Whats the deal with private sale sites? Off late this segment seems to be getting a lot of attention. See http://www.techcrunch.com/2010/01/28/private-sales-site-beyond-the-rack-raises-2-million/.
Anybody has any insight on how this works? What are the drivers for the high end brands to give such deep discounts? Do they buy inventory and hold or does the brand do the order fulfillment etc? |
Wikipedia has a very nice description, if you look up sample sale.
Sample sales are used by retail businesses in order to discard excess merchandise. Sometimes these samples have been used by agencies to sell products that they will distribute to local vendors. Sample sales are often associated with the fashion industry. These sales are an opportunity to get near perfect merchandise at a fraction of the price. It is often difficult to have information on the date and time of sample sales, although there are websites which list information about sample sales in on line diaries. They are also used to draw in new clients, hoping that the new people will return to the company's store and buy more merchandise. While many sample sales pop in various locations in NYC, there are a [very small] handful of companies that have a permanent location. Clothingline.com is the longest running sample sale company in New York City.
Recently, a number of new online businesses have emerged that offer the sample sale concept to an online audience. Well-established in Europe with the original creator of online private sales, vente-privee.com[citation needed], this trend moved to the United States in 2007 with the launch of companies such as Savvy + Co., Gomatta Girls, Editors' Closet, Beyond the Rack, RueLaLa, Gilt Groupe and Ideeli. These businesses offer access to those living outside of the traditional sample sale markets of New York and Los Angeles the same access to designer fashions at 'sample sale' prices.