Are huge marketplace seller aggregators a good thing for Amazon and retail?
A number of aggregators have arrived in recent years with a goal of acquiring third-party Amazon sellers and taking them to their next level of growth. Recently, many have secured funding themselves.
On Feb. 9, Thrasio announced it raised $750,000 in equity funding just after receiving a $3 billion valuation in a debt-funding round. Founded in 2018, Thrasio has acquired nearly 100 Amazon FBA (Fulfillment by Amazon) sellers, including Vybe Percussion massage guns, Circadian Optics therapy lamps and Sdara Skincare.
With the help of its marketing and analytics know-how, Thrasio claims brands typically see a 30 percent sales increase two months after being acquired. The firm also promises the benefits of economies of scale and back-office synergies.
“If you’re somebody who’s been able to build a couple-of-million-dollars business, there comes a day when you realize you need to manage a global supply chain, and a massive marketing effort, and your own creative team, and your operations, and your legal effort,” Thrasio co-CEO Josh Silberstein, told Yahoo Finance. “And the level of complexity required to do all of those things well at the same time is not the sort of thing that you can do with a three-person team.”
Other Amazon third-party seller consolidators securing funding since last fall include Perch, Boosted Commerce, Branded E-Commerce Group, SellerX, Heyday, Razor Group and Heroes. A recent Bloomberg article indicated that about 40 Amazon aggregators have emerged in recent years.
Branded E-commerce CEO Pierre Poignant said in his company’s funding statement, “Our team will provide unmatched operations, marketing, business development and supply chain expertise, serving as the partner of choice for entrepreneurs worldwide to scale their consumer brands and delight consumers on Amazon and beyond.”
“We’re in the early days of a tectonic shift toward marketplace commerce. Just as the last decade saw the rise of Warby Parker, Dollar Shave Club and other digitally native vertical brands, this decade will see the rise of a new generation of marketplace-native brands,” said Sebastian Rymarz, CEO of Heyday, in its funding statement. “Although the shift has been a boon to entrepreneurs around the globe, most still lack the capital, tools and resources to realize their full potential.”
- Thrasio Raises (Another) $750,000,000 – Thrasio/PRNewswire
- Thrasio Tops $1 Billion in Total Capital Raised, Secures $500 million in Fresh Capital – Thrasio/PRNewswire
- Branded Raises $150 Million in Funding and Acquires 20 Top-Selling Marketplace Brands – Branded E-Commerce Group/PRNewswire
- Thrasio, which buys up Amazon third-party sellers, has rapidly raised $1.75 billion – Yahoo Finance
- Thrasio raises $750M more in equity for its Amazon roll-up play – TechCrunch
- Berlin Brands Group to invest €250 million in acquiring Amazon brands – E-Commerce News
- Heroes raises €55 million to acquire and scale Amazon brands – E-Commerce News
- SellerX raises $118M to buy up and grow Amazon marketplace businesses – SellerX
- Heyday Emerges from Stealth with $175M Series A Funding to Accelerate Marketplace-Native Brands – Heyday/PRNewswire
- Perch Announces $123.5M in New Financing to Acquire Top Performing Amazon Marketplace Products and Companies – Perch/PRNewswire
- Wall Street Is Investing Billions to Scale Tiny Mom-and-Pop Sellers on Amazon – Bloomberg
DISCUSSION QUESTIONS: What do you think of the trend of aggregators acquiring and scaling up promising third-party Amazon FBA sellers? Is the consolidation of third-party sellers a positive or negative for Amazon and other online marketplace platform operators?