Exciting Commerce // Unlimited

Sales Update: Karmaloop Doubles Revenue to $40 Million

Karmaloop steps up its game and forecasts its 2008 revenue to be $40 million, more than double from last year.

"The e-retailer of trendy apparel and accessories for teens and young adults expects 2008 sales to run about 30% less than initially expected because of the economic slowdown, but still projects sales growth of more than 100% this year to $40 million, CEO Anand Shah tells Internet Retailer."

With its Kazbah Store and Karmaloop TV, Karmaloop is in the top 500 of online merchants in terms of turnover.

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Originally posted in German by Jochen Krisch, translated by Jason Soo.

Vente-Privée Calculates with 30% Margins

France’s Vente-Privée founder Jacques-Antoine Granjon revealed more details on his business model. In an interview with the German Manager Magazin ("Der Marken-Messias", German link) he openly comments on the profit margins:

"'We earn by adding approximately 30% margin to the product price', said Granjon.

Nevertheless, with the production infrastructure he has, outside observers could find it hard to imagine that he has reported profits for the last three years."

Insiders see differently.  At the recent Pangora Congress (German link), the Vente-Privée CEO illustrated his successful business model in detail.

One can’t undervalue that Vente-Privée pre-finances all product stock far in advance.  Vente-Privée places orders with it’s suppliers only after the end of a sales campaign: that is, after the end customer orders.

The users, who for the most part pay immediately, receive the delivered goods several weeks later.  And the suppliers are also not paid immediately. Thus, Vente-Privée has ample cash in hand at all times.

What only very few of the imitators can pick up on:  Vente-Privée has developed in the first five years of operation (2001 – 2005) an elaborately constructed sales system that can only be profitably run if all the sub-aspects are known and considered. Anyone can open a shopping club, but at present only a few are profitable.

Even more surprising is how shopping clubs (in Europe) continue to be able to pull large sums of investment money.  And that includes clubs which although obviously good at (costly) user acquisition, don’t seem to understand the sales principles enough to be able to survive the market in the long run.

This week Germany's leading shopping club Brands4Friends raised $13m (EUR 10m) in the third round of funding.

Originally posted in German by Jochen Krisch, translated by Jason Soo.

Lycos Europe Throws in the Towel, Puts Pangora Up for Sale

Lycos Europe wants to close up its portal and webhosting activities as soon as possible and sell the Pangora shopping portal (German link).

This news follows Yahoo’s sale of Kelkoo.

Originally posted in German by Jochen Krisch, translated by Jason Soo.

Barcamp in Hamburg, Part 2

The second day of Barcamp in Hamburg had all the action of the previous day, including some fun hands-on with a pre-release Google phone (to be made available to the German public by T-Mobile in Q1 next year).

The very tech savvy audience had a jovial time grilling the two T-Mobile sales reps with probing questions on such topics as data privacy, lack of Internet Sharing functionality (such as commonly available on WM6) and the re-configurability of the Android platform.  With one of the most sales oriented presentations of the Barcamp, the audience have now learnt how great T-Mobile is, in case they didn't know already.

Other highlights:
Volker Gersabeck of RapidRabb.it gave an introduction of their rapid prototyping application, Prototype Creator.  With some interactivity from the audience, Volker converted some handwritten web navigation sketches into a basic click dummy in a few minutes.  As gathered from the discussion with the participants, this product from RapidRabb.it produces more "scratchpad" or basic looking prototypes than Adobe Fireworks, but intentionally does so in order to have a quick tool which is rapidly deployable without much training or pre-configuration required.  Some argued that the lack of fancy design elements even helps the end customer focus on the essential functionality and reduces false expections on the end design.  Preview of the Prototype Creator, which officially goes public on December 1, is available here.

Stefan Betzold of pier314 gave an well structured talk on Next Level eCommerce, where he illustrated some of the more innovative sales channels over and above standard banner ads and static online shopping cart solutions.  Via a few real examples, Stefan explored use cases for dynamic entry points into e-commerce (for example widgets and video overlays) and shop atomization (such as complete mini-shops which are distributable as banner ads).  In the ensuing discussion - which Stefan did a notable job moderating - lack of customer trust came up several times as a key barrier against the adoption of such e-commerce innovations into the mainstream.  His complete presentation is a good read (indeed, the only detailed English slideware at the Barcamp which I stumbled across - don't let the title slide fool you):

Barcamp Hamburg - Next Level eCommerce?

View SlideShare presentation or Upload your own. (tags: #bchh08 ecommerce)

Many thanks to the Barcamp organizers for putting up such a great event!

Barcamp in Hamburg

Exciting Commerce reports this weekend from Hamburg, Germany, where the Hamburgers have organized their second annual Barcamp (German site).

As opposed to the recent Web2.0 Expo in Berlin, ample discussion and networking time is available between sessions.  The locale on the premises of the Otto GmbH & Co KG is well dimensioned for hosting the sessions, the catering and the multitude of people milling about.  In attendance are about 350 participants, around half of whom are first timers.  The organization and all the sessions are conducted exclusively in German.

