it's just much noisier. And when you go on some of these platforms, there's just a lot of. There's a lot competing for your attention. So what have the companies that you work with advised you is the way into this? What have you found to be successful? Because a lot of companies are trying to figure out their digital marketing strategy.

[Unknown Speaker]

A lot of it, I think, has to do with, again, maybe this is me, is the assets or the ad creative. What is going to catch someone's attention? What's going to draw them in? And I think it does go back to product and it's beautiful. And again, that's kind of the way I approach this whole thing, was looking at product design and quality in those things as opposed to some of that more true digital thing. And I think one of the reasons they're struggling or why there is a lot of struggle when somebody came out with something 10 years when this was all kind of new, is there wasn't enough meat on the bones as far as the product goes. They could figure out the digital marketing piece ten years ago, but the product didn't resonate as well. So it's harder and harder to get in front of someone with mediocre product, I think. So for me, it's the assets, the creative just it gets in front of them and then really looking at what works, amping it up and what's not working on a really constant basis, like moving from where you're putting an ad to how is it going out to what's it look like and using that data to just continually improve. If something's working, mirror it, keep going forward with it. If something's not working, pull it out.

[Dan Campbell]

The other component in all of that is how digital brands often think about their marketing budget. In the beginning, it's like you just have to throw everything you possibly can at that marketing budget to get any kind of scale, to get any kind of recognition. Yeah. So where are you in that cycle? Are you still in a stage where you're investing a very high percentage of your overall revenue into advertising and marketing because you're still trying to build brand recognition?

[Unknown Speaker]

So I think we've figured it out.

[Dan Campbell]

Pull out the P and L. Dan, let's break this down. Tell me.

[Unknown Speaker]

I think what's happened. When I first started, we were working with One ad agency and Roas, which is return on ad spend, we were getting probably a six or seven, maybe an eight, which wasn't, it's still okay, but it was, you know, we were spending to your point, a lot more, but not as efficiently. And we moved to our new ad agency last spring and our efficiency has shot up. Now we're getting 12, 13, even 15 ROAS, both in Google and at times.

[Dan Campbell]

During and explain to people exactly what that means so that they understand.

[Unknown Speaker]

So Roas is return on ad spend. So if I spend, you know, $100 and my ROAS is 8, I'm getting $800 in sales. If it's 12, I'm getting $1,200. So for me, when we start seeing it from switching to the new ad agency with new creative with better assets, to be going from this literally sometimes six roas, if not worse, into the teens. That's for me showing it's working, the efficiency of the spend. And then the other piece of it is at those numbers, you know, at 14, 15, 13, it's too high. Meaning you're leaving sales on the table.

[Dan Campbell]

Well, so, so what do you do about that? So you get this number back and you go, wow, this is really. So what should we be doing?

[Unknown Speaker]

Right? And we're looking at it like daily, you know, I mean we're looking at that. That's one of our big measurements. And so it's figuring out other audience areas to go into. It could be a different platform, whether it's Pinterest, whether it's something else, where LinkedIn, you know, where are we not spending to capture a different audience or do you spend deeper in Meta or Google, depending on what the time is to get more out of it.

[Dan Campbell]

So the other big challenge that so many direct to consumer brands talk to us about is boy, without having some kind of physical presence, it's really hard. And some choose to create pop up partnerships as a way of showing up in physical spaces. Some take spaces in some key markets. Once they have the wherewithal, what in your mind would make sense? And how much of a challenge do you feel it is for you not having a physical presence?

[Unknown Speaker]

It's definitely still a challenge because it's the number one reason people aren't going to buy. Because a lot of people just want to sit in the sofa. They want to, they want to buy. So we do everything we can to help them, whether it's print house, online design consultations, sending real fabrics long term for us though, I do think opening stores in key Markets, New York, Dallas, Louisiana. Whatever the spots are to help people come sit and feel. And I also think bigger picture for the brand, it helps solidify it, too, for everyone, for the whole country just to know, okay, we have physical locations and. And I can come sit in it and understand what it feels like.

[Dan Campbell]

So is that something that's in the works?

