VC Firm Brings Partnership Model To Amazon Sellers - pymnts.com

VC Firm Brings Partnership Model To Amazon Sellers - pymnts.com


VC Firm Brings Partnership Model To Amazon Sellers - pymnts.com

Posted: 14 Sep 2020 08:01 AM PDT

There are more than a few mind-blowing stats about Amazon, most of them having to do with its 44 percent of the eCommerce market, or maybe the $88.9 billion in revenue it booked during the second quarter of 2020. But not so much is known about the world of Amazon sellers. Here, too, the numbers are staggering: Amazon has more than 2.3 million sellers currently active on its marketplace. There are roughly 25,000 sellers on Amazon with more than $1 million in yearly sales, and 200,000 sellers with more than $100,000 in sales. Every year, more than a million new sellers join Amazon.

It's a world where the parent company has such as tight rein that one step out of the guidelines and regulations can merit a devastating suspension. And it's a world where a new competitor, or even a dozen of them, can pop up overnight. In short, it's a world where access to capital and legal advice is welcome. And that's exactly the kind of bet that a unique kind of venture capitalist called AccrueMe is bringing to Amazon sellers. In mid-August, the company announced that it will infuse $100 million in capital into the Amazon seller system, along with legal and marketing advice.

AccrueMe Co-founder Donald Henig told PYMNTS that the company's finance model is unique in that sellers receive capital to grow their business through an investment model. Instead of giving sellers a loan as a bank would, the firm invests money directly into the business as a partner. AccrueMe makes money when the business makes a profit, earning 50 percent of the investment at a time. The firm participates in the risk, while the seller, according to Henig, benefits from the lack of short-term sales pressure.

"I didn't like the industry that I saw, as far as training people on Amazon," Henig noted. "So we looked at the financing end, and then all of those lending options. Some of those options had great marketing and sounded good, but they just didn't work for the seller. So, I thought, why don't we partner with the seller?"

From AccrueMe's vantage point, funding through a partnership instead of a heavy debt load can free up Amazon sellers to focus on growing their business. With double the capital, sellers can purchase inventory with higher margins, thereby becoming a stronger competitor and maintaining enough of a balance to capitalize on a greater rate of buying opportunities. And with no consistent payments required, sellers benefit from reinvesting in the business.

For example, if a company that sells blouses from a supplier in India wants to gear up for a big Q4, the AccrueMe model allows them to bring in extra inventory without taking on extra risk or going into the capital markets where terms are not so favorable. With Prime Day expected soon, followed by Black Friday and Cyber Monday, in what is expected to be the biggest Q4 in the history of eCommerce, Henig believes the AccrueMe model is at the right place at the right time.

He also pointed out that capital is a more important requirement than it has ever been, as bigger companies get involved in Amazon's direct-to-consumer (D2C) model – and as existing Amazon sellers become more business-savvy.

"And they've become more focused," Henig added. "Amazon sellers have always had to be practically perfect. And we're seeing that practical perfection rise to new levels for small and large sellers. We're also seeing a tremendous number of the larger brands trying to remove other sellers of their product. And the private-label sellers and people who have developed their own branded products can use the same tools to protect their sales.

"This is an unlikely scenario compared to 10 or 15 years ago," he noted. "You don't need a million dollars to launch a brand. So small sellers and small businesspeople are able to compete against the Nikes and the Under Armours."

Of course, the Nikes and Under Armours have legal teams and vast amounts of capital. Henig and AccrueMe are doing what they can to level the playing field. That includes providing legal advice.

AccrueMe has partnered with Amazon specialist Rosenbaum Famularo, P.C. of Long Beach, New York, for webinars and advice. For example, if a seller is temporarily suspended – which can happen for several reasons, including having above a 1 percent return rate – AccrueMe's legal partners know who to call at Amazon and how to prove the worthiness of the seller for reinstatement.

"I believe Amazon has provided people in companies with the greatest opportunity in the history of commerce," said CJ Rosenbaum, founder of Rosenbaum Famularo. "Literally anybody with a phone and a credit card can take out their phone, get an app, get an account, walk into a Marshalls and start scanning products, see where there's money to be made, and start selling within minutes. And from there, they can grow to the point where they're buying products or developing private-label products. I think it's a fantastic opportunity for everyday people."

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Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

3 Potentially Explosive Stocks I Bought During the Recent Market Crash - Nasdaq

Posted: 14 Sep 2020 07:10 AM PDT

[unable to retrieve full-text content]3 Potentially Explosive Stocks I Bought During the Recent Market Crash  Nasdaq

How Brands Can Turn B2B Buying Into A Positive Experience - pymnts.com

Posted: 14 Sep 2020 05:02 AM PDT

"The Amazon experience" is now a worn-out catchphrase in the world of B2B eCommerce.

