An online private shopping club is a members only shopping club, where members can buy goods at high discounts.
Private shopping clubs organise sales events for its members that typically last 2 to 6 days.
Because they are private a user has to be invited and only after sign up users can see the goods and services on offer. This also helps to protect the brand owners' distribution channels, brand and price points.
True private shopping clubs source their products only directly from the brands and don't buy liquidation stock from retailers.
To become a member, one needs to be invited by another member or get waitlisted to get membership. Membership is free. There are a number of eCommerce websites where users have to sign up to be able to buy products at high discounts. Popular examples are overstock.com or ebay.com. However, they don't fulfill the by invitation only criteria and therefore are not classified as private shopping clubs.
Private shopping clubs operate across various categories (fashion, travel, electronics etc.) and segments (Premium brands, bargain basement, Gen Y, Gen X, etc.).
In 2009 the leading US shopping club Gilt Groupe raised 40 million in funding from General Atlantic and Matrix at a valuation of $400m. Russian online shopping club KupiVIP.ru raised $20 million in funding in venture funding led by Accel Partners and joined by prior investors Mangrove Capital Partners, ARLAN, Direct Group.