My long-time favorite social commerce company Zlio just launched an extremely interesting extension to their business model on their French site: Zlio Suppliers.

To understand what Zlio is doing here, you need to understand their general business model: Zlio allows everyone to create a store (including tons of social tools like reviews, recommendations, etc). The store is filled with products from affiliate partners - i.e. the store operator doesn’t sell his own stuff but merchandise which he selected from a broad range of affiliated partners, earning a commission from every sale he generates. This is a wonderful model for a lot of content producers (blogs, etc) to add some ecommerce capability to their store without the need to actually run a real ecommerce operation. For example could a blogger, who writes a blog about diving, create a store full of his recommended diving gear and thus would create a highly relevant shopping experience for his readers.

Now Zlio took this a huge step forward: Zlio Suppliers works directly with the suppliers of merchandise and thus increases the margin both for the store operator and Zlio dramatically (in an affiliate model the store operator only gets a few percent of the final sale price). What makes this model so interesting is the scale of Zlio - the guys have literally a couple of hundred thousand stores active. What makes Zlio an extremely interesting sales channel for manufacturers and other suppliers of merchandise. Great news if you are sitting on inventory which you want to move.

It will be very interesting to see which types of merchandise this model will attract and for which merchandise it will generate a solid sell-through rate. Also interesting to see when Zlio will roll this out internationally.

Disclaimer: I consulted for Zlio in the past.

Posted in E-Commerce, News