Our first reaction to Farfetch raising another $110million taking its total funding to $300million was - WHAAAAAT?
The company is a retailer without stock and operate as an advanced affiliate network connecting buyers with stores & brands. It earns about 25-30% in commissions on the sales they generate which is much higher than standard affiliate schemes, where anything up to 10% is considered good, and would resemble more of a department store with concession shop-in-shops where up to 40% commission on sales is not unheard of.
However, Racked (link below) reports that much of the $110million will be used to develop the company's ecommerce software targeting brands in a similar way to Net-A-Porter|Yoox are doing. This could make sense. A lot.
Additional note: FT.com reports that 12% of the company's revenues come from China and that money raised will be used to expand the company's Asian operations.
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- Tags: Affiliate, Cart Software, China Fashion Market, Department Stores, ecommerce, Farfetch, Fundraising, Net-A-Porter, retail, Venture Capital, Yoox