[Unknown Speaker]

It is. We're looking at it. We're looking at. Actively doing something in Dallas would be the first location, and it could be as soon as this year, if not early next year is where we're kind of looking for it.

[Dan Campbell]

So some companies have told me that if I price it too low, people don't believe the quality level, because I noticed in Wirecutter, they said, listen, it's not the least expensive option, but it's a quality option. And I wonder how you all have thought about that.

[Unknown Speaker]

So partially for the pricing is what it costs to make the sofa again here in the US it is what we're, you know, we don't have the luxury of pricing anything lower than where we are just because we're using, you know, top materials, top quality, and it's all us made. I do agree, though. I mean, I think, to be honest, again, coming from where I am, I think we could be higher, but I'd.

[Dan Campbell]

Like these sofas to be a lot more expensive, based on my experience.

[Unknown Speaker]

10,000 sounds good. No, but for the American consumer, our price point is kind of higher but not crazy. Do you know what I mean? We're on the higher side of things, but for something that's the quality we're producing and the customization that we're providing, I think it's an incredible value. And for the trade, it's. It's a great entry price point for them.

[Dan Campbell]

Well, so tell me how you're thinking about the trade, and tell me, because obviously, with your background and experience, one assumes that that's a market that you're eager to go after. I know it's not a huge percentage of your. Of your overall mix at the moment, but it. But it sounds like it's growing and you're. And you're putting some pieces in place. So tell me how you're thinking about it.

[Unknown Speaker]

So they're going out to the designers and talking about the brand, and, you know, they have. Whether one rep carries pollock or one rep carries Casaman. So they're out there, you know, showing textiles for the most part, but they have great relationships with the designers. And so the way I looked at it was that they really are our brand. Representatives, they've been to the factory, they've sat in the product, they've seen the stitching. Because we don't have the showrooms, they can go and tell the designer the quality's there, the stitching's there. I have confidence in it's going to be great for you. That's kind of the rep's role in promoting the product. And so we've been building trade over this last year and it's grown. I think it's up. It wasn't huge, but it's up I think 170% and it's now about 10% of our business and before was 2% or something like that. So it was kind of non existent. And what we see is when a designer starts using it and understands it, they're buying two sofas a month because they're like, this works, this is easy, it takes no time. And they're happy with the quality.

[Dan Campbell]

Well, right. And that's partially what I'm curious about. It was always a challenge to try and figure out how to get the product in designers hands, how to get them to take that first leap. And sometimes you wondered, should I just make this person a sofa so that they can just see it and have it? And you know, I mean, because, I mean in the fabric world that's what we would just hear like here, take some fabric, go use it. But it's a little bit more challenging with a custom sofa to say, let me gift you a sectional. But how have you been able to do is that?

[Unknown Speaker]

Because without seeing it online, I mean the designer's putting their name on the line to specify something, they've never physically sat in or never physically seen it. So I get there's, that there's a risk there. So I think by going back to the reps, I do think it's, you know, the designers trust their reps for the most, you know, they, if they're working with them, they trust them and they know they have, you know, the wherewithal to kind of guide them in the right direction. It takes time though. We're newer to them so it's not going to be, you know, your first purchase is going to be instant. It's going to take time to warm up to the brand, learn about it and then, and then hopefully, you know, take that first leap.

[Dan Campbell]

And do you go out on sales calls? Do you travel around at all?

[Unknown Speaker]

I have not done.

[Dan Campbell]

Do you say, hi, I'm Dan Campbell, you might remember me from Holly Hun. Hello. You know, do you try and Use the halo of your vast industry experience.

[Unknown Speaker]

I have not done that yet.

[Dan Campbell]

Okay.

[Unknown Speaker]

Maybe I should be.

[Dan Campbell]

I feel like that's an opportunity.

[Unknown Speaker]

It could be. We're opening. Our Chicago rep is opening in a showroom, so we're going to put product in her space, which would be like a thousand square foot, little benchmade showroom in Chicago. So that'll be getting the physical product out there. But I think the reps also, I mean, to be honest, I think that's what's helped them sign up. Knowing I'm here and other people who understand the trade business are on our team, and so they know it's real. Do you know what I mean? It's not just some. What are these guys doing? Because a lot of them have worked with me in the past too, to be honest. Either I knew them or somebody knew them. So they know it's not some cockamamie thing. It's real.

