Comments 2

  1. Rishi- I’m assuming that they generate enough income through other channels to justify sending traffic elsewhere. You made me curious as to what’s driving this. Here’s my take on their strategy:

    1. They are in the business first to sell tangible, shippable products-at a great discount. They’ve built a name as the internet’s outlet mall.

    2. They make sponsored listings available – aka Google Adsense. Again, that means they are turning traffic away. But, if someone does follow the link they generate income on that click.

    3. They’ve added tabs for Real Estate, Autos, and Auctions. These are third-party sites, presumably providing referral fees. Again, they’re sending away traffic, but generating income on that click.

    4. They spend substantial money on advertising. Paid advertising can be highly targeted, but doesn’t necessarily account for intent-to-buy. What do they do with the visitor that doesn’t buy? They get an option to click a link to affiliate products-that also represents income.

    5. They sell annual memberships. Basically, they eat the shipping fees if you pay to opt-in to an email alert. Again, brilliant. Customers are paying for the email that Overstock sends through a natural e-mail marketing strategy.

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