Sessions of particular interest (translated):

• Improving the World, 2.0: Opportunities and Risks of the "Social Web" for the Charity Market

Ole Seidenberg gave a nice overview of current web platforms which help charities or "good-doers" organize, raise support or fundraise.  (Although I did have to mention one of my favorites to him, Amazee.)   ;-)

Overall, Ole saw social media as opening up opportunities for increased transparency, choice and donor relationship management possibilities.  Some identified risks: less money going to "all purpose" charities, superficial solidarity (too easy to sign up to a cause which you don’t really care about), and the potential loss of control of the intended message.

• China 2.0: Introduction, Web and Culture

Oliver Ueberholz presented an overview of current web trends in China covering the major players in the Chinese webspace, some statistics, as well as some personal theories on the copycat phenomenon. Presentation below (with an acknowledged dearth of explanation):

Web2.0 in China

Get your own at Scribd or explore others:   Government    US Federal    marketing    social 

Zazzle Launches International Operations in Europe

Zazzle, a global trendsetter in e-commerce, now delivers out of the UK in addition to its US operations. After months of preparation, the English site was launched and with that its first international operation (press release):

"The launch of Zazzle.co.uk further reinforces Zazzle's commitment to revolutionize e-commerce, and to empower buyers and sellers around the globe."

"The Zazzle platform was built with global commerce in mind," said Michael Karns, Head of International Development for Zazzle."

The new Zazzle is much more design and marketing oriented.

Zazzle, although already quite innovative with their widgets and mashup tools in 2007, has used the past months for a complete makeover. As Michael Karns described to us last September during a visit to the headquarters in Redwood City, Zazzle used to be a mainly tech focused company.

In the meantime, Zazzle has put more value on design aspects, starting from a new logo and ending with a pretty slick packaging design.

Several months ago Zazzle launched one of the most amazing design tools in the industry, rendering the design to predefined body shapes. Here's an example for the male body:

In the future, Zazzle wants to be more marketing driven.  Lots of the changes of the last months are related to this goal.

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Originally posted in German by Jochen Krisch, translated by Jason Soo.

OpenCandy Announces $3.5 Million Series A Financing

OpenCandy Inc demonstrates that startups with proven ideas - particularly in the area of monetization - may very well weather the current financial crisis.  They announced a few days ago a Series A financing round in the order of $3.5 million.

OpenCandy’s distribution engine technology is targeted particularly to application developers who don’t have huge marketing resources or distribution networks to grow their installed base.

Originally developed to bundle software installs for DivX, OpenCandy’s technology opens up an association based recommendation network into your application’s installation routine.  When a user installs your application, they will receive suggestions to install other associated applications.  As the host application you can not only decide to hand-pick apps that you like and want to support, but also allow the distribution engine to associate apps for you (which will be a paid recommendation).  To maximize user acceptance, the additional recommendations will always be purely opt-in.  The company claims to have some intelligent evaluation routines which will determine relevant recommendations based on the software which is already installed on the user’s computer.

My take on this: the capability to mix-and-match altruistic genuine recommendations with a royalty based system gives this technology a "please everybody" characteristic that should help it gain widespread acceptance.

Financing was supplied by Bessemer Venture Partners, O'Reilly AlphaTech Ventures (OATV) and a group of angel investors which include Reid Hoffman (LinkedIn, Mozilla), and Jordan Greenhall (Former CEO and Co-Founder of DivX).

(via TheDownloadBlog)

Sales Update: Etsy Doubles Trade Volume Since January

Etsy is growing from month to month and has doubled its trade volume this October with $8.4 million in relation to the January figures of $4.2 million:

Nevertheless, with cumulative volumes at $64.6 million so far, it could be difficult for Etsy to achieve it’s 2008 target of $100 million of gross merchandise value.

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Originally posted in German by Jochen Krisch, translated by Jason Soo.

Zappos Lays Off 8% of Workforce

Even a role model enterprise such as Zappos needs to cost cut. 8% of its workforce will be reduced. Zappos CEO wrote on Thursday in his blog:

"Today has been a tough, emotional day for everyone at Zappos. We made the hard choice of laying off about 8% of our employees.

The layoffs will affect almost every single department at Zappos. In addition, we are also looking at closing some of our brick and mortar outlet stores in Nevada and Kentucky.

Fortunately for Zappos, we're in a much better position than many other companies. Unlike many other companies, we are still growing and already profitable and cash flow positive."

Zappos follows eBay, who recently also made similar cuts.

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Originally posted in German by Jochen Krisch, translated by Jason Soo.

Social Commerce: Zlio Launches Marketplace for Merchants and Suppliers

The social commerce platform Zlio may have in the past focused on sales of products from affiliate partners, but on the new marketplace “Zlio Suppliers”, dealers can also set up products which will be marketed across the Zlio sales network.

Zlio would like in the future to profit from higher commission fees by bypassing the affiliate program structure.  In doing so, Zlio hopes to avoid bitter experiences such as with Amazon.com whereby Zlio was completely blocked out of the affiliate program.

For Zlio it’s the third or fourth strategy change. With the exception of the user driven distribution model, the current platform has barely anything in common to the original Zlio from 2005.

Originally posted in German by Jochen Krisch, translated by Jason Soo.