The Momotaro x Massdrop Mixup

One of Massdrop's potential jean drops

One of Massdrop’s potential jean drops

If you think vintage label Momotaro for $170.00 sounds too good to be true, you’re right. But that was almost the reality for almost 200 users of the group buy website, Massdrop, before Momotaro shut down the deal.

Massdrop is a young tech startup that organizes wholesale buys of a single product for a heavily discounted price. Massdrop has facilitated “drops” in mechanical keyboards, car parts, 3D printers, and most recently, raw denim.

Users create polls featuring a variety of products, the community then votes for their favorite item, and Massdrop contacts the vendor to arrange a wholesale deal. Massdrop posts the item with a week deadline to collect orders then places the order with the vendor, receives the goods in one large shipment, and distributes them to their users.

A recent raw denim poll on the site.

A recent raw denim poll on the site.

The winners of two recent “Raw Denim” polls were Momotaro 702s and Japan Blue 0401s. Massdrop contacted the Rampuya & Co. (the umbrella company for Momo and JB) and set a rate of $179.99 for the Momo’s and $110.00 for the JB’s–considerably below their MSRPs of $295 and $200, respectively. The postings garnered over 300 orders total and Massdrop sent them in.

One of Massdrop's sample photos for the Momotaro 702

One of Massdrop’s sample photos for the Momotaro 702

And here’s where things got tricky. Rampuya responded that they would still fulfill the JB orders, but that $179.99 was too low for Momotaro and they were canceling the offer. Massdrop wired money for the JB order and scrambled to salvage the Momotaro jeans but set a hard deadline for refunding their users’ money if they could not reach an agreement.

That deadline passed on February 21 and Massdrop issued a full refund plus a credit to any future purchases on the site. In the same time period, Japan Blue bounced back the money from Massdrop’s wire transfer and said it wouldn’t ship that order either, leaving several hundred potential customers denimless and disappointed.

We spoke with Momotaro General Manager Tatsushi Tabuchi who said that the issue stems from miscommunication. In an email he wrote,

They would sell our denim [at] the discount price without sufficient explanation to us. For example, 0702 was $170. It is too [much of a] discount. This price is at a price that was clearly wrong, we were not able to accept [it]. Be[ing] sold at a price too low will lower the brand value. Cause all thing were happened by what they sold without a sufficient explanation to us [sic].

Tabuchi believed they would be selling the denim wholesale to Massdrop but was unaware they would be offering that price to consumers as well, something that would hurt Momotaro‘s brand value as they are rarely offered on sale. When other American Momotaro retailers began to complain about the discounted price, Momotaro realized what was actually happening and backed out of the order as quickly as possible.

Tabuchi Tatsushi representing Momotaro at Capsule Man in January

Tabuchi Tatsushi representing Momotaro at Capsule Man in January

Massdrop founder and CEO, Steve El-Hage, agrees that communication was a big problem in the drop, specifically citing the barriers created by differences in language and location. El-Hage admits this was not only their first raw denim order but also their first with a Japanese company and they didn’t have a translator on staff or a complete understanding of Japanese business practices. So when things with the drop started looking shaky they tried to act quickly or lose credibility with their newfound raw denim customers.

“We tried to be as transparent and honest with our customers about what happened.” El-Hage explains, “The worst thing would have been to drag this on for months so we set a hard deadline for a refund after one week, and we unfortunately had to follow through on it.” To prevent issues like this from arising in the future, Massdrop now requires vendors to sign contracts before each sale is posted on the site and they will be using an intermediary agency for future deals with Japanese companies.

Despite the outcome, El-Hage says he still had a very positive experience with the raw denim community, “When we had to tell them about the canceled shipment, we thought they [the buyers in the drop] were going to rip us apart, but everyone’s been really supportive and understanding.” And it looks like Massdrop has no plan to leave raw denim anytime soon as they just finished two recent drops with American jeans makers, Rising Sun & Co. and Taylor Stitch.

El-Hage even said he’d be open for another deal with Momotaro, including the honoring the 702 drop. “At the end of the day,” he says, “I just want to get people their jeans.”

What do you think about how each company reacted in the Massdrop/Momotaro situation? Do you think buying wholesale from the manufacturer in drops like these is an attractive way to buy jeans? And what effects do you think this will have on raw denim retailers and manufacturers as a whole? Let us know in the comments below.

 

David Shuck

David is the Managing Editor of Rawr Denim. He currently resides in Denver, Colorado.

