Daily deals are dead, but flash sales live on: Yabblr launches DIY flash sale marketplace

By Erin Griffith , written on June 13, 2013

From The News Desk

The first wave of flash sale fever petered out sometime in 2011, just before daily deal fatigue set in and subscription commerce fever started to spread.

As a category, flash sales sites have experienced plenty of growing pains. Gilt Groupe went through some layoffs, belt-tightening, and a major talent turnover. Rue La La recently replaced its CEO. Totsy went belly-up. Lot18 has gone through a couple of pivots and rounds of layoffs. That hasn't stopped new companies from trying their hand at the business model. The success of fast-growing companies like Fab, One Kings Lane and Zulilly keeps hope alive, I suppose.

Today a new one launches with a new approach. Yabblr is a flash sales platform that uses elements of a marketplace to give autonomy to independent sellers.

The idea is that most flash sales sites think curation is their special sauce. Their founders often come from the old school retail industries where items are chosen by a tastemaker and presented to shoppers. Fab CEO Jason Goldberg told me in April that Fab would never be defeated by clones, because it is in the taste business.

“They didn’t have a Bradford,” he said, referring to his coworker Bradford Shellhammer, the guy behind Fab's quirky design aesthetic.

As I noted at the time, that’s a lot of credit given to one person’s point of view -- and a lot of pressure. As Fab loses $50 million a year and raises up to $250 million in new VC money, the company is making a gigantic bet on a hard-to-quantify, hard-to-copy aesthetic to keep itself unique even as it becomes a global web super-store.

Yabblr is taking the exact opposite approach. Rather than have buyers curate the company's daily flash sales around one aesthetic, Yabblr is letting independent designers and brands create sale events directly.

The advantages are as follows, Yabblr CEO Jeff Zaretsky explains. By doing it themselves, retailers can control the terms of the pricing without being strong-armed by the retailer into taking deeper discounts than they're comfortable. Further, they can control the timing of a deal. They set the timing of the shipping and fulfillment time. Third, they don't have to meet minimum inventory quotas required by many flash sales sites. Lastly, Yabblr gives its sellers the ability to remarket their goods to customers at full price after the sale ends.

Perhaps most importantly, Yabblr takes a much lower cut from each sale because it is more efficient and has no inventory overhead. Sites like Fab take 35 percent or more from their designers. Yabblr takes 10 percent, along with a 3.5 percent credit card processing fee. Since the cut is smaller, sellers don't have to create a fake markup like they do on many flash sites in order to merely cover their costs.

Of course, that all begs the question as to whether sellers need Yabblr at all. If they're running the sale themselves, why not just sell on Etsy or another marketplace platform? The answer, Zaretsky says, is the ability to stand out from the Etsy crowd. Etsy is a noisy site with millions of items. It's hard to get your product discovered. Beyond that,  time constraints give the flash sales a bit of urgency. Items on sites like Fab, One Kings Lane and Zulilly place an element of immediacy on items with their limited availability and 72-hour sales.

Yabblr's decision to trade curation for a marketplace stems from the background of its founders. Zaretsky and his team of five come from a platform background, having previously worked on social media app platform Kickapps, which sold to KiT digital in 2011. Two other services, NoMoreRack and Groupon Goods, have taken the platform tact with discounted goods, but focus on items from large national brands.

Thus far Yabblr has bootstrapped the project after emerging from a mentoring-focused accelerator program organized by First Growth Venture Network.

The company launches with more than 100 sellers, most of which are emerging designers and brands who are trying to break through the Etsy search noise.