In 2015, Brenden Marquardt was a Texas-based investment analyst. He met a farmer’s wife named Lori who made custom Murphy beds, ones that fold into a wall. Marquardt was looking for a side hustle, a part-time business to supplement his day job.
Describing Lori, he told me: “About 10 years ago she started building wall beds one at a time in her garage. She ended up having more work than she could handle. We ended up buying his company.
Fast forward to 2022 and Lori Wall Beds is a direct eight-figure business. Marquardt and his brother Kyle jointly own and operate it.
How can a side hustle achieve eight figure revenue in a few years? He and I recently discussed this and more. Our entire audio conversation is embedded below. The transcript is edited for length and clarity.
Eric Bandholz: Tell us about Homestead brands.
Brenden Marquardt: Homestead Brands sells furniture over the Internet. We started with Murphy beds, which fold up against the wall when you don’t need them. This company is called Lori Wall Beds. It is still our main money generator.
As we built our team, we learned a lot about furniture and marketing to apply to other types of furniture. So we recently acquired a porch swing business which we are trying to scale. This is called organic swings.
We created Homestead Brands as the umbrella company of both companies.
The word “homestead” comes from Lori Wall Beds. Lori is a real person. She’s a farmer. About 10 years ago she started building wall beds one by one in her garage. She ended up having more work than she could handle. We ended up buying his company. What she really wanted to do was make art and then start a farm for her family – build her house, grow crops, have a farm, that sort of thing. She wanted to live on the earth.
Bandholz: Murphy beds. How do you make them? What about shipping?
Marquard: At first I thought I could start building again. Woodworking is one of my hobbies. Then I looked at the numbers and quickly realized there was no way I was spending every weekend doing this. I have a family. Making and selling Murphy beds wasn’t my full-time job; it was a scramble at the time.
Lori had a second product she was selling, a DIY plan to build the bed. People could download a PDF file, buy the wood, and put it together as they pleased.
My brother Kyle helped me strategize. He and I became partners in the business. We decided to get rid of the physical beds completely and doubled down on the PDF plan. We started selling the bag of hardware that goes with it – screws, nuts, bolts. We pushed that as far as we could with the DIY woodworking crowd, around $250,000 a year.
It was pretty good for this product. But I wanted to quit my job and work full time. That’s when we started thinking about making the beds on a large scale.
Bandholz: How did you find a manufacturer?
Marquard: We first used Craigslist. We were looking for a local carpenter who wanted to build beds 24/7. It’s a difficult crowd to try to do business with on a large scale. Eventually I started googling people who would cut the wood to specification. Most people who responded wanted huge minimums.
We eventually found a company that accepted the job. It wasn’t without speed bumps, but they cut the exact pieces from the DIY plan, put them in a box, and inserted the same hardware bag we were selling. We found a fulfillment company to store it for us. That’s how we started with the physical beds.
It is similar to an Ikea product. It’s called a flat pack – ready-to-assemble furniture. Customers follow the instructions and assemble them. It takes about six hours. It’s no small job.
Bandholz: A lot of people like to build stuff.
Marquard: Yes. We have generated a kind of community with clients who have put a lot of effort into their projects. We received very good reviews, with photos. People are proud to share their projects and help each other with questions, answers, that sort of thing.
Bandholz: What is the selling price?
Marquard: Our average order is $1,600. This includes spots, which have become popular. At first, our average order was around $1,000.
Bandholz: How do you attract customers?
Marquard: We have focused heavily on optimizing conversions on our site. That’s the first thing. Our site contains many trust builders, such as reviews, seals, etc. Once our site converted well, we started advertising to drive traffic. Paid search has been our best channel.
We also have a blog that drives organic search traffic.
Bandholz: You were making $250,000 in annual sales. Looks like you’ve grown up.
Marquard: Yes. We have grown considerably. Revenues quadrupled in 2020. My brother and I both work full-time in the business. The pandemic has been great for sales. Growth continued in 2021. Murphy beds are useful if you need to salvage a guest bedroom for an office, exercise room, or classroom to teach your kids.
Bandholz: Has your manufacturer been able to keep up?
Marquard: Our supply chain has become very difficult in 2021, partly because our manufacturer has not been able to keep up with growth. So we spent most of 2021 looking for a better partner and strengthening the supply chain that our manufacturer had taken care of. We are now bringing some of this supply in-house.
Bandholz: How do you divide the tasks with your brother?
Marquard: We are co-founders and co-CEOs. We make decisions together. He and I have complementary skills. We generally divide the work between the digital domain and the physical domain. Kyle lives in Spain and he takes care of the digital side – marketing, website, influencers, everything online. I deal more with the physical side – product, manufacturing, logistics, customer experience and customer service. I also supervise the financial side.
Increasingly, however, we have team members doing much of this work. Kyle and I are supervising.
Bandholz: Switch gears, why porch swings?
Marquard: Ever since I bought the Lori wall beds, I’ve been concerned that the wall bed market is limited. As we grew, I kept thinking that we were going to reach our peak. We hope to push our ceiling much higher with small brands, such as Organic Swings, and grow them.
No one needs a second Murphy bed. No customers return to Lori Wall Beds to buy again. I have to acquire customers every time, so expanding the product line will hopefully keep customers coming back.
Bandholz: Where can people buy your products, support you, contact you?
Marquard: Homestead Brands is our corporate website. Our wall bed site is Lori Wall Beds. Organics Swings sells the porch swings. I’m on LinkedIn.