If TJMaxx, eBay, and Craigslist had a baby, it would be Loveseat. Loveseat is an online auction-based marketplace where consumers can access local returned or overstock home goods at extremely affordable prices. With e-commerce penetration reaching ~14% of retail sales, returns have also skyrocketed—jumping from 10.6% of sales in 2020 to 16.6% of sales in 2021. Higher rates of returns result in increased costs for retailers, inconvenient consumer experiences, and burdened supply chains. This is especially acute in the home goods category where items are often large and expensive to ship or store, rendering returns and excess inventory particularly costly. Enter Loveseat.
Loveseat aggregates the excess and returned inventory from home goods retailers and creates gamified auctions where consumers bid on items starting at $10. For consumers, Loveseat provides access to high quality inventory at Craigslist prices and a fun shopping experience. Consumers often come to Loveseat in search of a specific item but find themselves discovering unexpected deals and returning to Loveseat for its thousands of new listing “drops” each week. For retailers, Loveseat helps to boost margins by offloading inventory that is sitting in warehouses costing money.
Chris and Jenny Stanchak founded Loveseat with the goal of eliminating waste from the supply chain while creating a better shopping experience and unbeatable value proposition. Chris and Jenny bring impressive experience in the tech and e-commerce space. Chris previously founded TicketLeap, an online ticketing and event company, and Jenny was one of the first software engineers at Venmo. Upon meeting the duo in Austin, Loveseat’s newest and fastest growing market, we were immediately impressed with their entrepreneurial energy and focus on automating and scaling warehouse operations while delivering a delightful customer experience.
Loveseat exemplifies several of the conversion tactics outlined in our roadmap on distribution and conversion models for consumer startups, including but not limited to auctions, gamification, and scarcity. In Loveseat’s case, its auction model serves a dual purpose. In addition to driving customer engagement and conversion, the weekly auction process enables the company to turn inventory quickly. Loveseat sells through nearly all of its listings each week, a testament to the value proposition and consumer demand. This leads to attractive cash conversion cycles and helps mitigate inventory risks.
The company launched its first marketplaces in San Diego in 2020. Today, Loveseat operates in four regions across Southern California and Texas. Its local focus minimizes overhead costs and energy frequently associated with long-haul shipment deliveries. Don’t fret if you live outside of Loveseat’s current markets! Loveseat is actively expanding to new markets and may be coming to a city near you soon. Stay tuned.
We are thrilled to partner with the Loveseat team and work alongside angels including Gabriel Weinberg, Gokul Rajaram, and Kal Vepuri.
P.S. Loveseat is actively hiring for key leaders across operations, finance, growth, and product. Join the team!