Vente-privee.com


1. Vente-privee.com – the six year old French company that holds invitation-only closeout sales over the Internet. It attracts over 1 mln visitors per day, generating over 40,000 sales of items.

It’s the first of kind mover in the completely new online business called Vente Privée.

Vente Privée previously only the off-line activity is the sales normally of the known brands within the frame of 2-3 days with discounts that go from 30 up to 70%. Items for sale include luxury apparel, accessories, wine and Champagne, household linens, baby clothes, and small household appliances. It works on the basis of invitation. Now luxury marks have turned to an online alternative.

Vente-privee.com proposes a completely new channel of distribution for brands. It has a unique approach to merchandising, what other closeout sales don’t develop at all.

2a. Consumers get the luxury brand products with up to 70 % of reduction. They are warned couples of days in advance of the upcoming sales. They considerable save their time and energy.
Internet Business model and thoughtful merchandising system makes the vente privée a pleasant experience. Products are easier to find. Whereas off-line Vente Privée were usually conducted in “bare rooms with cement floors and florescent lighting”, with lots of people, and no merchandising whatsoever.
Loyal customers are rewarded for their fidelity (e.g. magazine Rosebuzz)

Thanks to invitation (‘parrainage’) system the customer feels important and privileged to enter the so called ‘closed clubs’. Thank so the mailing the customer is always up-to-date with the upcoming sales.
By recommending the site to his friends, a user gets ‘les bond d’achat’

2b. The main advantage for the suppliers is that they are able to ‘dump’ their overstock in a very efficient way.
Furthermore they have more control of the brand image. The company proposes a unique value-added merchandising, using models, make-up artists, hairdressers, and photographers, and creates original music for advertising trailers to depict the products in the best possible light.
Another important thing is that the margins are twice more than in traditional closeout sales. The costs are minimised, both stock and sales. They have gained an entirely new channel of distribution. It helps to bring in new customers on- and off-line.
The relationships between the brands and venteprivee.com are really well established, thus they have gained on trust, which is really importation notion in today’s business.
Another important thing they are still able to maintain is the discretion, only the subscribed customers are informed about them.

2c. Partners. The only partner I have found is the MTV who recommends the CD they have recorded. I think it helps to the image of MTV as being young, innovative, close to customers, modern and up-to date with the tendencies.

2d. For the owner the main advantage is of course the revenue – roughly a half-billion dollars, up 40% over 2006. The company claims being beneficent from the beginning of its operation. It is 30 times larger than nearest competitor.
The business model allows the owner to but the merchandise after it has been sold. The costs of stock are still being paid by the supplier, and the owner has only to reserve the items to be sold.
The percentage of return is rather low (around 2-5%).
Being the first in this Business Model has permitted to create a huge advantage over the competitors, building its strong brand name, consolidating the knowledge on the market, and establishing loyal strong relationship of trust with the suppliers.

3. The customers:
The customers are price-sensitive still attracted to known luxury brands. They are time-concerned as well, so they prefer to buy their products online.

4. Venteprivee plays the role of a middleman. They gain a margin from 20 to 40% per item.
Recently they have also created a CD featuring original music for advertising trailers created by their recording studio.

Nevertheless they still have to assure the costs of sales, site construction and the logistics.

5. The competitors are numeroud sites of Vente Privée that have occurred reacently, e.g. BuyVIP or Gilt Group

6. The model can apply offline, as this is how it has started.

7. I think the model is sustainable, as people are always rushing for sales. And in this model sales are all year long! The Internet is booming, buying online in closeout sales is much more pleasant experience than in real-life.

8a. I think they have already done a god job, by offering 8 euros for those who invite their friends. I think now it’s the time to invest more in Communication, to put ads online, or on the radio if it’s legal. If not then I would recommend creating a buzz.

8b. I would probably launched a line of cloths or different products with the VP logo, that would be connected with the fashion tendencies they are describing on their sites. Probably make this production also in limited series, to keep the business model and make the product more unique.

8c. Obviously, they need to expand in different countries of Europe, what they are already trying to do and Asia, probably South America.
Adding other industries to this Business Model, which they have already done too, eg.
Voyageprivee. Another example could be the cars, CDs, electronic devices, mobiles, etc.


Follow this link to see the article I have been using.