How does Reebonz.com get and sell luxury brands at a discount?

The 'Outlet Store' Model The business model is similar to how outlet malls work. Brands sell excess inventory at discounted prices at outlet malls because they are typically located very far away from premium retail stores. This prevents them from cannibalizing sales that would otherwise happen through the premium channels. Basically, you will enjoy the low prices only if you're willing to go the distance to get the item. Brands know that a buyer who shops regularly at outlet malls is unlikely to be the same buyer who shops with the same frequency at the premium retail stores along Orchard Road. It is a smart way for brands to capture customers at both ends of the spectrum. Reebonz pretty much plays the role of an outlet mall, but online. Since geographic proximity is not a limiting factor when you're shopping online, demand is instead created by limiting time (what the industry calls flash sales) and limiting inventory. By adding coveted, luxury items to their product mix, Reebonz makes the wait even more worthwhile. Additionally, Reebonz requires users of the website, to sign up. This is golden: it creates a membership base for itself and valuable data for the brand about the buying habits of its customers. Procurement & Sales Reebonz seems to do a great job of finding and building relationships with these luxury brands (I believe it also works to their advantage that the closest brick and mortar luxury brand outlet to Singapore is in Johor (I'm not counting IMM which has only agnes b. and Coach)) so people take what ever is the closest alternative. Reebonz's strategy is to purchase slow-moving and unsold inventory from brands at discounted prices. When both parties agree that the inventory is slow moving, Reebonz will look to get 20% to 60% off the retail price. These brands will then send to Reebonz, a report of the available inventory that is currently not allocated to fulfil any other orders, simultaneously blocking out the inventory for sale as agreed by the two parties. The role Reebonz then plays is to promote the sale, and through that, the brand. When a sale ends, Reebonz places a purchase order to the brand based on the orders they have received payment for, gets the items from the brand, and ships it out to the buyer. Margins Brands end up letting go of their inventory at 40 to 50% less what would be the item's retail price at premium outlets. But they'd rather that than have it stock up in the warehouse. Especially since they're a luxury brand, there is a greater impetus to keep moving stock so as to make way for the next season's collection. Reebonz takes its cut by marking up based on the discounted price that was offered to them by the brand. As an example say a bag costs $100 at the retail store at ION and the brand is willing to offer it to Reebonz at $50. Reebonz will mark it up to $70 and will say "Bag X at 30% off retail". As a buyer, you get 30% off a luxury item. Reebonz makes $20 on the sale. The brand moves its inventory and gets cash back. win-win-win!

Just like other flash sale based sites, they purchase stock from brands and/or stores that have leftover stock at discounted prices when the season is over. Because of that they are able to offer a discount off of the retail price while still making some profit on it.