Flip Expands Business Model

Asian influencer Yifan Cai often deals with the challenges of skin issues, and has suffered from oil imbalance and acne due to work-related stress and travel. “Despite spending a lot of time and money on the vast number of products available in stores, sometimes what I buy ends up not being good for my face,” she acknowledged.

Nevertheless, Cai is optimistic that with the fast-paced development of social commerce startups that provide beauty consumers with authentic experiences, she will make better, more personalized, choices.

“I love that anyone on Flip can buy products and make reviews, and other app users can easily click on any product from a review, tutorial, or live show and have it drop into their shopping cart. Especially great for when you want to buy products from several brands and have them ship all together. I’m excited to see how this savvy online shopping companies can make skincare easier for everyone.”

Authenticity and interactivity are the trends that will drive modern social media, said  Noor Agha, Flip’s founder and chief executive. “There’s nothing honest on the internet anymore, and it’s impossible to know what is a good or bad product. Only users who have bought a product through its app can create video reviews, ensuring authenticity. My goal is to build the first radically honest commerce company in the world.”

Peter Philipp Wingsoe, CEO International / President of FL!P Retail and Partnerships, is equally thrilled to see how the business of social e-commerce shopping and the utilization of short form video content to sell products, services, and ideas have continued to expand. 

“While traditional brick and mortar are still a place where many go to shop and become introduced to new brands, however, with TikTok selling out products with just one video, it’s important to understand how companies can leverage this type of content to bolster sales – not just within that platform but through social e-commerce moments.”

In 2021, Flip raised $28 million in a Series A funding round led by Streamlined Ventures, a Silicon Valley-based early stage investment firm. The LA-based startup has had over 1 million downloads and works with over 280 beauty brands, including Fekkai, Hourglass Cosmetics and Jason Wu Beauty. They also offer everything from wellness to home goods, groceries and electronics, and will soon be further expanding into fashion and accessories. 

“We only work directly with brands whereas Amazon works with sellers, meaning there can be multiple sellers selling the same brand,” Wingsoe explained. “On the flip side, we only allow one brand to sell the product which is the brand itself. Therefore, while Amazon consistently faces hurdles in keeping counterfeiters off their platforms and fake merchandise from entering their warehouses, and constantly fight counterfeits as part of their efforts to crack down on organized crime on their platform, we simply only work with the brands directly, and thus circumvent this entirely.” 

Last year, the company expanded its business model by introducing Fulfilled By Flip, a revenue-sharing consignment model. “In the long term, it could become the platform’s dominant model. That’s ultimately the end goal; my closing rate on the program is about 97 per cent.”  

He continued: “I believe that, in the next five years, most large retailers will operate on consignment in the United States, especially as those retailers look to manage their businesses and cash flows during economic downturns.”

Across wholesale and consignment, Flip’s transactions have jumped over 600% from the beginning of last year. Its user base has risen by 500% in the same period.