Why Amazon Aggregator Thrasio Is Sticking With Ecommerce-Native Experts Over Legacy Vendors

Comic: New NormalIf you’re not in the Amazon business, you might not know Thrasio.

But it’s one of the largest, fastest-growing Amazon brand aggregators on the scene. The startup is essentially a holding company that buys and scales non-name-brand ecommerce products that are selling well on Amazon and consolidates them under one roof, in some cases acquiring them outright.

Last October, Thrasio raised $1 billion, bringing its total to more than $3 billion. That stockpile has helped the company amass more than 300 ecommerce brands, primarily focused on Amazon.

The new funding didn’t just go toward new acquisitions, however.

Last year, Thrasio began a process to evaluate potential SaaS media services and ecommerce consultancies that could help tie together the competitive Amazon marketplace data Thrasio uses to select brands to acquire.

These types of service providers can also help individual brands understand their own advertising and pricing strategies on Amazon, said Dan Parker, VP and head of data and analytics at Thrasio.

As the largest and best-known of the “Amazon aggregators,” Thrasio is no stranger to Amazon advertising and sales dynamics. But it can still be difficult to “think about a business problem and turn it into a data problem,” Parker said.

For example, what are the most attractive attributes for a potential product acquisition on Amazon? This is a business question.

But Thrasio needs to boil that down into different data sets and metrics that can be tracked on the platforms and tied to each brand, such as share of category and promotion placements, organic vs. ad click-through sales rates and metrics like Amazon’s Inventory Performance Index. The latter is Amazon’s metric for connecting visibility on the platform to supply-chain factors, including how efficiently a product can be packaged and shipped.

In January, Thrasio selected ecommerce consultancy Momentum Commerce to help with Amazon market intelligence. Momentum has data services on the Amazon marketplace generally, Parker said, but it also helps sellers with search and advertising services.

“The data that we use for targeting acquisitions in the marketplace and the data we use to monitor our own brands’ performance on the platform [are] flip sides of the same coin,” he said.

Momentum is a smaller and newer data and advertising vendor, but that’s necessary, said Parker, who pointed out that the problem Thrasio is trying to solve isn’t exactly in the wheelhouse of big agency holding companies or ecommerce ad tech.

“For a sophisticated player operating at scale on Amazon, a traditional media services firm isn’t going to cut the mustard,” said John Shea, CEO and founder of Momentum Commerce. “And working with a black-box software isn’t going to cut the mustard.”

But how might promotions on one platform, like Amazon, be affected by pricing on Walmart? And how does the pace of inventory availability and warehousing factor into the ability to forecast campaigns? These are familiar questions for Momentum Commerce, Shea said, but not for agency or consultancy services that weren’t born for ecommerce marketplace businesses.

Beyond Amazon, Thrasio is also adding retail and ecommerce expertise on other platforms. Parker, who was previously head of retail solutions for Wayfair, noted that Thrasio’s brands do sell on other marketplaces, such as Walmart, Target, Best Buy and even Chewy, the online pet retailer.

This dynamic encompasses what Parker calls “indirect ecommerce” – sales made on third-party marketplaces rather than the direct-to-consumer site owned by the brand.

Today, Thrasio’s sales and acquisitions are concentrated on Amazon, but the company plans to dig even deeper into ecommerce.

As Thrasio assembles its data and advertising infrastructure, it will continue to expand its focus on the particular data and expertise that’s tied to ecommerce marketplace dynamics.

“As we think about the future, we’re expanding the channels we operate on,” Parker said. “So we need a technology platform that’s built for and scales not only on Amazon, but to meet the dynamics across any major channel and marketplace.”

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