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Investors pour $1bn into buying up small merchants on Amazon
- 19g 6y agonon-paywalled link: https://www.bizjournals.com/portland/news/2020/12/22/investors-pour-1bn-into-buying-up-small-merchants.html https://www.bizjournals.com/portland/news/2020/12/22/investo...
- kasperni 6y agoThat is paywalled for me as well.
- imperfectcats 6y ago1. Download Opera - https://www.opera.com/download https://www.opera.com/download - this avoids breaking anything with JS you need. 2. Turn off JavaScript in Opera. 3. Copy and paste the link.
- kasperni 6y agoNot sure why I would want to install a new browser to read an article? Edit: I appreciate the tip, I just think it is a bit excessive to install a new browser to read a single article.
- callumlocke 6y agoI think the commenter was just trying to be helpful.
- ricardo81 6y agoAgree. A quicker if not elegant alternative is to cancel the page load after the article appears. Typically works for any site that's using JS to hide/erase content already served.
- imperfectcats 6y agoIt works for most paywalls, NY Times being one I remember, so it is handy beyond one article. Likely there are a bazzillion reasons you can't optimise the current browser to turn off JS, and what are the chances anyone has Opera, and would find running it in JS off mode problematic? YMMV, but I think it is a lot easier to install a browser as a cheap, easy, JS free paywall buster than the alternatives.
- Koiwai 6y agoModern browsers can turn off JS per site, so you don't have to install Opera(or another secondary browser) for that.
- callumlocke 6y agoIgnore the negativity, your comment helped me.
- 19g 6y agoSorry - it worked for me. I'll opt for an archive.is link next time.
- yftsui 6y agohttps://archive.is/8vPXT https://archive.is/8vPXT
- beranabus 6y agoPaywalled articles shouldn't be permitted to post.
- siscia 6y agoIt makes sense in the physical world to consolidate a brand. It gives costumers an unified experience and slash costs with scale economy. I am not sure it is the same on the digital world. What it is the advantage of consolidate business that sell only digital? Especially if those business sell mostly through Amazon? Actually, consolidating, you are loosing the small niche appeal.
- ajb 6y agoI don't think this is about consolidating the brand. They want to be P&G, but no-one remembers which products are P&G products, they each have their own brand. This is a portfolio approach I think. So they will have some economies of scale and be able to swing more capital behind the products that turn out the most successful
- hef19898 6y agoPotential benefits I see are procurement, which would become cheaper. Logistics, which would become cheaper at scale not using FBA but things like Amazon's Seller Fulfilled Prime or Dropshipping. Also marketing could be centralized. Still not sure if a conglomerate like that would still be nimble enough at things like product selection and so on.
- throw14082020 6y agoAre these brands buying from factories, or are they factories themselves. I assumed it was the latter, because Amazon has helped make it so easy.
- hef19898 6y agoThere is a whole industry around white label sales. These Amazon seller are, as all good middle men do, bridging the gap between manufacturers and consumers. They use Amazon as a marketplace. The manufacturers benefit from earlier bulk sales, the merchants take the financial risk of inventory and the profits, and Amazon the fees.
- simlan 6y agoInteresting approach. Not sure if they can replace the lean operations of most FBA sellers with an integrated company without compromising the profitability. Also FBA at scale is not necessarily cheaper then running your own logistics.
- baybal2 6y agoI always considered that having dis-aggregated logistics was a plus for operating on marketplaces as online shop. It's not a given that Amazon can run logistics automation better than you yourself, or a 3rd party. At least in many countries other than USA, you would really need to have multiple logistics options for same products, and you almost always need that for cross-border.
- hef19898 6y agoAt scale, I would opt for a 3PL running logistics. Amazon is earning insane profits with FBA, at scale it is totally possible to not juts meet FBA prices but even getting close to Amazon's internal FBA costs. That would give you quite a nice margin benefit. It would be harder to ramp operations down so Using FBA, you just stop sending to Amazon. That is not counting the overhead needed to manage your "own" logistics.
- deleted 6y ago[deleted]
- lots2learn 6y agoNot true. FBA is not a profit center according to an Amazon employee I spoke with.
- hef19898 6y agoNo idea how prices are in the US, in Europe so they should have margins in excess of 15 - 20 %. Former Amazonian from operational logistics. Not saying their prices aren't competitive, for smaller volumes they very much are. Amazon is just milking their volume effects to a a max.
