What I like about Zlio is its straightforward positioning, which they've only recently changed. Zlio.com originally opened in November 2005 in France as a "recommendation service". Their positioning at that point was: "Recommend your favorites products to your friends and make money". Zlio CEO Jeremie Berrebi told me they got "thousands of subscribers" but it was very difficult to manage and maintain - users would recommend once, 2 times, 3 times, but after seeing that they only made a few Euros, a lot of users didn't want to use the service anymore.

So in September 2006 Zlio totally changed its market positioning - now Zlio is a service that "allows any internet user to create his own online shop even if they have nothing to sell."

Usability

Zlio has a nice wizard-type sign-up process. It took me just a few minutes to sign up, select a template, and 'open' my store. The control panel for adding products is slick and easy to use. My one complaint is that I couldn't see any way to add bulk products, or a whole category. I had to individually add each product, which is time consuming. It would be great if I could tell Zlio to add "all microsoft office products" or "all Apple iPod products"; even better if I could say "add any Apple iPod product that has at least 4GB of memory" etc.

There are also some useful promotional tools, such as creating a video to show on "Zlio TV" and a widget to display on your blog. There's also an area called "boosting tools", which includes a wizard to help you copy your store into your blog.

Business Model

Zlio has two business models: CPA & CPC (in France). For the US launch, it is CPA only for now - but CPC will be introduced in the US soon. The CPA model means that when someone buys a product through a shop, the shop owner makes money via a commission (they are paid through PayPal). The company is based in France, but half the team is in Israel and they are planning to open a US office in the coming months.

Conclusion

All in all, it's a nicely designed app and very well positioned in the market. It kind of reminds of Swickis, which are custom search engines. Having a niche custom online shop will be an attractive (and possibly profitable) proposition for a lot of people. It nicely plays into the need for specialized and focused online properties, which are increasingly the success stories on the Web. In other words, if I am a Woody Allen fan then what better way to shop for his products than on a dedicated Woody Allen shop? So I like what Zlio enables and I'll be watching to see how much uptake it gets. Also I need to work on that R/WW shop! :-)