[Dan Campbell]

Well, I mean, that often, truthfully, that was often the challenge was understanding the background or experience of so many of these online companies that first came along. Hey, where'd you come from? Who are you? But I would. All joking aside, I would assume that the reps would find great comfort in the fact that you've been in the industry for a long time. Sounds like a lot of the people around you have as well. And I'm curious along with that. We're always waiting for this tipping point where designers start to meaningfully use online tools. So lots of fabric companies have all sorts of things you can do on their website, but they will tell you more often than not, most designers still don't. They still call. They love our customer service people. They feel comforted by talking to a human. And so they still. They might place a reserve online, but they're certainly not going all the way through an order process. What say you, Dan Campbell, to all that?

[Unknown Speaker]

I think you're 100% right. I mean, fabric specifically off topic slightly, but, like, you have to feel and touch. When you go to the showroom and you look at the wings and, you know, I think that's it. You have to shop that way. I think for us, though, a lot of the designers still, like, we have two customer service people that work with the trade and it's relationships. Like, they want to talk to Star, they want to talk to Lauren, and they go back to the person they work with, and it's that repeat business. So it is still whether our process is very digital and they use it, but they still a lot of times want to talk to someone on our team, confirm stuff, ask the questions, can we do it a different way? I think you need both. You need to be able to be digitally savvy. Your website's working amazing, but also you have people there that care and understand the business.

[Dan Campbell]

What I was surprised about when I worked for an online sofa brand during COVID was how many designers were intimidated by the customization process and how many of them hadn't gone through that. And so we were almost presenting them with too many options or they wanted more guidance. And so I was struck by that. When you tell someone, oh no, you can do whatever you want, send me a drawing, we can make it. And that was almost sort of overwhelming to some of them. And I'm wondering what your experience with that has been.

[Unknown Speaker]

I think for both the trade and consumer, too much is too much. Because there's a woman on my team who runs the site and has most of her experiences in the interiors business. We're looking at, oh, can we do this, can we do that? She's like, no, it's too many options. You can't have them make this many decisions. Just one or two decisions at each stage is all that anyone can handle and you just overwhelm them and then they shut down. It's almost like I try to make easy custom. It's not the minutia custom. It's like because you can really pick from these things and get to a relatively custom spot without having to go too far down that hole, right? And it's literally like you click the button and you're getting delivery notifications, you're getting updated on the order. You don't have to reach out. There's no question about is it going to be late, Is it going to be this? How much is the new freight going to cost? It just, it's done.

[Dennis Scully]

We're taking a quick break from the show to remind you about Ernesta. Ernesta's designer quality custom size rugs are the foundation to an elevated space. Help your clients transform their homes by joining Ernesta's trade program. As a member of the Ernesta trade program, you'll get preferred pricing, free unlimited 12x12 samples and dedicated services such as a personal account manager and a trade only website. To learn more about joining this exclusive program, head to ernesta.com boh that's ernesta.com boh and now back to the show.

[Dan Campbell]

And tell me about the freight because that's been one of the biggest challenges in the industry is just the crazy ever escalating costs and Challenges.

[Unknown Speaker]

It's tough. I mean, we do a flat rate shipping right now. So it's just, you know, there's white glove or threshold that they pay for it's. And we're consuming the excess freight because it is. It does cost way more than we charge. It just. It's crazy. And it's a tough part of the business, you know, to get reliable good people. We work with a great company and we tested one out this year and they ended up going bankrupt. So it was like this whole hullabaloo. We just tested a couple markets and we thought it was going to be good. And it's just tough. And they had better rates, but I think in the end it didn't work. The consumer doesn't want to pay what it actually costs to have that piece delivered. So we can charge a certain amount and then we have to cover the rest of it.

