I discovered you could buy homes on Amazon by accident one day while shopping. After I stopped laughing – “Who puts a $46,900 charge on their American Express there?” – I had to do more research.
I found out plenty of people are not afraid to buy a house on Amazon. Two companies that have built a home business on Amazon are Allwood Industrials selling cabin kits and MODS International offering container homes. Both companies have found a market there.
Allwood cabin kits for the do-it-yourselfer
With his roots in Scandinavia, Tapani Pekkala, who hails from Finland, offers an IKEA-inspired approach to home construction. The kit cabin market in Europe is well developed, he told me, where over 120,000 kits are sold each year. With limited space to build, Europeans who long for a Scandinavian-style lake house, erect kit cabins in their backyard to create a personal getaway.
The trend is now moving stateside. “Kit cabins are finally becoming popular here and they are playing a role in the tiny house movement, which happened to coincide with Allwood’s expansion into this category,” Pekkala says.
After founding Allwood Industrials in 2000 selling imported wood products, Pekkala saw the opportunity to market cabin kits back in 2012. A friend from Finland who worked as head of sales for one of the largest cabin manufacturers there tested the product here. When that initial trial with the first US distributor did not work out, Allwood stepped in to secure its first major cabin kit supplier.
The company launched first on its own online website. Having been an established vendor with Home Depot and Lowes, Allwood approached these big-box home building retailers about selling kits, but they were originally lukewarm. Then after Allwood launched on Amazon in 2013, the big-boxes saw the light. “Back when we started working with Home Depot and Lowes, they were each others’ worse competitor. Now it’s becoming Amazon,” Pekkala shares.
Today Allwood cabin kits are available on Houzz, eBay, Outlook.com and will shortly be added to HomeDepot.com and Wayfair. But Amazon will continue as a powerful third-party internet partner with great resources that they know how to use to the max. “Amazon is very thorough, so it is no surprise they are so successful,” Pekkala states. “Their seller support is great. They have been enthusiastic and supportive all the way even though we are a small company and sell a very unique product.”
Allwood’s uniqueness has been a key advantage of listing its cabin kits on Amazon. When people come searching for house or home, Allwood’s cabins end up in the Amazon Buy Box, the gold standard for a listing on Amazon, which is how I first came upon them. “Unlike in other product segments where different vendors have to fight to get a preferred listing in the Buy Box, we get there over 90% of the time. That is a huge driver of business and inquiries to us.”
Educating the potential buyer remains a stumbling block to some sales since customers only get the building’s shell, to which they must add the kitchen and bath fixtures. Assembly can challenge others, though Pekkala assures me that assembly is relatively easy. For consumers looking for a helping hand, Allwood works with third-parties who can construct the building for buyers. “The key is to educate buyers about the cabin kit opportunity. Our hope is that we can serve the increasing demand for cabins and tiny homes with our high-quality and well-priced kits,” he adds.
Amazon’s credibility gives an added measure of confidence to customers looking for a lower-cost housing option, as well as wealthy customers looking to add guest homes on their existing properties. “Amazon is one place where people feel confident leaving a credit card number for a $40k+ cabin kit on the first call,” Pekkala says.
MODS sells fully-equipped container homes
For those deterred by the do-it-yourself kit home, Amazon also offers MODS homes, a complete house in a box literally, as its homes listed on Amazon are constructed in converted shipping containers. Made in Wisconsin, a MODS tiny home is trucked to the prepared building site fully equipped with shower, toilet, sink, kitchen appliances, heat and air conditioning and connections for sewer, water and electric.
“Inside we use all standard building materials, so it looks just like a regular home when you walk through” explains Doug Larson, founder of MODS International. On the outside, the tiny homes listed on Amazon are painted with corrosion-proof automotive paint.
But the Amazon tiny house is just a tiny part of the MODS story. The company got its start as an extension of Larson’s traditional construction business, Orion Builds. They sent construction crews down to New Orleans to help rebuild after Hurricane Katrina in Class A motorhomes to put the workers up while they were there. After they returned, he saw one of the motor homes parked next to a shipping container that was on hand and thought those containers could easily be converted into temporary housing and tiny homes.
From that tiny home start, they discovered the adaptability of shipping containers to many different building uses, plus they have amazing strength, durability and low cost. “Most people aren’t buying one unit. They are having five, ten or even 12 containers put together,” he says, and laughs, “These homes are so strong you could park a fully-loaded semi-truck on top.”
MODS’ container solution has been rapidly adopted for commercial uses, including hospitals, medical clinics, corporate offices and displays and retail spaces. “We just built a display for GE jet engines,” he says. “And that building can be moved from location to location,” adding that his company has also provided retail space for Verizon.
The appeal to homeowners to use containers as the building block for any sized home is in the numbers. “We can build a house of any size you want for a 10-25% savings,” he says. “And if you don’t want the corrugated look on the exterior, we can put panel brick, stone, whatever to hide the metal so no one can tell it is a house made out of shipping containers.”
Those savings are realized not just from the use of the container shell, but also that the building site work can be done simultaneously while the modular building construction is done in the Wisconsin factory. “We ship the container home to the prepared site, and it is fairly straightforward to hook up the connections. We make it very convenient,” he says.
Amazon is a fairly new partner for MODS, having launched there about six months ago, but it is bringing attention to the company as a responsible-building alternative, using shipping containers that become eyesores as they are stacked up empty to rust. “We are upcycling containers because there is a huge surplus of them,” he says. “Amazon is drawing curiosity to our website from customers, business owners and corporations. We’ve had as many as 25,000 daily visitors to our site.”
As with Allwood, listing its MODS tiny homes on Amazon brings credibility to an innovative housing solution that as of yet is not widely known . “Amazon has been a great partner for us,” Larson shares. “At first they were cautious about what we sell because they had no experience with the concept. Is it real estate? Is it a mobile home? But after we worked through the red tape and met all their compliances, it has been an excellent partnership.”