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The Revolutionary Business Model of Farfetch: Changing the Face of Luxury Fashion

Farfetch: Changing the Face of Luxury Fashion

If you’re an avid follower of luxury fashion, you’ll know that Farfetch is one of the leading online marketplaces for all things chic and stylish. From clothing and accessories to shoes and beauty products, Farfetch is a one-stop-shop for anyone who appreciates the finer things in life.

In this article, we’ll delve deeper into the world of Farfetch, exploring its business model, product offerings, and company history. Farfetch Overview: Amalgamation of Physical and Digital Retail

Founded in 2008, Farfetch is an online luxury fashion marketplace that harmonizes physical retail stores and e-commerce businesses.

Acting as an intermediary between buyers and sellers, Farfetch offers an extensive range of high-end fashion products from more than 3,500 brands and over 700 boutiques worldwide. This allows consumers to access over 300,000 unique products from the comfort of their homes.

Farfetch employs a commission-based business model where it charges a fee to its partner boutiques and retailers for every product sold and handles customer service and shipping. This leads to a win-win situation for buyers, sellers, and Farfetch itself since the platform does not need to manage any inventory, and sellers can reach a global audience without investing in their e-commerce infrastructure.

Farfetch Platform: Physical Stores and Verification Process of Boutiques

Unlike other e-commerce sites, Farfetch has a unique feature that distinguishes it from the rest. Farfetch has integrated physical stores into its business model, collaborating with luxury boutiques to bring their offerings online.

This creates a symbiotic relationship between online and offline retail, modernizing the concept of retailing for both buyers and sellers. Farfetch currently offers eight product categories including women’s clothing, men’s clothing, kid’s clothing, beauty products, jewelry, watches, homeware, and lifestyle products.

These categories are then broken down into subcategories to enable customers to quickly find what they’re looking for. To maintain the authenticity of its products, Farfetch has a rigorous verification process that boutiques must undergo before joining the platform.

This process ensures that sellers offer only genuine luxury goods and customers can shop with confidence. Only boutiques that meet standards and demonstrate a history of high-quality products and customer satisfaction are accepted onto the platform.

Farfetch Company History: The Vision of Founder Jos Neves

Farfetch has been the brainchild of entrepreneur Jos Neves since its inception. Neves has a background in computing and economics and is an avid lover of fashion.

He founded his first business, Swear, at the age of 21, which was a footwear label that allowed customers to mix and match the designs. Later, he set up his own retail chain, B Store, which catered to contemporary labels from around the world.

In 2008, Neves launched Farfetch, which would later become a pioneer in the luxury e-commerce industry. The early years were challenging, with the global financial crisis hitting the company hard.

However, with the influx of funding from venture capitalists, Farfetch quickly regained its footing. The platform began expanding through partnerships with luxury brands, retailers, and emerging designers.

Farfetch has been a leader in the industry ever since, continually innovating and paving new ways for luxury retail to thrive both online and offline. The platform went public in 2018, with a market value of $5.8 billion, cementing its position as a major player in the luxury fashion world.


In conclusion, Farfetch is a prime example of how the integration of physical and digital retail can lead to a mutually beneficial business model. Its commission-based system, incorporation of physical stores, and rigorous verification process, all contribute to an excellent customer experience that has pushed the brand to the forefront of the contemporary luxury fashion industry.

Farfetch was founded on a vision of merging fashion and technology, and today it continues to be at the forefront of the digital revolution in retail. Farfetch: Revenue Streams and Financial Performance

Farfetch has evolved continuously over the years since its founding in 2008, expanding to become a multi-channel luxury fashion platform.

Its innovative business model, which focuses on merging physical and digital retail, has paid off handsomely, translating into a successful financial performance. In this section, we’ll take a deep dive into Farfetch’s various revenue streams, funding history, and financial performance.

Farfetch Revenue Streams: Commission Sales and Fulfillment Services

Farfetch has two primary streams of revenue: commission sales and fulfillment services. The commission-based income model is the backbone of Farfetch’s financial success.