- habosa 6y agoI wonder what sort of due diligence is done on the business practices of these small brands. There are a LOT of scams on Amazon and to succeed in the marketplace many brands have to be willing to do some shady things (buying reviews, swapping listings, etc). At a small scale these scams are probably not worth it for law enforcement to worry about. But if a hundred brands are rolled up into a conglomerate, there's going to be a lot of scams under one roof.
- moltar 6y agoOn a recent Thrasio podcast they explained that they look at all financials. Which also includes purchasing third party services to ensure that businesses were not buying anything illegal or against ToS.
- pessimizer 6y agoThe benefit of rolling them up is to get away with all of this small-time fraud at scale (which has also indirectly been Amazon's model in general over the past half-decade through collecting rent from them.) The PR is that these funds are trying to be Unilever, but the reality is that they're trying to buy up a bunch of shady Amazon-only companies that are very profitable and consolidate their accounting, logistics, and marketing departments.
- varispeed 6y agoI have a feeling there is going to be more of that, as small businesses continue to struggle during the current situation and at one point they'll face having to shut down due to money running out and those small businesses will be up for grabs for literally peanuts. It's hard to not think about conspiracy theories.
- bealesd 6y agoCovid related conspiracy theories? I can't imagine any gain being worth the effort of this pandemic.
- ceejayoz 6y agoI don't think they mean "virus isn't real" conspiracies. I think they mean "Amazon has a vested interest in lobbying to weaken small business support in Congress".
- Swenrekcah 6y agoWhat sort of consiparcy theories? This is par for the course in any downturn. Those who've got assets gain more assets. Power in a capitalist society comes from assests, but assests are not taxed so the piles just keep getting bigger with little constraint. That is the fundamental problem in my opinion. Edit: Downvotes for disagreement or for politics? I'd have thought that commentary on asset consolidation was acceptable in a thread on consolidation, but OK.
- varispeed 6y agoThe problem is that the current downturn is artificial and wealthy people are behind the wheel, who happen to have assets to either buy the nice falling businesses or let them sink so there is less competition for their big cos.
- Swenrekcah 6y agoThe virus is not artificial. The diease is not artificial. The deaths are not artificial. The overloaded health care systems around the world are not artificial. You may believe that the measures taken are overreactions, you'd be wrong though. The downturn is not artificial. But as I said, of course people with assets take advantage, anytime there is a downturn. Edit: More downvotes, no discussion. Oh well. Merry Christmas :)
- napier 6y agoFascinating article. Here’s an unpaywalled version that’s readable in any browser and doesn’t require tuning of your JavaScript settings or reflexes: https://archive.is/8vPXT https://archive.is/8vPXT
- libertine 6y agoOh shit... am I the only one who thinks this can backfire in a very bad way? Like bubble popping material? I mean, they can't do what P&G, Unilever, Mars, and many other umbrella brands did. It's just impossible, and the reason is simple: they can't have the share of voice and share of shelf these companies had, and that allowed them to be what they were. They didn't just had a big portfolio of brands, they were literal bullies that left no room for competition, and they had built brands so strong - through buying millions upon millions of GRPs, through years, in a time where TV was the king of mass media - that they pushed their weight on retailers and won a lot of share of shelf (literally saturated shelves). The times have changed, this doesn't work anymore. Now brands are more diluted, it's mainly built on small niches, consumers attention is extremely fragmented so you can't monopolize media space, and the weight lays on Amazon and retailers, not the other way around...
- maxerickson 6y agoA billion dollars is lots of money, but it isn't really a big deal for the broader economy.
- libertine 6y agoI didn't mean "bubble popping" in the sense of crumbling an economy, I meant in these circles of investments. Sorry for the misunderstanding. I'm pretty sure they are not the only ones, this probably has a long tail of companies doing this. Edit: but this could be a sign that a lot of these "gamble-like" investments could be taking place... and might be a symptom of something bigger.
- dublinben 6y agoIt's a symptom of capital running out of better places to chase a return.
- antoniuschan99 6y agoA friend told me a few months back someone he knew started selling hiking poles on Amazon (sourced from alibaba too) and sold it to some investor for a cool 3 million. It makes sense now . She was selling well, but was wondering who would approach her to buy her business.