Think of it as the next generation of e-commerce. Flash sale websites, where a limited quantity of product is sold for a limited period of time, are gaining in popularity. And they don’t seem to just be a "flash" in the pan.
These sites are based on the idea that a short-term sales event drives consumer interest while keeping inventory and operating costs low for the retailer.
Like the old traveling salesman who came to your door, offered goods for sale and then moved on, these sites operate on a “get ‘em before they’re gone” mentality. The approach seems to be catching on.
While each flash sale website is unique in both its specific sale model and in the kind of items it sells, their common ground is in the flexibility they can have in both pricing and their product offering, which allows the organization to remain nimble.
“The more people who buy, the lower the price for all,” said Jeremy Kugel, co-founder of Jasmere, an e-commerce site that features a different specialty product every day. “We don't charge customers' credit cards until any one sale ends, and everyone pays the lowest price of the day.”
While not all sites offer group-scaled pricing, the flash sale model allows all flash sites to keep inventory costs low because they negotiate great deals on limited quantity merchandise.
“We’re partnered with over three hundred brands,” said Jason Ross, founder of JackThreads, a men’s fashion flash sale site. “We move a large volume of merchandise, [and] we’re a trusted outlet in the fashion industry. That’s why we’re able to negotiate such great prices and pass that on to our members in the form of great savings.”
Not only do flash sale sites keep their inventory costs low, they also save on the cost of a physical location, which is true of any e-commerce site, but is especially true for a company with limited inventory storage needs.
Shoshanah Posner, who works for Shadora.com, a flash sale site that sells jewelry, notes that another key advantage of flash sale sites is that many operating costs don't exist.
”We do not have the expense of a physical store location — such as rent, maintenance and decor,” said Posner.
As with many Internet-based companies, social media such as Facebook and Twitter are crucial to marketing flash sale websites. If a site is run by a parent company — Shadora.com, for example, is a branch of OneSaleADay.com while JackThreads.com is owned by Thrillist.com — they can rely on a certain amount of publicity from their parent company.
However, social media sites are still a big part of getting the word out, as well as keeping and gaining customers.
Ross said JackThreads.com uses its Facebook and Twitter accounts to run contests, let its fans and followers know what the company is doing and most importantly, get feedback from its customers. Similarly, Kugel says social media helps Jasmere attract more customers.
“Once a customer buys her, say, organic truffles, she gets a note to 'spread the word.' She gets links to post on Facebook, Twitter, etc. And she does, because A, she's discovered a product she really loves, and B, she knows if more people buy, she'll benefit from a lower price,” Kugel told BusinessNewsDaily.
Because flash sale sites only sell inventory for a limited time, it might seem that returning an item after a sale ends is an impossibility.
However, nearly all flash sale sites offer some kind of return policy that allows you to send back any item you are unsatisfied with, no questions asked.
JackThreads.com and Jasmere.com take back any item within thirty days for store credit. Jasmere.com ensures that customers receive the same return policy as the manufacturer, and the product is sent directly back to the vendor; JackThreads often features returned items in future sales. Shadora.com takes back merchandise for a full refund within fourteen days. As for its policy on returned items, Shadora either ships them back to the manufacturer, or features it as a “mystery item” on the site.
Posner thinks the model is going to be here to stay.
“People are going to start realizing how much extra they’re spending [on products],” she said. “I think it’s the way of the future.”