SkyMall: The Ultimate Catalog Business Model

The New Model

In 1994, “Worsley the Accountant” did an analysis of the business created by “Worsley the Entrepreneur” and determined that if SkyMall were to succeed, a dramatic change in the business model was needed. First off, he went to his airline partners and told them that the 20-percent commission was simply too high. Instead, he offered them somewhere around one-third the amount and promised to charge less for the merchandise, which would result in higher sales volume. Next, he scrapped his network of warehouses and let his catalog partners drop ship and take their own returns. Hammacher Schlemmer, which had the largest number of pages in the book at the time, helped the SkyMall team with paper purchasing and order processing. As SkyMall acquired more catalog partners, Hammacher Schlemmer’s presence lessened, but it remains a dominant player.