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  • DDavil

    It’s simple. If MOMO is selling jeans to a third party at wholesale prices, then what situation does it leave their vendors in? Vendors who have invested into building stores, websites, and are dedicated to selling their products? 200 pairs of jeans is a lot of money out of the pocket of BIG. That’s 200 pairs of selvedge that will potentially be sitting on their shelves until 2015 because costumers got them somewhere else half price. For Momotaro, it would be biting the hand that feeds you. It’s not in their interest to burn bridges with long time partners just to sell a few hundred pairs of jeans. After all, if they did it regularly, then the same shops that have supported them for years wouldn’t be in position to want to continue that support.

    For the above reason, I don’t think you will see any of the well known Japanese companies involved in something like this, because they don’t need to be involved in something like this. They are going to do okay because they already have an established fan base, and distribution channels. Some of the new, and small companies might like the idea to get their name out there, get denim on legs…build up fade pics ect. It’s really too bad for denim heads, but really its like the author said straight at the beginning of this article…its too good to be true getting Momotaro’s that cheap….they should have known better. Don’t underestimate the relationships some of these companies have built up over time.

  • MikeC

    Here’s a very simple solution: learn to speak English or Japanese or use a translator. I’m getting sick of people saying stuff gets “lost in translation”. This shouldn’t happen when your dealing with thousands of dollars.

    • DDavil

      I think sometimes things do get lost in translation. It only takes misunderstanding one word…even just misunderstand a prefix or a suffix of a word…and the whole conversation can change. Even with a translator, its possible to have misunderstandings. This is why so many of these companies like to meet face to face to iron out details so that everyone is on the same page.

      I don’t believe that’s the case this time. Im guessing once the Momotaro’s retailers in the states got wind of this wholesale deal, they immediately contacted Japan to ask what the heck was going on. Im also guessing that most of the 200 customers were American? Momo realizing their mistake (and not wanting to upset their established partners) had to back pedal and back-out of the deal. I don’t blame any of the parties. The denim heads lose out, but maybe they should have known better to begin with.

  • dgaf

    Rather shop and support local businesses who carry momotaro. Less hipsters for me to wear my favorite brand

    • dgaf

      A hipster is: a person who wears pants.

    • BillygoatsGruff312

      You want to give an extra $120 out of your own pocket to someone else, with no additional benefit to yourself, so you can “support local businesses”? That’s brilliant.

      • dgaf

        i got money to spend do you? clearly not peasant. Go back to your pin-roll hipster ways

        • BillygoatsGruff312

          Spend, yes. Waste, no.

        • Ced gee

          peasant, yeah ok “stan halen”..

        • hatejapoverpriceddenimnazis

          Total cunt here proly riding a yugo and prancing lije yezzus

        • Anthony Savoy

          Another limousine liberal

      • YAITW

        No additional benefit to yourself? What about cultivating a local denim scene? How about not being a cock and think about; employing people who are passionate about similar things to you, allowing store owners who are offering boutique brands you can’t readily find anywhere else to get a fair share of profits. Do you simply think all retailing should be done online? Do you have aspergers and want to totally eliminate face to face interactions with others?

    • whorebucks

      that’s the most hipster thing i’ve read.

  • BillygoatsGruff312

    This was a bitch move. I’m wearing a pair of momos now and planned to cop another. Not anymore. If you make a deal, you honor it. Reneging b/c there isn’t a high enough markup for your stupid American customers..after you agreed to a sale?

    Nomotaro for me.

    • 1of42

      Well that’s the thing: Momotaro says they didn’t agree to the specific terms of sale. Their quote suggests that they thought MassDrop was making a wholesale order and did not know that the wholesale price represented the final price that would be charged to consumers. If that’s correct (likely due to the langugage barrier) then it’s a classic situation where there was no meeting of the minds on this contract.

      Overall it seems very hard to blame Momotaro here.

      • BillygoatsGruff312

        I get it. And I do blame Momo. At the end of the day, they burned 200 people who wanted to buy their product. No matter how you chop this up, they look like assholes.

        • 1of42

          They burned 200 people who wanted to buy their product at wholesale prices. If those people weren’t willing to pay more, I cannot for the life of me see how Momotaro look like assholes for refusing to sell that far undercutting regular retail, to retail consumers. They thought they were selling wholesale; they didn’t understand what MassDrop is, which is unsurprising since it’s a novel concept. There’s nothing that makes them assholes for a miscommunication caused by a language barrier.

    • Amg

      I agree. That’s a shitty situation. I understand the issue of your suppliers in the US. But really? They do enough collaborations that they could do a Massdrop one just to appease people. And they could’ve communicated that and not pissed off their US distro. Oh, and I thought only Sony believed the “low prices and sales erode brand” thing. Most everyone in the states shops sales from time to time. Unless your constantly doing this, I don’t get the connection.

  • BillygoatsGruff312

    Great article David/Rawrdenim. The site keeps getting better and better.

  • mf051404

    Can somebody please ID the shoe in the topmost photo, the one that looks very distressed and worn with a black weft Momo, thank you.