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Specialist
Former Senior Executive at Thrasio Holdings
Key Inisghts
- Focus on industry profitability has prompted marketing investment trims – may likely be followed by 10-15% sales declines on top of 2022's already 20- 30% sales declines vs 2021
- While Thrasio's brand-agnostic model can cast a wide net by bringing different brands into its portfolio, it’s limited from cross-selling efficiencies that category- specific aggregators can leverage to bundle goods together
- "[A]ggregators that win ultimately have a combination of defensible technology, they have intellectual property and patents on their products, they either had a vertically integrated model where they actually owned manufacturing”
- Consolidation among aggregators makes more sense because “the issue [isn’t] the quantity of the brands, it’s the quality of the business operation and a cohesive strategy on the brand side.”
Questions
1.
What is your 12-18-month outlook for the Amazon business aggregators landscape?
2.
Considering your first point regarding the industry’s operational improvements and a move towards profitability being prioritised, how has that model potentially evolved? What exactly has been improved operationally? What was the model, what is it now and what’s to come?
3.
What’s a potential worst-case scenario for marketing spending? Assuming aggregators are being the most effective at using marketing dollars, what can the average aggregator potentially see from a top-line decline given a pull-back in marketing?
4.
Could you describe the Amazon business aggregator competitive landscape, highlighting specific players? Who are the leaders and laggards?
5.
What are the merits and drawbacks of aggregators either being industry-agnostic vs something more niche? You mentioned Thrasio, for instance, is industry-agnostic.
6.
What is the single-most important attribute that would make an aggregator the most successful? Is it being the best at marketing, or having the most supply chain prowess? What exactly should be the winner’s edge, or the key characteristic that will separate the winners from the losers?
7.
What do you make of turmoil at Thrasio, specifically the right-sizing of its employee base and everything that’s transpired up until the installation of its new CEO?
8.
What is your outlook for Thrasio? Do you find that, with some of the changes, including its new CEO, its outlook and viability as a sustainable business model has improved?
9.
Whose portfolio do you find to be best positioned, given so much expected turmoil or uncertainty in the economy?
10.
Recent press noted a decline in seller valuations, coupled with 10-20% less acquisitions vs 2021. What are your thoughts on valuations, and how might they trend in 2023? What is your broader outlook for industry M&A?
11.
Is today’s environment a good opportunity for consolidators to potentially shop around?
12.
Why does consolidation among the aggregators make much more sense to you in the medium term vs the aggregators picking up more brands?
13.
Do you think there will be any activity with the aggregators divesting brands? If the key isn’t having more brands to win, and maybe just tightening the screws on operations, do you expect that at all?
14.
If you were running Thrasio, what aggregators would you potentially go after, if we’re contemplating the scenario where consolidation among aggregators is the best approach?
15.
What excites you the most about the industry over the next 3-5 years, and what would be keeping you up at night if you were still involved?
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