[Dan Campbell]

No, no. Which is very tough. And I've spoken to so many companies who curse Amazon or some of these other online companies that act like free shipping and it doesn't cost anything. And meanwhile, you're delivering a big, giant, hulking sofa. Of course, it costs a lot of money to take it across the country and then bring it into your house and position it in your.

[Unknown Speaker]

Put the legs on. We'll ship without the legs and we ship with dummy legs sometimes. So it's like. Yeah, you need somebody who knows what they're doing to do that.

[Dan Campbell]

Yeah, no, no. It's a great big challenge. Okay. Earlier you mentioned one of the advantages that you have is that you've got this made in America model. So, Dan, you and I are talking on the Monday morning after we have just learned of the new tariffs being put in place. 25% on Canada, 25% on Mexico. Allies? What allies? We have no allies in the tariff wars. Are you kidding me? So I'm fascinated to see how this is all going to play out. I was in touch with various furniture makers over the weekend who have been working feverishly to try and change their supply chains and have been trying to get production out of China already, obviously for quite some time.

[Unknown Speaker]

Yeah.

[Dan Campbell]

But let's talk about how you're thinking about it and let's. And help me understand this supposedly American supply chain that you have. And are you feeling pretty. Pretty good about the fact that most of your components are in America?

[Unknown Speaker]

Yeah, I mean, everything is made here. And to me, while it's still unnerving, the whole thing, because I don't know what's going to do to the overall Economy and everything. But I think we are positioned in a very good spot with our American made situation because it really is very, very small. If we have something coming in from somewhere else, it's a very small percentage of what we do. So for me, for our business, I feel pretty good about where we are with all this chaos going around us.

[Dan Campbell]

And is this a conscious decision on your part, your parent company's part? Is this an important part of your messaging, this made in America, and does it resonate with people?

[Unknown Speaker]

It's 100% part of the company's DNA. The bigger company and our company, we want to be American made. We employ. I always get the number, but it's literally over. I think it's like 2000 craftspeople in the US making our furniture in the different places that we make it. And again, because we're essentially vertically integrated, it's all American made. You know what I mean? Again, we're not bringing frames in from somewhere else. We're not doing this. And we work with a lot of American vendors. Outside of that, whether wood frames are being made for a finished chair in upstate New York or legs in California, we really try to work with as much as possible, all us, because we survey people that buy from us. And I wouldn't say it's top, but it's in there. Do you know what I mean? They care about it, but I don't know if it's the tipping point for certain people. I think for some people it is. And I think for me, sometimes, especially when buying upholstery and things, you know, if it's coming from China, I'm always questioning, like, what's really in there? Do you know? What's the foam from? Does it smell? You know, all those things that you're just kind of like a little freaked out about. But, you know, when you're buying an American piece of furniture, like, all of that is. Is good. You know, there's. That. That whole kind of freakiness is. Is vanished, if that makes sense.

[Dan Campbell]

So we don't have to off gas. You don't have to leave your sofa outside for a few days and let it.

[Unknown Speaker]

Okay, yeah, sprinkle it with baking soda. No, it's. There's like a safety component almost in my head about it, because, a, there's all the regulations that we're working with within the US but it's also the care for quality that's potentially different than somewhere overseas.

[Dan Campbell]

So tell me then, I'm curious. So you come from this trade world now you've Been overseeing this direct to consumer brand, obviously trying to grow the trade side of it as well. But it's still largely a direct to consumer brand. I'm curious, what has been the most challenging aspect of that for you or how have you had to think differently than you might have in the past? And I guess in all of the things that we've outlined, what's the biggest challenge for this brand right now?

[Unknown Speaker]

I think the answer, the first part is it really was just really having a full, deep understanding of e commerce digital world to really be able to then take all the things I knew and then transfer them over to this space, which it's different. The way people see things is different. And I think that was kind of the biggest challenge. At the same time, I think all of the knowledge I had, whether it's just basic good understanding of the furniture business, how to sell furniture, how to make furniture, what quality looks like, what good design looks like, marketing, all those things that I knew translated really easily over to this because as I said, I think that's where a lot of the DTC competition doesn't have that skill set. They're coming out because they have an MBA from Wharton, they think they can sell furniture, but you have to love furniture in a sense and love the design business and love it to create something that I think is special or different as opposed to just making XYZ somewhere and hire, I don't know. And as I said, we're, you know, a newer, scrappy team. So it's just kind of continuing, I think, to expand on all that, you know, more photo shoots, more product, more of all the things that are working. I don't know if it's a challenge. It's just, you know, continuing to move forward with those same ideas.

