November 15, 2011, 3:53 PM

Fab.com reaches 1 million members in five months

The members-only flash sale site gives all customers $10 off this week.

Lead Photo

Fab.com used Facebook ads and aggressive discounts to attract shoppers.

In just over five months after its launch, flash sale retailer Fab.com has snagged 1 million members, with 250,000 added in the last month alone.

 “Positive word of mouth from our members and an extraordinarily high rate of social sharing on sites like Facebook, Twitter, Tumblr, and Pinterest has been fueling our growth,” Fab.com founder Jason Goldberg writes in a blog post this week. “That, and our commitment to presenting daily ‘wow’ products that people get excited about and want to tell their friends about, are the reasons behind our hitting 1 million members in just five months.”

Prior to Fab.com’s launch in June, the retailer rolled out several ads on Facebook. The site launched with about 175,000 members, 50,000 of those coming from the ads, Goldberg says.

Fab.com also give rewards for customers who get their friends to join too, including a $30 credit for 10 friends that sign up, another $30 for 25, and free shipping for two months if shoppers get 50 friends to join.

The retailer traces 50% of its membership back to social sharing, Goldberg adds. And of the four million monthly visits to Fab.com, about 54% come from daily e-mails to members, Goldberg says. 28% of visitors go directly to Fab.com, about 10% come from Facebook and 2% come from organic search results on Google; the remaining 6% come from various other sites, including Pinterest, which describes itself as an online pinboard where consumers share information about favorite products.

In an e-mail to all members Monday, the retailer, which sells items from a range of categories such as household goods to toys and apparel, included a $10 gift certificate that shoppers could use within 24 hours.

Fab.com says its 30%-per-month sales growth has not come without its challenges, however. “We’re processing tens of thousands more orders per month than we ever expected to at this point in our lifecycle,” Goldberg writes. “As you might expect, that has created operational issues and challenges galore, as we’ve been doing our best to get people their favorite design stuff as quickly as humanly possible.”

The retailer says it is investing millions of dollars into improving operations and expects to add one- and two-day shipping options in the next few weeks.

Artwork is by far the top-selling category on Fab.com, Goldberg says, representing 14% of sales. Apparel and accessories is the second-highest selling category, with just under 10%. Jewelry represents about 6.5% of sales, and bags and novelty items each make up about 5%.

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