The platform charges boutiques and retailers a commission fee on each product sold, usually ranging from 20% – 25%. This model allows Farfetch to earn a percentage of every transaction that takes place on the platform, creating a win-win situation for all parties involved.

Farfetch’s fulfillment services are an additional source of revenue. Under this model, the platform stores products from boutiques and retailers in one of its warehouses, providing storage, packaging, and shipping for participating brands.

This service is particularly beneficial for smaller boutiques and retailers that do not have the resources to manage their order fulfillment processes or sought-after brands looking to expand their reach. Farfetch also provides white-label software solutions, allowing brands and retailers to create their online storefronts on Farfetch’s platform and utilize its proprietary technology.

In-Store and Online Sales and Wholesale Distribution of Products

Farfetch’s sales channels largely depend on whether the products are managed by the company or sold by boutiques and retailers. For products on online channels, sales are transacted through the website or app, while for in-store purchases, sales take place in the physical stores of participating boutiques and retailers.

Farfetch also operates a wholesale distribution model with designated retailers to drop-ship luxury goods directly to consumers. In this model, Farfetch facilitates the distribution of products to authorized retailers, reduces overheads for participating brands, and broadens the scope of the services offered by the platform.

It’s worth noting that a crucial component of Farfetch’s sales strategy is quality and content. The platform relies on high-quality images, product descriptions, reviews, and customer and market insights to stay on top of the competition.

Thus images captured from multiple angles, detailed product descriptions, and ratings and reviews are vital for brands in terms of search engine visibility and customer satisfaction. Farfetch Funding History: Total Funding Raised and Notable Investors

Since its establishment, Farfetch has enjoyed significant funding from various sources, enabling it to expand and thrive in the ultra-competitive luxury retail industry.

The company has raised over $2.6 billion in funding to date, much of which is from prominent tech investment firms such as DST Global, Insight Partners, and Index Ventures. Farfetch has also amassed a notable list of strategic investors, including Kering, which owns prominent brands such as Gucci, Yves Saint Laurent, and Balenciaga.

Farfetch’s IPO Valuation in 2018 and Financial Performance in 2020

In 2018, Farfetch went public, with an initial valuation of $5.8 billion, which sent out a message that the company was ready to compete with major players in the industry. Despite the challenges posed by the COVID-19 pandemic, which were severe, seriously damaging the luxury sector, Farfetch’s revenue performance remained robust and grew by 63% YoY.

The company’s recent Q1 2021 financial report showed that the platform had achieved an eye-catching growth rate of 46% YoY.

Today, Farfetch has a market capitalization of over $18 billion, marking an exceptional increase in share price.

As online shopping became a necessity in the COVID-19 era, the platform has seen tremendous growth in online transactions. The company’s ability to capitalize on the shift to online shopping during the pandemic has contributed significantly to its positive financial performance.


Farfetch’s innovative business model, which combines physical retail with e-commerce, has proven to be a game-changer in the luxury fashion industry. The platform’s success has relied heavily on its various revenue streams, notably commission sales and fulfillment services.

Farfetch has received significant funding, and its financial performance has remained robust despite the ever-changing, and indeed challenging landscape of the luxury fashion industry and the pandemic’s impacts on shopping behavior in general. It is clear that Farfetch continues to be at the forefront of luxury fashion retailing, with an excellent track record of innovation and strong performance, making it a go-to platform for discerning buyers seeking quality and authenticity.

Farfetch is an online luxury fashion marketplace that has modernized the retail industry with its innovative business model. The platform’s success can be attributed to its unique revenue streams, commission sales, and fulfillment services, as well as its integration of physical stores into its business model.

Farfetch achieved notable financial performance despite the impact of the COVID-19 pandemic, with revenue growth and a current market capitalization of over $18 billion. The platform’s robust financial performance has made it a go-to platform for discerning buyers seeking high-quality and authentic luxury fashion products.

Farfetch has revolutionized the luxury retail industry by merging physical and digital retail and is a game-changer that has set an admirable example for others in the industry to follow.

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