A third-party seller whose baby-care business raked in $20 million in sales last year reveals his secret to selling on Amazon, Walmart, and Target

KeaBabies founders Ivan Ong and Jane Neo pose with their two sons.

  • Third-party sales are becoming an increasingly important facet of the e-commerce business.
  • Ivan Ong, owner of KeaBabies, earned $20 million in sales in 2020.
  • He shared his experiences selling on platforms, including Amazon, Walmart, Target, and Kroger.
  • See more stories on Insider’s business page.

There’s millions of dollars to be made as a third-party seller on online marketplaces run by Amazon, Walmart, and Target.

Just ask Ivan Ong, whose international KeaBabies business offers maternity and baby-care products and generated around $20 million in sales last year. KeaBabies’ products are also featured on third-party marketplaces like Kroger and Macy’s.

The brand, founded by Ong and his wife Jane Neo in Singapore in 2016, additionally utilizes Shopify, wholesaling website Faire, along with plenty of advertisements on Google, Facebook, Instagram, Youtube, to drive sales from its own website. Ong credited the company’s multi-pronged customer acquisition strategy to wanting to be present wherever customers are.

“E-commerce really exploded,” Ong said. “Our business doubled last year because COVID accelerated everything. We’re expanding very aggressively. So this year we are aiming for $30 to $35 million in terms of our annual sales.”

Amazon, where KeaBabies first began selling products in October 2017. is far and away the company’s biggest revenue driving platform. With a full suite of services through Fulfillment by Amazon, offering warehousing and delivery, the e-commerce giant simply has the lowest barriers to entry, Ong said.

In 2020, Amazon saw $386 billion – or 54% of its total net sales – come from third-party sellers. And larger merchants have sold their brands for an average of $5 million in 2021, as equity firms begin consolidating corners of the market. Research firm Finbold also found that the online-retail giant is adding 3,700 new sellers daily in 2021.

Every marketplace has its pros and cons

While Amazon represents KeaBabies most important marketplace, KeaBabies has also sold items on Walmart Marketplace for about two years.

Ong said that though total sales on Walmart make up about 5% of the total business the company pulls in on Amazon, the retailer does offer fewer “headaches” because there are currently less competitors on the site, and less instances of saboteurs using “black-hatting” techniques.

Meanwhile, Target is comparatively “very selective about who they partner with” compared to most sites. That exclusivity is a plus, according to Ong, because it allows brands to grow without a ton of competition.

“There’s a different strategy for Target,” he said. “For us to get in, it was about a year of getting our brand in front of the brand acquisition onboarding team, and then presenting our brand and pitching about why we should be on Target. It has been quite a chase.”

Meanwhile, Kroger proved to be an entirely different story, thanks to the brand’s recent push to expand its baby category that was seeing growth during the pandemic. The Kroger team ended up contacting KeaBabies directly, to onboard them onto their site.

“It was a pretty easy process for Kroger because they are trying to open up to more brands,” Ong said, adding that the company’s onboarding process was easy-to-navigate.

As third-party sales continues to grow, more brands will have to contend with attracting an array of retail partners and developing those relationships. But despite the challenges, Ong said the strategy more than pays off in the end.

“Our customers are modern moms looking to buy affordable but quality stuff for their babies,” he said. “Being on all these platforms lets you really access customers.”

Read the original article on Business Insider

Thrasio, the giant firm buying up Amazon 3rd-party sellers, adds JCPenney exec as CFO and $100 million in new funding

Bill Wafford, Thrasio CFO
Thrasio CFO Bill Wafford.

  • Longtime retail executive Bill Wafford is joining the c-Suite of Thrasio.
  • Thrasio is dedicated to buying up and scaling successful Amazon brands.
  • Are you an Amazon seller with a story to share? Email acain@insider.com.
  • See more stories on Insider’s business page.

Thrasio has brought in a longtime retail executive to serve as its chief financial officer, as the company seeks to buy up even more of Amazon’s increasingly lucrative third-party sellers.

Thrasio is an e-commerce business that focuses on acquiring and scaling third-party brands native to Amazon. The company touts itself as “the largest acquirer of Amazon FBA brands,” with a roster of 100 “top-rated brands” and 15,000 products.

Read more: Big firms are popping up to buy third-party Amazon sellers, who made up more than half of the retail giant’s $386 billion in net sales in 2020. Here are the biggest players in this fast-growing trend.

Amazon sellers have blossomed into a major business over time, a trend highlighted by Thrasio’s fast growth. During the online giant’s most recent Prime Day, third-party sales spiked to over $3.5 billion, beating out the company’s retail business.

