In its second-largest acquisition, Amazon buys the company for $970 million.
SmartBargains.com, a pure-play liquidation site, expects to be profitable in its second year by targeting the right consumers online.
18-month-old SmartBargains.com expects to reach profitability in this, its second, year of operation, CEO Carl Rosendorf tells Internet Retailer, and on a marketing budget that’s 100% devoted to online efforts–-no small feat for a pure play with no catalog or brick and mortar presence. Pay-for-performance affiliate marketing and an aggressive e-mail campaign are key to Smart Bargains’ strategy, and they helped boost traffic at the Boston-based firm from 400,000 last July to 4 million three months later, says Rosendorf.
Smart Bargains has a steady supply of high-end brand-name merchandise as an online outgrowth of Gordon Brothers LLC, one of the largest retail liquidators in the country, and at up to 80% off. At those prices, the goods sell themselves; Smart Bargains` only challenge is getting them in front of the right online consumers, Rosendorf says. With a previous seven-year stint at Barnes and Noble, during which he engineered bn.com’s foray into affiliate marketing, Rosendorf bought an understanding of affiliate marketing to the program; he’s contracted with affiliate services provider Be Free Inc. to do the rest.
"Our growth happened because of affiliate marketing and an aggressive e-mail program," says Rosendorf. "We use Be Free`s tracking and reporting to help us determine the best affiliate sites, the best placements with the sites, and what creative works best to maximize conversions."