We don’t typically cover the sample sales market, but because some publications are taking a hard look at it as a potential source of online revenue, we would be remiss not to cover the entrance of a prominent player to the red-hot sector. Mark Vadon, who co-founded online jewelry giant Blue Nile, along with former Blue Nile executive Darrell Cavens, have raised $4.6 million from VC firm Maveron, along with other investors, to fund the launch of Zulily, a sample sales site aimed at “kids, babies and busy moms.” It will launch early next year.
Cavens, who will serve as CEO, tells us that he was attracted to the market because of the strong growth at other sample-sales sites, which typically offer short-term sales of high-end goods; some analysts have said sales at the top sample sale sites will be up as much as five-fold this year. “As we stepped back and looked at what was going on in the retail space, the consumer response to the private sales model is one of the first revolutions in e-commerce we’ve seen in quite a number of years,” Cavens said.
He adds that children’s retail is an especially attractive category, because that market has a large number of suppliers; some of the products Zulily will offer will be excess goods while others will be new ones that makers want to call attention to.
The funding comes as a number of other sample sale sites have raised rounds recently. Kleiner Perkins led a round earlier this month in One Kings Lane, which focuses on home decor. Gilt Groupe, meanwhile, raised a huge $43 million round in August. And GSI Commerce bought up Rue La La, along with its sister sites, earlier this year in a $350 million deal.
Media companies are also making their own plays in the sector in order to build a new revenue stream to buffer ad sales. E-mail newsletter DailyCandy, for instance, has launched Swirl, a sample sales site available only to DailyCandy subscribers. Meanwhile, Elle.com is working with Rue La La to give readers access to limited time, private sales of designer brands.