http://www.affiliatewindow.com/merchant_directory.php?action=showmerch&mid=1249

Some fashion searches, the whole page of Google results every single one is to My Wardrobe through affiliates earning 10% – Shop Style, Telegraph Shop, Polyvore, Twenga, OSOYou, Priceinspector and hundreds more fashion affiliates ALL SELLING THE SAME THING FROM THE SAME SHOP. Why? What’s the point?

The public isn’t stupid you know. Since venture capitalists took over the internet went downhill.

Everybody using computes to flog the same stuff for less and less return is the opposite of what creative, individual people who spend on fashion want.

@IntellectGetOne – When you calculate the NPV of an investment, the expected growth is important. You don’t include the fact that E-commerce continues growing with +10% worldwide, even though a financial crisis. Ask yourself: Will Ecommerce decrees or increase in the nest 10 years? How does that effect the value of E-commerce investment

Why would anybody invest in E-commerce? Because it is growing fast. Of cause you have to make a profit, but when Etailers keep a plowback ratio of 100% and making annual growth at +50%, then it is not a problem that they don’t cash in yet. When you grow with 50% a year, you are not a cash cow, but you could be the day that you stop reinvesting a 100%.

I believe that E-commerce companies have the same issue as offline retailers. There is only space for few on the top. Nationwide there might only be space for 3-4 large players in each segment. You need to be the #1 online shop in your area. But if you get that position you will be so hard to challenge. Who challenge Zappos? Nobody.

In the old days, people could start up E-commerce companies as a part time job and scale it to a huge company. Today competition is too hard. Nobody just start at new online shop and gets success. It can not be done as a part time hobby business any longer. Fact is the market entry barrier is getting hard and harder for every day. Now is the time to invest in those companies, and implement some business thinking.

The big vision is, that if you can be market leader in you e-commerce segment today, then you will be in a very valuable possion. If you can have that position in 10 years from now, you will be holding the fattest Cash cow ever – you will be where all the supermarket chains where 20 years ago.

If I believe e-commerce just have begun in EU, and that we will see lots of M&A in this area.

Br, Anders

Returns (no sizing/fit risk) are a big part of online apparel businesses. They also badly eat into margins, with a typical fashion retailers seeing something like 20-30% of revenue being returned every month.

Interestingly, vintage works super-well at some places like Netaporter.

When retailers have these things, they can build a sustainable, investable, mass-market business. But it isn’t easy to get there, of course.

Finally, I wouldn’t consider Groupon to be a retail model for the purposes of this discussion: it seems more like an advertising business to me. And, like everyone, I’m still jealous of how much money they’re making

First, I buy online fashion regularly-it doesn’t bother me about price nor where it is…if I love it- I buy it, so it’s a very important tool in my life. In saying that I’m a size 8, slim and fit into anything. So online shopping isn’t risky to me. Most of my customers are not that size. Average size in Australia 12 to 14. Designer label sizing charts can vary considerably too! It’s crazy looking at the differences….size 8 in one could very well be a 12 in another? Not good for online shopping.

I found through Google analytics I have great traffic and people are interested, it’s just that women don’t want to risk spending over $50 on something that might not fit even if I do have detailed measurements or their saving 60% on a designer item new with tags still attached. With facing all these barriers I transformed a room in my house into a shop for ladies to try and buy. I have only been open 3 days and I’ve sold more in the last few days then I have in a month on my site. In saying all that I think it’s important to have a web based boutique but also have a tangible shop front working in unison. In my shop I don’t have EFTPOS, I utilise my website as a payment system (credit card and pay pal) but the customer has the option for a discount if they pay cash. Saving me a significant outlay on a pay point operating system and also adds an interactive dimension to other wise standard shop. Customer sits down in the store, signs into the site, becomes member and then pays- with me helping them along the way.

I have found ecommerce to be a bit of a minefield, a little misleading and a lot of work with very little reward but I think it can work if you have the ability to marry your website with a actual store, somewhere customers can trust, touch feel the products for themselves and talk face to face with someone who cares. Maybe once I build that trust through my boutique they will feel more relaxed buying from my site.

Petticoat Lane ‘accessible affordable designer fashion’ I like that sound of that!

Your point two makes no sense to me. You wrote: Once an online retailer’s market is proven, it rarely disappears.

Are you kidding? Have you seen the dismal stats on eBay churn? On the number of businesses that are shuttered within three years? I have no clue what planet you are living on, but on this planet, your statement is horribly false.

Look – it isn’t a bad business model for a small company to sit on top of. It is, however, NOT a business for VC type returns.

To summarize the points I was making:

- European VC is overweight ecommerce vs US
- I don’t see massive M&A interest domestically
- Ecommerce tends to yield low margin businesses
- Scaling tends to be capital inefficient

I stand by all those. While I was not defending web apps against ecommerce, I would definitely like to see more visionary, “dope-smoking” European startups, as you put it.