On the hiring front, Bill Wafford will now be joining the company’s C-suite, as CFO. He previously served as the CFO of JCPenney and The Vitamin Shoppe, and his résumé also features companies like Target and Walgreens.

“Bill is the perfect addition to our visionary and innovative management team with deep experience in ecommerce, operations, technology, and M&A – a team more than ready to catapult us through the next chapter of this amazing journey,” Thrasio co-founder and co-CEO Josh Silberstein said in a statement to Insider.

The company also announced that it’s raised $1.35 billion since December. Its latest $100 million Series C tranche was led by Advent International, a private equity firm.

“Thrasio’s trajectory and the speed at which it has achieved growth is impressive to say the least, especially how they’ve capitalized on the market changes that have occurred over the last twelve months,” said Bill Wafford, Chief Financial Officer. “I’ve been delighted to discover an energizing, team-minded culture that embraces experimentation and adaptability. I’m thrilled to take on the role to prepare the organization for its next phase of growth.”

Are you an Amazon seller with a story to share? Email acain@insider.com.

Read the original article on Business Insider

Sellers on Amazon say the company’s new cap on products they can send to its warehouses is cutting into their holiday sales: ‘It’s killing us’

amazon package logo warehouse
A package in an Amazon warehouse on December 8, 2020.

  • Third-party sellers are saying Amazon’s inventory restrictions are making it difficult for them to replenish supply and keep up with demand during a busy holiday-shopping season.
  • Amazon capped the number of items that the sellers can ship to its warehouses in an effort to conserve space, but sellers told CNBC that the new rules are cutting into their holiday sales.
  • This year’s holiday-shopping season has been forecast to be the busiest ever, bolstered by online sales already driven up during the pandemic, with customers forced inside.
  • The report also comes as Amazon remains under scrutiny over its treatment of third-party sellers on its online marketplace.
  • Amazon has since emphasized the success that sellers have seen on its site — the company said third-party sales surpassed $3.5 billion during its Prime Day event this year.
  • Visit Business Insider’s homepage for more stories.

Amazon’s third-party sellers are saying the company’s cap on the number of products they can ship to warehouses is hurting their holiday sales and making it difficult to replenish supply, according to a new report from CNBC.

Amazon rolled out the new policy in August in an effort to conserve space, despite the creation of more warehouses across the country, during a pandemic-driven online sales surge.

Amazon set the limit by factoring in the last 90 days of sales for any given item, and sellers told CNBC that they didn’t think the company was considering the high demand of the holiday season when setting those restrictions. The company also says it caps the number of shipments for a new product at 200 units.

According to one third-party seller that spoke to the outlet, Amazon capped the number of units per shipment at 230. He said that number has been in the thousands in the past few years.

As CNBC notes, Amazon said back in August that third-party sellers can send in more stock as they sell products. But sellers told the outlet that their shipments are delayed when they send them to the company’s warehouses. Sellers also said that they’re worried about their listings being bumped down by Amazon’s algorithms if they run out of supply, according to the report.

Another seller, Jerry Kavesh, told CNBC that there’s a delay in about 30 of his units in entering one of Amazon’s warehouses.

“It’s been that way for five days,” Kavesh told CNBC. “It’s killing us.”

Amazon said its cap on shipments also applies to its own brands, per CNBC. Some sellers told the outlet that they expect this year’s sales to exceed those from last year, but the shipment limitations are still cutting into potentially higher sales.

In response to Business Insider’s request for comment, Amazon said it will be providing further details regarding the claims made in the CNBC report soon.

This year’s holiday shopping season has been forecast to be one of the busiest ever – online shopping is expected to rise 35% this year. The expected influx of online sales has led experts to warn of a “shipageddon” in which retailers and shipping companies are forced to scramble to keep up with the surge in business.

The report comes as Amazon’s treatment of its third-party sellers remains under scrutiny. The e-commerce company faced questioning from Congress this past summer over allegations that the firm released new products through its private label that appear almost identical to those sold by third-party sellers. The House determined that Amazon indeed used third-party seller data to inform its own copies of the most popular items listed on its online marketplace.

Read more: Amazon’s biggest strength isn’t its size or delivery network – it’s the data. Now the EU wants to rein it in.

Employees also spoke out in 2019 about how easily Amazon can scrape third-party seller data and share it with its own retail team.

Amazon has since stressed that small businesses are thriving on its online marketplace. Amazon said third-party sales surpassed $3.5 billion during its Prime Day event this year, a growth the company said its own retail business hasn’t seen.

You can read the full report on CNBC here.

Read the original article on Business Insider