N 2013, TEDDY FONG was roaming the showroom of
a factory in Shenzhen, China, when a stylish,
modern sectional caught his eye. He asked the
factory owner how much it cost to make. About
$200 to $300, the owner replied. Fong was astonished. It was the kind of sofa that might sell for
thousands at a Room & Board. “There are crazy
margins in the sofa business,” Teddy thought.
At the time, Teddy was in the crib business—
but this was enough to make him think maybe
he ought to be in the sofa business, too. Teddy
runs Million Dollar Baby, a $70 million children’s
furniture wholesaler his parents, Daniel and
Maryann Fong, started in 1990. (Since then, MDB
has made six appearances on the annual Inc. 5000
list of America’s fastest-growing private compa-
nies.) It produces six brands of cribs, at nearly
every price point and style, and sells them through
almost every major online retailer, including Amazon,
Walmart, and Target, and at many specialty retailers. Heard
of the best-selling $379 minimalist Babyletto Hudson
crib? That’s MDB. Beyoncé’s $4,500 translucent acrylic Vetro
crib? That’s MDB, too.
But MDB didn’t always have Beyoncé-caliber customers.
Almost three decades ago, Daniel Fong was a venture capitalist with an urge to start a company. He did some research and
bought and then merged two baby-furniture wholesalers,
which had low overhead and were profitable.
One innovation that set the company apart in its early days
was its distribution. Most crib vendors required retailers to
place their orders twice a year and then hold the inventory
themselves. Daniel made the contrarian move of setting up
shop in a 30,000-square-foot warehouse in the L.A. suburb of
Montebello, an industrial area close to the retailers he served.
Retailers could pick up furniture at any time, while saving
floor space. “My tag line was ‘Use my warehouse as your warehouse,’;” Daniel says.
He took a similarly e;ective tack with his manufacturers in
Asia. Instead of having a transactional relationship, MDB would
order inventory it didn’t need just to keep business steady for its
most coveted factories, which over time became so loyal that
they worked with MDB exclusively, or agreed not to make copy-
cat designs for competitors. “I act as their sales department
and I treat them as our manufacturing department,” says
Daniel, who would even invite factory owners to stay with him
and Maryann when they were in town (a couple did).
Teddy and his sister, Tracy, grew up roller-skating around
MDB’s warehouse, sometimes helping package nuts and
bolts, but Daniel didn’t expect them to join the business. He
had worked reluctantly in his own father’s textile company
for four years, and didn’t want to apply that pressure to
his kids. Both went to Harvard, but in 2004, after Maryann
The Tribe When Daniel Fong’s kids got involved in his crıb company, they turned a simple whole- sale business into a power- house–with its own startup
BY LINDSAY BLAKELY
DAUGHTER OF TEDDY
AND TIFFAN Y, IN THE
$4,500 ACRYLIC VETRO,
THE CRIB PURCHASED
96 - INC. - JULY/AUGUS T 2017
si pl ol sale business into a power- n