Acquco t-shirt for the Tesla gift
Startups are raising hundreds of millions of dollars to acquire the best independent sellers in the Amazon Marketplace, creating a gold rush to “bundle” these small businesses, for the most part, into larger entities that have better ones. resources and can invest money in growth.
The competition to acquire these Amazon sellers has become so fierce that a player, Acquco, is offering a Tesla Model Y to anyone who refers a seller the company ends up buying.
Acquco, founded last year by Raunak Nirmal, has representatives at the annual Prosper Show this week in Las Vegas, where Amazon sellers come together to network and share advice. The company distributes t-shirts and flyers that read: “Sponsor a salesperson, get a Tesla”.
Nirmal said in an interview that on Thursday the company had received around 200 referrals in just over 24 hours since the program started and the promotional webpage launched. He said the company was ready to sell up to $ 10 million of Model Y’s, which retail for a starting price of around $ 50,000.
âThere are two options for the rewards,â the webpage reads. “You can either get a Tesla – you’ll have $ 49,990 to invest in a Tesla Model of your choice. Alternatively, you can choose to take the money straight!”
The reward is expected to be received within 45 days of the acquisition closing, the site says, and the recipient will be required to pay taxes on the car’s income or money.
The burning market for Amazon resellers
Much of Amazon’s dominance in e-commerce comes from its third-party marketplace, which is filled with millions of independent sellers who use logistics, shipping, distribution centers, and massive customer base to reach out to customers. buyers.
Growing a business on Amazon has become increasingly complex in recent years due to an increase in Chinese counterfeits and other bad actors who have tried to manipulate critics and shut down their rivals. Aggregators use these challenges as an opportunity to purchase promising products and storefronts, while using their scale and operational experience to clean up the market for consumers.
Acquco has raised over $ 165 million in equity and debt to buy Amazon Marketplace retailers, creating a business with nearly $ 200 million in revenue from these entities. It’s one of the busiest corners of the start-up market, as companies like Thrasio, which ranked 22nd on CNBC’s 2021 Disruptor 50 list, with Perch, Heyday, Branded and Boosted Commerce reaped. billions of dollars combined to bring companies together. who grew up on Amazon.
Nirmal said top salespeople are so inundated with pitches that it’s hard to get meetings with them.
âAs a salesperson, when you get a message from someone regarding the acquisition of your business, you consider it spam and go about your day,â said Nirmal, who has already spent over a year in the business. Amazon’s market activities and also launched its own brands and consulting companies. âIt’s a unique opportunity to connect with friends, family and the people around the sellers. “
Although Nirmal did not attend the Prosper show, he sent a few of his 60 full-time employees, including the sales manager, to network and meet with salespeople. Acquco also had contractors who distributed flyers and distributed merchandise.
Acquco flyer for the Tesla gift
Rivals Thrasio, Heyday and Perch were even more present at the show, according to Prosper’s website, as they were paid exhibitors with floor space and a few speaking slots. This is a big change from the last conference in 2019 when the rollup market was in its infancy. Thrasio was founded in 2018 and more followed over the next two years.
Total attendance at Prosper appears to have increased by around 15-20% from the last in-person show in 2019, which attracted more than 1,500 people, a conference representative said. The show started on Tuesday and will end on Thursday.
How to attract sellers
Casey Gauss, vice president of Thrasio, attended the show as part of his company’s contingent. He told CNBC he joined in April 2020 as Employee Number 26, and that the last time he checked last week, the company had a workforce of 930 people.
Thrasio has raised $ 1.75 billion, the most of any company in space. While not giving away Teslas, the company hosted an expensive Wednesday night party at the Bellagio Hotel called “Feast by the Fountains,” in reference to the resort’s outdoor fountain show. Gauss said he expected around 180 people.
âFeast by The Fountains will feature 5-star American cuisine and an open bar of premium cocktails inspired by the best dining clubs in the world,â the event website said.
Gauss said the topic of aggregators has been at the center of the show and companies need to find smart ways to meet sellers.
âWe tried to organize a nice event to allow for high-end networking,â he said. âThis is a good opportunity, not only for us to spend time with potential sellers who might want to sell us and people who have sold us. But also, we intend to build good relationships in the community. “
For Acquco, this year’s Prosper is their first big event. The company said it is trying to get its name known to more people – and the Tesla giveaway program is one way to make a splash.
David Lam, vice president of corporate growth strategy, said he’s working with Tesla’s corporate sales team on the program. The startup didn’t get a discounted price on the Model Y, but it expects that once the program hits around 20 cars, a discount will go into effect, and then perhaps a bigger discount. at the 50th sale.
The new Tesla Model Y is presented. Tesla has expanded its model lineup to include an SUV based on the current Model 3.
Hannes Breustedt | image alliance | Getty Images
Tesla giveaways have become more common among nonprofits as a way to raise money and give people a chance to win through online raffles. The overall popularity of cars is the main reason Tesla says it is able to cut marketing, promotion and advertising costs, which were “intangible” for the past three years, according to its latest annual report.
Acquco says in advertising material that it accepts leads for companies with at least $ 500,000 in revenue, but Nirmal generally expects to buy from sellers who are over $ 1 million. Nirmal won’t say how many acquisitions he has made to date, but said three deals were signed this week and would bring in around $ 40 million in revenue. These all came before the Tesla giveaway.
Nirmal said Acquco has started marketing the program at Prosper and will continue this week with ads on social platforms and Google as well as via influencers.
âIf there is a company that looks good and that matches our partner profile, we want to donate these Teslas,â Nirmal said.
– CNBC’s Katie Schoolov and Lora Kolodny contributed to this report.
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