Is the recession business model an e-business model? How about buying a strong brand with a million-name mailing list and an established URL? You create a business with no retail overhead and outsourced fulfillment. A business built around marketing known products on the internet?
Recession Business Model
That is the recession business model described in Cleaned Sheets, by Rob Walker, from the magazine section of the New York Times. The brand is Linens and Things, where purchasers of its trademarks have re-launched using exactly this strategy:
“The proposition of this distinctly Great Recession model is snapping up a valuable asset on the cheap and using the low-labor tools of Web commerce — outsourcing, electronic ordering, etc. — to simulate a version of the original business.”
The key, according to buyers — a partnership of Gordon Brothers Brands and Hilco Consumer Capital — was a very loyal customer base and super-strong mailing list.
The new biz is being marketing with paid search and targeted email. The owners also anticipate additional revenue streams from private labeling of other retailers products and “store-within-a-store” sales.
Slick, isn’t it? Of course it costed a cool $1 million to buy the Linens and Things brand. But surely the concept can be replicated with other, less-pricy brands.
Is this “where the world is going,” as Gordon Brothers’ Craig Venezia suggests?
What Do You Think of This Recession Business Model?
Please give me your take in a comment.
