chart-of-the-day-flash-sales-site-traffic(1)Business Insider featured the flash sales space in their Chart of the Day on Friday (October 11, 2013). The above chart is bad news for sites like, which recently raised $165Mil at a $1Bil valuation (total funding: $336Mil).’s earlier fundraising and the beginning of their move away from flash sales was documented in this previous post: + $105Mil: No Longer a Flash-Sales Site. Business Insider also confirms this move in their analysis of the above chart. still has one of the best shopping experiences on the web. But it appears they may need to broaden their selection away from “design friendly”, sometimes gimmicky, products to deliver on their $1Bil valuation (i.e. an exit >$3Bil). has ~5% the unique visitors of Zulily (Compete, August 2013), which will IPO later this year. Zulily recorded $331Mil in sales during 2012 and has recorded $272Mil during the first 6 months of 2013. Assuming Zulily turns $750Mil in sales in 2013 then their end of year valuation will be around $1.5-2.6Bil, using bullish P/S multiples for retail (2×-3.5x).

In response to the above chart Fab’s PR team mentioned “In e-commerce, especially at Fab, it’s about quality of customers, not quantity. And we are VERY happy with the quality of our customers (they’re buying, repeatedly).” While this may be true, some simple assumptions make it hard to believe that the lifetime value of a customer is dramatically higher than a Zulily customer. For example, moms are known to be stickier customers than “design friendly” customers.  Also, it is hard to believe that’s contribution margin is massively higher than Zulily’s, which it would need to be based on the above traffic numbers. In line with the above traffic data, Zulily reports they have 2.2Mil customers, which spend an average of $210 per year.

Looking forward to watching how this space unfolds over the next 12-18 months.