Lettuce Launches Wholesale ServiceTuesday, October 1, 2013
Raad Mobrem and Frank Jones were running a dog-toy business when they got the idea for their current company.
Costa Mesa-based Dura Doggie was selling its brightly colored chew toys to boutique shops, national chains and online customers. But the small company couldn't find cheap software to process orders from the time the sale was made until the product was shipped.
So Dura Doggie created its own software, a product now called Lettuce. When Mobrem and Jones realized that Lettuce could be a standalone business, they moved to Los Angeles to focus on the software full time. Dura Doggie was later acquired.
Mobrem said Lettuce tapped into a common problem in the wholesale business. Most order management software is expensive and takes months to install, which means it's not ideal for small businesses like Dura Doggie.
"We were a successful small business but there was no way we could afford to pay $100,000 for a system," he said. "Lettuce was the secret sauce of what made us successful. We started getting emails and phone calls from other companies that were requesting it from us."
Lettuce is software-as-a-service that taps into a company's system to manage and automate all aspects of selling physical goods, including inventory, payment processing and fulfillment. A salesperson, for example, could use the Lettuce app to take orders when visiting clients.
The 15-person team behind Lettuce has spent the last year building up its software. Now the Venice company is expanding into the wholesale business.
Lettuce has been testing a system that allows wholesalers to automate sales with retail customers, a process that is typically still done with pen, paper and fax machine.
Mobrem said the wholesale component has helped increase sales for many of its customers.
"When you're on the digital format, it's kind of like you've got happy fingers and order a little more," he said. "The typical order size is increasing."
Lettuce typically works with businesses that have between $100,000 and $50 million in revenue. The company currently charges a monthly fee and ups the charge for additional users added to the system. The new wholesale service costs an extra $50 each month.
The company, which graduated from Santa Monica accelerator Launchpad last year, has raised $2.1 million in seed funding from local investors Crosscut Ventures, Double M Partners and Baroda Ventures. Other investors include Mountain View’s 500 Startups and New York's Zelkova Ventures.
Though Lettuce started as a side project, Mobrem said he is dedicated to continuing to build the business.
"We want to power the back end of commerce," he said. "There's a vast amount of data behind this commerce. There are so many different opportunities to use that data to make the lives of our customers much easier."