Vente Privée Model analysis

For 10/10/2009 E-Business Class
VENTE PRIVEE Analysis
http://fr.vente-privee.com/VP4/Login/Portal.ashx ‘Designer brands for smart shoppers’

This trend is changing e-business, is requiring permanent adaptation.
The concept of this model is to create a virtual retail online shop selling different brands on a variety of industries (clothes, shoes, cosmetics, manufacture, decoration, kitchen utensils, jewelry, bed accessories…) with the objective to sell those stocks on a very short period of time. There are some special caracteristics of this model, the sponsoring (parrainage), the sponsor/'godfather' receive some incentives (8€ reduction of his next purachase). For Customers, a part from those financial advantages, problems solved are:Purchase trendy products for a cheapest price on the market, convenience of online shop model (goods bought received at home).
For suppliers (brands), the problems solved are huge: the storage period is short and their stocks are exhausted faster.
For the owners, problems solved will be analized further on.

As the article published in the Journal du net highlights the advantages & strenghts of Vente Privée compared to its competitors (as BazarChic, L'Invité des marques, Showroom Privé) .
Vente Privée negotiates privileged contracts with brands creating a quasi-monopole denounced by competition.
(http://www.journaldunet.com/ebusiness/commerce/enquete/ventes-privees-pas-de-salut-pour-les-outsiders/ventes-privees-pas-de-salut-pour-les-outsiders.shtml)

-Sources & Articles related on the topic:
http://www.getelastic.com/social-media-examples/
(110 Ways Retailers are Using Social Media Marketing)

http://www.journaldunet.com/ebusiness/commerce/actualite/0712/071224-tension-vente-privee-fr-concurrents-24h00.shtml
This is an interesting article explaining the dominant position on the market of Vente privée, argument used from competitors

http://www.supplychainmagazine.fr/TOUTE-INFO/Archives/SCM013/Experience-VP.Com-13.pdf

The classic process is articulated on three pillars: the retailer (industry), the intermediary who sells with a margin and the Client (buys the product to the intermediary).

• The business model of Vente Privée on line is quite different than this classical model: the intermediary first negotiates with the retailer to reserve a stock of product that the manufacturer/retailer wants to sell first. Once the stock is reserved (not yet bought by the intermediary) this one will put it online on his internet web site before its purchase.
  
• The sale will generally last for 3 or 4 days and the announcement is made on the web site 2-3 days before the sells opens (communicating with the potential clients/subscribers through mailing lists) and is not showing the content of the stock or any product before the sell is open.
  
• To stimulate clients to buy, Vente Privée, plays with rarity phenomenon, announcing before that stocks are few and rare. The interest of that strategy is to stimulate a strong interest of clients and generate expectation caused by rarity of products sold.
  
• The client will buy the product on the web site before that Vente Privée even bought the stocks. The company will then buy the reserved goods to the industrial, adapting the purchase to the offer already made by the client.
• This business model developed and launch by Vente Privée is extremely profitable due to the stock financing. The client pays before than the company even purchases the stock to the producer.
• This strategy is essential because this business model allows the auto financing of purchases by clients and a short storage period. In theory, there is therefore no need to require to external financing = problems solved for owners
  
• The cash flow produced with a sell is therefore a factor favorable of growth and represents one of the major innovations of the development of Vente Privée model.

This model could be adapted to other industries, as the travel industry who already is applying this model to the travel sector, with 'Voyage Privé' for example.(http://www.journaldunet.com/0606/060626-voyageprive.shtml)

Nevertheless it will be interesting to apply this model to industries where the stock is an important issue, because as we studied before, the stock is purchase by the company only once the client already purchase the goods/products.

It could be profitable to gourmet/wine online shops (luxury drinks, food) that are intermediaries between the exclusive chateaux or wine houses, cakes & pasties artisans with clients providing extra services for weddings, parties for example...

This Vente Privée model is already used in this particular niche, especially in wine & spirits:

http://vente-privee.wineandco.com/inscription.php?email_parrain=melissa031@gmail.com

http://www.v2vin.com/DevenirMembre/?pe=melissa031@gmail.com

http://www.lecarredesvins.com/create_account.php?mail=melissa031@gmail.com&partner=