Zlio raises $4M for online shops, defies Amazon

Paris-based Zlio, a company that helps you easily create your own web page “shops” to sell merchants’ goods online, has raised $4 million from Mangrove Capital Partners.

See our previous coverage here.

The site now attracts more than 2.5 million unique visitors per month. More than 100,000 shops have been created — double the number of shops it had in March — according to chief executive Jeremie Berribi. Zlio provides a simple tool for you to pick a “shop” name, choose a template and select products from a catalogue of merchant products, for example an iPod or a book. Then, you can choose from a wide range of merchant’s goods to resell on your own site. Here’s a sample site, for scuba gear:

Zlio creates makes money through revenue-sharing with merchants and users. This is a way for community sites, such as forums and blogs, to make money: They can pick and choose merchant products most relevant to their readers.

Amazon apparently banned Zlio in May, upset about its policies: Zlio was making half its revenues through Amazon as an “associate” partner, where it referred users to buy things at Amazon and received a fee. Additionally, Zlio had been providing rebates to users (splitting revenue with users is part of its model). However, Amazon’s terms don’t allow partners to return referral fees to users. The Amazon-to-Zlio ban letter, via Mashable:

It has come to our attention that you may be paying some of your referral fees back to customers as a form of rebate. While we are certain that your idea would meet with some success, we have decided against working with any Associates who employ this rebate model.

A similar idea about online merchant-stores popped up during the (first) Internet bubble: Sequoia-backed Affinia.com. That company imploded, as this “site explains, pissing off thousands of loyal customers.

When we wrote about Zlio in March, Berribit told us that he was looking to close a $3.5 million round in April. Two months later, a half a million dollars more, a ban from Amazon — and some solid growth. Congratulations.