Comment made on Adam Keesling’s post:
https://napkinmath.substack.com/p/want-to-become-a-unicorn-buy-it-dont
This is a very interesting piece. I didn’t even know thrasio existed!!!
Neither did I know what a roll up is, and I have so many thoughts!!!
A lot of future projections will depend upon who thrasio defines as a “customer”. Is the end user purchasing the products or is it small businesses? Will thrasio be satisfied with being the person who gets small businesses on Amazon and will not micromanage the relationship between small businesses and amazon?
For now, thrasio’s mission statement is “Our mission is simple: to become the largest and most profitable selling group in the Amazon ecosystem”. So let’s roll with it and say that thrasio wants to sell everything and wants to be *the* seller.
So once it is the larget seller in amazon’s marketplace, will it play nice?
Thrasio can also stand up to amazon’s rules and say “Well we’re not going to do that”. It might be easier for amazon to set rules for small businesses and dictate the terms, but it will find it much harder to control a conglomerate like therasio. This will threaten amazon to loosen its grip on its own marketplace. Amazon will not like that.
Another scenario is, Thrasio can take the quality up a notch for these producers and add a thrasio stamp of approval go to other advertising channels and say “only buy thrasio products”. This will again devalue amazon’s own products. If thrasio manages to build a brand and a loyal following of ultimate end users and finds a channel to acquire more users: the buyers, it can also move them to other platforms, like you mentioned shopify. But it can also move it's selling to other respective niche platforms such as wayfair, wish etc. For all we know, it can start its own marketplace. In the end it all depends on who thrasio wants to be and who it wants to please.
I suppose to answer all this, we need to answer the question why does it want to become the most profitable selling group?
Thrasio can just play nice and not interfere in the relationship between amazon and small businesses. But then who buys so many businesses to just let them be and just say we own x businesses :P
On a side note, one of their lines is “We want you to be free from the burden of ownership”. This is very interesting since things like shopify and stripe let you own your own businesses. I thought the trend was towards *enabling* ownership. If our current trend and services are towards enabling ownership, this means we are building a highly fragmented market which will saturate soon, so then roll-ups will be common. If thrasio does it right, because it might just be way more easier to implement a roll-up with non brick and mortar networks like ecommerce, then we will have many more roll-ups following the “thrasio” model.
I cannot decide if that is a good thing or a bad thing, but then this is my first introduction to a roll-up so maybe it is just me haha. Anyone has opinions on whether roll ups are good or bad?'
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Additional comments:
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Is the amazon marketplace a group of frustrated sellers whose products have reached saturation and just want an easy way out? In that case, isn’t it a missed opportunity for amazon. Thrasio has a very explicit “we will own the means of production” vibe to it, but then this is my first introduction to roll-ups so maybe it is just me haha.
For some reason, this reminds me of when corporations came in in India and told the farmers “We will give you xxx for the land. We will take it off your hands” and then they reaped way more benefits from the land.
It’s seems a cyclical cycle of fragmenting -> rolling it up -> fragmenting it from the second middleman (roll up 1 monopoly) -> rolling up these other fragments and so on….
so then what is the point of airbnb allowing people to give their homes. If a company is going to come along and say well we will be the middleman between you and airbnb you dont worry about your house at all.
Note that in this scenario, the roll up is assumed to be valid for a consumer industry (where each consumer is a business owner of a very small business: like the spare bedroom)too, but perhaps in consumer industries, roll ups would be awfully expensive. but what about businesses on shopify? sellers on wayfair? they can certainly be rolled up. Can etsy and ebay sellers be rolled up?
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