New business model. Bring together and accelerate consumer product brands in Amazon FBA environment (Fulfilled by Amazon)
Strong growth of the Amazon FBA segment
Around Amazon, with an annual sales volume of about 400 billion USD and growth of +38% vs. last year, it is normal that new business models be generated. “He who a good tree is still, good shadow shelters him.”
Amazon’s segment of third-party services achieves its highest growth and profitability. Thousands of small businesses offer their specialized products by leveraging Amazon’s commercial and operational coverage that receives a commission for its services in return.
In many cases, it is successful small entrepreneurs who are behind these companies and who encounter sustained growth and profitability issues from some billing thresholds. Their revenue is often concentrated on a class-leading, privately branded individual product with 90% of the sales through Amazon.
Thrasio. Growth and profitability for a unicorn. Unusual
Thrasio, created in 2018, is a clear example of a company growing at high rates and with positive operating results. Unusual exception in unicorn typology with a valuation of more than USD 1 billion. It is focused on identifying, acquiring, and improving consumer product brands marketed primarily through Amazon FBA.
Thrasio does a detailed job of identifying and selecting candidate brands for their acquisition and subsequent commercial and operational improvement thanks to their super specialization in the Amazon environment.
In its first two years of existence it has acquired 40 brands with incomes between 1-40 million USD in categories as disparate as home, kitchen, leisure. Among these brands are: Angry Orange, Best Gear, Creative Space, Maxim Fitness, Coffee Gator, Trail Buddy Poles…
Apply effective business and operational improvements after acquisitions.
To materialize these acquisitions Thrasio has reviewed 400 candidate brands with an advanced and well-shot Due Diligence process.
Once within their portfolio, their own marketing and operations teams make improvements by applying a proven tool kit in just 35 days in areas such as:
- Positioning within Amazon, consumer ratings and comments
- Content and visual communication tailored to the Amazon environment
- Packaging
- Product design
- Range reduction
- Product Sourcing
- Expansion to other international markets where Amazon has a significant presence such as the UK, Germany, and Japan
The results are there and Thrasio already has a total annual revenue of more than 500 Million USD doubling every 73 days its turnover. Still far from the size of large consumer product conglomerates such as Procter & Gamble and Unilever that through acquisitions of individual brands and supported by strong traditional advertising investments managed to occupy end caps in large retail chains.
Replica effect. Clones in action
Thrasio currently has 700 employees and its high growth rate generates a wide range of vacancies (+240 positions in February 2021). The type of functions and profiles required are revealing the company’s priorities and contrast with the current structure of many retail chains. We recommend visiting their WEB Thrasio Jobs.
Thrasio’s acceptance among investors has been very good (including Advent as the main player), achieving a total of USD 900 Million in 6 rounds of funding.
The replica effect is fast and there are already clones of this type of business in both the USA and Europe. Among them are: Perch, Heroes, 101 Commerce, Razor, Seller X, Brands United….a whole new generation.
Selling on Amazon is “easy”. Growing and doing it profitably is difficult. Looks like Thrasio is in a good position to achieve it. Like any challenge, it is not without difficulties ahead including the heavy dependence of an innovative giant like Amazon.
Más info: carlos.dominguez@mheconsumer.com
www.mheconsumer.com
