With all the talk about a looming tech bubble in Silicon Valley, it's no surprise that the flash sale industry, a once-booming business model, may be heading to the grave. Industry revenue has plummeted to 16.75 annual growth, down from an annual growth rate of 76.2%. "Unicorns" are being acquired by larger companies just to stay afloat. Gilt Groupe, once valued at $1 billion, was recently acquired by Hudson's Bay Company for $250 million, and Zulily recently sold itself to QVC following its IPO in 2014.
In my mind, the flash sale industry was dead and gone, until I caught wind of Jane.com.
Ranked No. 11 on the Inc. 5000 list, Jane.com appears to be THE sleeping giant in the flash sale industry. Based out of Lehi, UT, the company has managed to grow exponentially--$56.9 million in revenue in 2014, over 33% of customers are repeats, and the company was named the fastest-growing company in Utah. How is this company doing so well in an industry that's supposed to be going extinct?
Hunting for answers, I reached out to JD Stice, COO of Jane.com, who was able to tell me a little about the company and how it has managed to not just stay afloat but thrive.
Jane.com has been around for 5 years, and hasn't had to evolve much from its original offering. In 2011, the company was reaching out to sellers with their own sites on Etsy, looking for products that were special or interesting or unique in some way. Those sellers were able to run 72-hour flash sales on Jane.com, boosting their sales and bringing some consumer awareness to their own sites and products. Jane.com now runs around 250 deals every day, with 2,000 active sellers on the platform.
Stice explained that the main differentiator between sites like Gilt Groupe or Zulilly and Jane.com is that Jane.com does not do any of the fulfillment. As a marketplace, the company hand-selects the products featured on Jane.com and promotes the deals via email and social media each day. And, as in the beginning, the focus is still on finding special products that will resonate with the Jane.com audience.
"We love the uniqueness of the products our sellers bring to us," said Stice. "Our selection is another element that sets Jane apart."
The company's business model is another differentiator, and allows sellers to move inventory extremely fast. Unlike other flash sale startups, Jane.com pays its sellers after they have shipped the item to the customer. According to Stice, it's a huge incentive for their sellers to ship quickly, and there is no time frame where they are waiting for funds to be paid out.
When I asked about Jane.com's "secret sauce," Stice said it's simple--build your business model around how you treat people. In Jane.com's case, that means developing processes for empowering its sellers, employees, and the customer.
Stice makes thriving in a dying industry sound easy. "People always ask us what our 5-year plan is, and honestly we are thinking about tomorrow and what opportunities we have right now. The industry as a whole is struggling, and consumer behavior is changing all the time," he continued. "But people will always love deals, sellers will always love exposure for their products, and our focus will always be on connecting people to products and sellers that they'll love. As long as we can succeed at that, I'm confident the future is bright for us."