One thing that has gone unmentioned: when you run flash sales that promote other retailers' products, you're strengthening your competitors' business as much as your own.
For example, it was very common to see discounted jewelry or apparel on Fab from brands with a much deeper collection on their own site. It's 2011-2014, of course I'm going to Google the designer or brand, find their own site, and make an informed decision about what to buy.
Designers know this, and are savvy enough to use other channels to promote their own, where they charge the sort of prices they can build a business on. I'm willing to bet that Fab made quite a few designers more money via these sort of implicit referrals than via discounted flash sales.
Hindsight being 20/20, if Fab wanted to build a billion dollar business, they should have bought an e-commerce startup, not other retail operations. That's the only way they could have captured more of the value they were creating. Say they managed to buy Shopify. A, they'd be swimming in revenue. B, Shopify would have the marketplace they failed to make work on their own.
I think those are very different marketplaces, solving different problems. Still, this is why Amazon shows ads from other retailers on their site.
Fab was selling what's cool, and creating a price incentive. But for their audience, cool is actually more important than cheap, so by promoting the makers of cool (all of whom also have their own e-commerce channel) they were eroding their own business.
I'm not suggesting that was what killed them. I'm just saying they didn't have a bulletproof model before they started taking crazy pills.
For example, it was very common to see discounted jewelry or apparel on Fab from brands with a much deeper collection on their own site. It's 2011-2014, of course I'm going to Google the designer or brand, find their own site, and make an informed decision about what to buy.
Designers know this, and are savvy enough to use other channels to promote their own, where they charge the sort of prices they can build a business on. I'm willing to bet that Fab made quite a few designers more money via these sort of implicit referrals than via discounted flash sales.
Hindsight being 20/20, if Fab wanted to build a billion dollar business, they should have bought an e-commerce startup, not other retail operations. That's the only way they could have captured more of the value they were creating. Say they managed to buy Shopify. A, they'd be swimming in revenue. B, Shopify would have the marketplace they failed to make work on their own.