Discuss suitable business models for the following start-up business: (ii) Fashions and Fashion Jewellery.
CS Professional · Valuations & Business Modelling · PYQS · December 2020
Discuss suitable business models for the following start-up business: (ii) Fashions and Fashion Jewellery.
Answer & Explanation:
(ii) Fashions and Fashion Jewellery The Modernized Direct Sales Model: Direct sales companies like Avon and Amway understand there is a big business opportunity in the model. In 2009, direct selling accounted for $117B in sales worldwide. Chloe + Isabel, a fashion jewelry startup, is reinventing the direct sales model by appealing to fashion forward students who have tuition to pay and others who are unable to secure full-time employment. The startup designs, produces, and markets fashion jewelry, and interested sellers or merchandisers can sign up and create their own online store to sell their jewelry and earn a 30% commission utilizing the startups technology infrastructure. The startup has seen incredible success using this model, and increased loyalty of its sellers (who are also its customers). Why It Works: This model is perfect for today's economy where people are more willing than ever to supplement their income, and seek new career paths. With unemployment still high, and more companies offering supplemental income opportunities, this model continues to rise in popularity. Another reason is that social media allows sellers to reach more people than ever, increasing their success as merchandisers, and bringing in higher revenues for the company. Finally, software available now has dramatically improved productivity and flow for direct sales reps. Others Who Have Followed: Sequoia-funded newcomer, and another jewelry and accessories startup Stella & Dot has found massive success in using this type of business model. Trumaker, is also finding success with this model in the mobile men's apparel space and call their direct sellers "Outfitters"
Topics: Business Modelling
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