[Dan Campbell]

Well, so as we were talking earlier, I mean, if you actually were a startup company.

[Unknown Speaker]

Yes.

[Dan Campbell]

And if you had received some venture capital money, in order to get more of it, you'd need to hit certain metrics, you'd need to show a growth trajectory. And is that in fact what you have to do with your parent company? Does Brian have to see you doubling business over a period of time to say, okay, I'll give you more marketing dollars so you can bother Dennis some more with your digital rebrand?

[Unknown Speaker]

So, I mean, the good news is that we're profitable. And I think that's the difference between a lot of direct consumer brand is they're always chasing funding and then they're not getting it. And I think that creates also a problem for how you run a business. If you're. You know what I mean? If you're constantly kind of trying to figure out where your next funding is coming from, that takes up so much of your time and doing the dance with the numbers. So the good thing is we are profitable and we're in an organization that's doing great. So, no, it's just. I mean, transparently, we just make our plans for the year and things are approved, and then we just run with it. And that's one of the great things about. We're just pushing through what. And all the plans have worked, which is the nice thing for me, in a sense. We said we're going to do these XYZ 10 things. We've completed them, and they're all showing growth, which I think just gives more confidence to all the powers that be that when you say you're going to do something, you do it and it's successful, then what else can we do?

[Dan Campbell]

So from that perspective, then, Dan, as we wrap up, do you have anything to tell me about what consumers are looking for in fabrics and upholstery? And, I mean, what's the big seller? Please don't say ivory boucle, Dan.

[Unknown Speaker]

I'm not gonna say that, and I wouldn't say that. So I'll give you some of the surprise. I wish I had the fabrics here with me. So some of the surprising things, we have this raisin color. It's like a brown purple, and it's been crushing it. And I literally was like, I didn't see that coming. You know what I mean? And it's more purple than brown. That one is a surprise, I think. Green in every shade, you know what I mean? From. We sell some really true green. Fern really is way on the top of the list. And then, you know, more subtle greens do really well. And neutral still kind of, you know, are crushing it.

[Dan Campbell]

But sure, they rule the world after all.

[Unknown Speaker]

They do. The tan. Mr. Tan. Gray is gone. You know, I mean, the switch.

[Dan Campbell]

Gray is gone.

[Unknown Speaker]

Gray is gone. The switch from gray to tan, even in, you know, less than two years I've been here, has been dramatic. So this. The sales we were seeing in every shade of gray has probably gone down 50%. And then every shade of tan has taken that up. And then this other rusty color has also become really. We call it zinnia, but it's really like a rust, I would say, like it's also flying. So those are the kind of colors I've seen like this. And what I'm adding, we're adding a bunch to the collection. It's trying to fill that. I'm calling it Sedona, you know, kind of that softer rust feeling and moving in there and then more olives, I think. So that's the kind of color stories.

[Dennis Scully]

In all of your years in the.

[Dan Campbell]

Business, Dan, have you ever been able to. Did you ever have any wonderful advisors who could tell you what color preference changes meant? We often talked about, oh, people are feeling more emboldened and using more color, and so they're more optimistic about the economy. But were we deluding ourself about that having any meaning, meaningful significance? I mean, I've never.

[Unknown Speaker]

No, I think what it is, people get bored. Do you know what I mean? And it's like, I mean, it was gray for.

[Dan Campbell]

It was a long time.

[Unknown Speaker]

It was 10 years, I think more. And so it's like switching back to cream is people get tired of it and people want new. I will say I think color is stronger right now than it has been, but I don't know why. I don't know if it's just because people are going to get. Get bored of something. And I do see we're trying to do a little. We're going to do a little partnership with Kravit as well. So I don't know if that's. If I can say that publicly yet, though. But it's.

