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Chalkfly takes on office supply giants on the web
The startup, founded by Google and IBM alums, also donates to teachers.
Associate Director of Research
Topics: Andrew Landau, Bizdom, Chalkfly, Dell, Detroit Venture Partners, e-commerce investment, Google, Griffon Ventures, IBM, Ludlow Ventures, NewsMakers, Office Depot, office supplies, Ryan Landau, schools, social media, Staples, Start Garden, teachers, Top 500, web-only retailers
Since the advent of e-commerce, online office supply giants like Staples Inc., Office Depot Inc. and Dell Inc. have dominated the web. They have held down Top 10 spots in the Internet Retailer Top 500 Guide since the first edition in 2004 and, in the case of Staples, now bringing in 43% of total sales on the web.
But eight months ago, brothers Andrew and Ryan Landau quit their jobs at Google Inc. and IBM Corp., respectively, to launch the web-only Chalkfly.com because they thought there was room for one more office supplies e-retailer. At least a few investors agree. The merchant, which sells office and school supplies and gives a portion of sales back to teachers, just received $750,000 in new capital and expects to bring in $2 million in sales this year.
“People usually don’t get that excited about office supplies, but it is a $30 billion dollar industry that craves innovation,” says co-founder Andrew Landau. “My brother and I decided that we could not only make a difference, but completely change the experience of purchasing office supplies online by bringing innovation to a space that has had no disruption in the past 30 years.”
With each sale, Chalkfly donates 5% of the proceeds to a teacher of the customer’s choice, in the form of a credit the teacher can use to purchase classroom supplies at Chalkfly.com. Teachers can sign up to be included among those who receive donations, and also complete an online registry. If a customer does not designate a particular teacher when she completes her purchase, Chalkfly will award the donation to a teacher in the vicinity of that customer. The idea is to directly help teachers with the cost of classroom supplies, which teachers often pay for out of their own pockets, he says.
The merchant is also using its low overhead as a web-only retailer to its advantage by investing in customer service. Chalkfly offers free overnight shipping on its 50,000 products, 365-day returns, and live customer service agents 24 hours a day, seven days a week. “We don’t have the 15 stores or 70,000 employees that the big guys do,” Andrew Landau says. “That has allowed us to invest more in the customer experience.”
Chalkfly, which has five full-time employees, fulfills all orders from its headquarters in Detroit. It has shunned the idea of drop shipping products for fear it wouldn’t have enough control over the customer experience, he says.
Unlike some of its larger online competitors whose home pages have several scrolling images and many detailed navigation options, Chalkfly’s home page is uncluttered. The central image is of a young boy in glasses struggling to carry a giant book above a caption that reads, “5% of each purchase supports teachers in your community – start shopping now.” Category breakdowns for Write, Break Room, Technology and others are buttressed by hand-drawn images of pencils, scissors and mugs. The site was built in-house on a Magento Inc. e-commerce platform, Andrew Landau says.
This business model is resonating with shoppers, he says, as sales are increasing each month, and around 1,000 teachers have signed up to receive donations—teachers who the e-retailer hopes will spread word of the site via word of mouth. “Rarely do people get excited or inspired to buy office supplies,” Landau says. “But people are buying supplies and writing about it on Facebook and saying how it’s exciting to be able to give back. We have hundreds of teachers that are kind of like brand ambassadors for us.” Chalkfly has attracted 779 Likes on Facebook and more than 1,400 followers on Twitter.
Detroit Venture Partners, Ludlow Ventures, Griffon Ventures, Start Garden and Bizdom led the funding round.
Staples is No. 2 in the Internet Retailer Top 500 Guide. Dell is No. 5 and Office Depot is No. 6.