Negative Working Capital at Gilt Groupe

I’ve written previously about negative working capital at Amazon.  Well, here’s an answer and nice illustration on Quora about negative working capital at Gilt:

It’s a brilliant model, they run the sale and collect cash immediately on purchase.  Based on Sales, they purchase only what was sold nearly eliminating their inventory risk.  Additionally because of their credit terms, they are holding cash at the market rate of equity for the 15-20 days (assume 5 days for shipping) – a killer benefit for them.