[Dan Campbell]

Well, you just did, Dan.

[Unknown Speaker]

I mean, it's a. I mean, so I think we can, but because we're trying to embed a little bit more traditional, you know, not, you know, crazy birds or anything like that, but just a little bit more color, a little bit more pattern. Because I do feel like traditional is definitely, you know, it's here, but I think it's only getting stronger as opposed to having both modern transition, a little bit of traditional fabric.

[Dan Campbell]

Okay, well, so that's interesting. And I mean, we'll talk more about the Kravit partnership perhaps in the future, if in fact we're allowed to talk about that. But since we mentioned that and we mentioned Eva Mori earlier in the conversation, we should explain who that is for listeners. And you tell me how that came to be your partnership with. With Susan Sarandon's daughter.

[Unknown Speaker]

Yes, yes, that's exactly who she is. So Eva had a piece from us, our skinny fat sofa, and she got it in a performance fabric and just was in love with it. And she had reached out saying, I love your product. Well, can we do something together? So we started talking to her and we came up with the Eva Collection. But what I like about Eva is it's a lifestyle brand, so she does a lot with the home, but she's also a mom and a wife, and she talks about all of those things openly and how the furniture actually is part of her life, as opposed to a designer just saying, oh, this is pretty. Do you know what I'm saying? This is how it functions in my media room. This is the bench in front of my window. This is if I spill coffee on it. And I think for the consumer, that's a big win, because I think when they see that authenticity, that's what resonates with people.

[Dan Campbell]

So did it make you want to do more of that? To your point, do you believe in the power of the designer, licensing partnerships, and do you feel that that's a necessary component?

[Unknown Speaker]

Like, I want to say it could work with a designer, but at the same time, every time I think about a new, like a real, you know, I mean, an interior designer, they all have so many things going on, and I don't really see how they could, you know, a lot of times really get behind or partner with a brand. And so I think, for me is what I would look for is, yeah, somebody who's really engaged in us, and it's not just a commercial exchange, if that makes sense, but somebody that's actually like, this is a great. What you're doing is great, and I'm behind it, and let's work together and obviously support each other financially and all that. But I think this experience with Eva has been great. And, yeah, we could do other ones if the right fit happens.

[Dan Campbell]

So as we wrap up, tell me when you think about where this can possibly go. We often talk about the total addressable market or, I mean, right. Do you. Do you have the tam up on the wall there, Dan? Do you. Do you think about. Do you think about it in those terms? I mean, do you. Blue sky. Let me use some other terms.

[Unknown Speaker]

Do you.

[Dan Campbell]

Blue Sky. Vision out. Okay, if this really works, in five years, we're going to have 10 locations in key markets, and that will show that this has really been successful.

[Unknown Speaker]

My goal or objective would be to become a truly known source for custom upholstery. Do you know what I mean? So if you ask your friend, like, hey, Joe, I'm looking for a sofa, and they're like, Benchmade makes really amazing quality custom product. You know what I mean? So it really starts to create headspace for people that. That's what we do. And I think having 10 to 15 locations would be a great way to help people understand what we do, but that's my goal, is that if we can really become a custom upholstery company that is recognized for doing that on a national level.

[Dan Campbell]

Dan, thank you so much for your time. It's been great to catch up and I'm excited that you're in this good place.

[Unknown Speaker]

Thank you so much, Dennis. It's been great catching up with you too.

[Dennis Scully]

Thanks for listening. If you'd like to keep up with.

[Dan Campbell]

The latest design industry news, visit us [e-mail] where you can sign up for our newsletter, browse job listings and join our BOH Insider community for access to online workshops, a free print subscription, and much more.

[Dennis Scully]

If you have a note for the.

[Dan Campbell]

Podcast, drop us a [e-mail] if you're enjoying these conversations, please leave us a.

[Dennis Scully]

Review on Apple Podcasts.

[Dan Campbell]

It helps others to discover the show. This show was produced by Fred Nicholaus and edited by Michael Castaneda.

[Dennis Scully]

I'm Dennis Scully.

[Dan Campbell]

Thanks again for listening and I'll see you next week.