Gilt's amazing amazing business model

Brilliant post by Matthew Carroll at Quora about many many details about Gilt's business model that I hadn't grokked. Here's just one of many examples:

When you evaluate the product selection, notice that each sale/opportunity segments their target demographic into purchase categories that increase vertical associations (i.e. shirts & pants) and reduces horizontal choice (i.e. do I want the blue shirt or the green shirt).

And this:

As a brand, you could sell your excess inventory to your target demographic through a venue that actually serves to augment your core intangible asset (i.e. the brand). OH YA... Keep in mind that these sales occur at a CRITICAL juncture in your seasonal cash flow cycle as the brand has plowed every dollar back/drawn down on ALL of their revolving credit facilities to finance next season's production hitting their ex-factory dates. International distributors have just paid and this partnership with Gilt bridges your cash flow through landing the goods and collecting on your CODs and net 30 term accounts - well, at least until you can coerce your Factor into accepting the accounts that achieves your minimum receivables factor rate.

Seems these guys have figured something out.

I know a couple of the co-founders from my days at ArsDigita, and even got to meet with Gilt founder (and former CEO of Doubleclick) Kevin Ryan one-on-one for about an hour back in February. Interesting and enlightening meeting, to say the least.

(via Ryan Freitas)


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