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It evolves over time as the retailer (Gilt) gains more volume and hence more power. If you look at Gilt, Groupon, etc. you are looking at companies that have sp
by ares2012 16y ago
It evolves over time as the retailer (Gilt) gains more volume and hence more power. If you look at Gilt, Groupon, etc. you are looking at companies that have spent a while gaining a very large channel for selling discount goods. This means they can pick and choose between wholesalers and products.
When starting out they will typically have to guarantee a certain volume to get the pricing they need and eat the product they can't sell. So it does require a fair bit of capital to get started which is why they typically start out with clearance inventory where the wholesale price is so reduced.
- splish 16y agoThe initial rounds of Gilt were very limited on offerings (unlike the 6 or 12 designers they now carry daily) it was still high end though, so that initial entry point was indeed there for the early "designer" items, but as momentum gained on revenue/capital they snowballed to the current state. To further pad this shortcoming in the early stages Gilt was invitation only, and had a lot of control of the influx of new customers to the site, which helped two-fold: promote the air of exclusivity and buffer for the smaller initial supplies/vendors from being out of stock too quickly. This also promotes traffic to the site as items, as they do today, sell out in popular sizes/prices fast, your users are logging in sooner/more frequently to grab a "deal".