As more manufacturers and other sellers migrate their sales strategies online, they're seeking to please online shoppers the same way Amazon has done for individual consumers.

But B2B eCommerce is not the same beast as B2C. Certain experience can, indeed, be replicated across a consumer-to-business shopping context, and end-goal in both scenarios for marketplaces is to please the online shopper. Yet as Justin King, vice president of B2B Strategy at Salsify, told PYMNTS, in order to optimize the B2B eCommerce experience, understanding the differences in what initiates the shopping must first be understood.

"The core difference between B2B and B2C is that in B2B, the individual researching and buying has a job to do," King said. "They didn't want to be there, necessarily — they have to be there. It is their job. On top of that, the buying cycle for B2B is often much more complex and lengthy, and involves many different decision makers, often with their own priorities."

For brands and their manufacturers, Amazon can be a powerful influence. But as King explained, these B2B enterprises must understand what corporate buyers need, and don't need, in order to provide a consistent and pleasing experience not only across their eCommerce channels, but across the traditional sales channels, too.

A Unique Experience

Brands and their manufacturers today continue to rely on legacy technologies and manual processes to sell products online, said King.

"Anyone in the business knows that this process is slow, clumsy and overly complex," he said, noting that Salsify has recently rolled out its Commerce Experience Management (CommerceXM) platform, a solution designed for brand manufacturers to bring the buying experience they yearn to give to the digital landscape.

The purpose, noted King, is for buyers to achieve a "consistent experience" regardless of their shopping setting. For corporate customers, "ease-of-use and utility" are No. 1 priorities.

"You must think, 'How can we make our buyers' jobs easier through eCommerce?'" noted King. "It's a small but fundamental difference in mindset between B2C and B2B digital transformation."

The payments experience is part of that. Today, paper checks continue to be the dominant form of B2B payment. Yet in order to optimize the B2B eCommerce experience, ACH and commercial card transactions need to be accounted for when building the online business shopper experience.

This is particularly true, said King, as a result of the global pandemic. As a result of work-from-home requirements, accounts payable (AP) professionals cannot be in the office to print and mail paper checks. King noted that with employees now forced to keep check stock at home, the friction of making payments after making a purchase online has elevated.

"Because of this shift to remote work, B2B organizations have been forced to leverage digital payments, simplifying the process," he stated.

Shifting Business Models

B2B payments aren't the only shift that the pandemic has initiated in the world of B2B eCommerce.

Changing business models have added extra pressure on the way brands sell across channels across business models. It's also accelerated the digitization of B2B sales.

King said that the rise of direct-to-consumer (D2C) has opened up opportunities for sellers to collect valuable data from their shoppers, pointing to Dawn Foods as one such customer of Salsify that has recently taken the opportunity to, as Dawn Foods explained, "connect with their customers and end-users, leaning their behaviors, and getting direct feedback."

Amid this shifting landscape, Amazon has once again emerged as a model to which B2B brands should pay attention.

King cited research from Salsify partner Enceiba, which revealed 70 percent of B2B manufacturers expect Amazon to emerge as a key player in the B2B commerce world in the years ahead.

"This is partially due to COVID," said King, "but also due to the fact that millennials now have an incredible influence on the B2B purchase cycle. They expect their business products to be listed on the same sites as their consumer needs, and B2B brands need to pay attention to that if they aren't already."

Overall, said King, B2B brands and their manufacturers have to be "nimble" in order to stay competitive. While the pandemic has indeed accelerated digitization and heightened both consumer and corporate shopper demands, many of these changes will be long term.

Digital sales models must also be ready for the unexpected. No one could have predicted the COVID-19 crisis and its impact on the world of B2B commerce, for instance, so any investment in digital will be beneficial for future-proofing sales in the long run.

And as King noted, B2B brands and their manufacturers need to think beyond the basics of digital commerce to not only meet "Amazon-like experience," but to also meet the unique needs of corporate buyers that require complex payment and ordering processes.

"It's not enough today to even have the right technologies and processes in place to handle the next pandemic," he said. "You have to make the investment in digital transformation today, and have the right internal mindset, to be able to handle any unforeseen circumstance."

——————————

LIVE PYMNTS TV OCTOBER SERIES: POWERING THE DIGITAL SHIFT – B2B PAYMENTS 2021 

Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

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