I have one doubt like as these Roll-up companies will have more than 10-15 good quality brands, So, can they make their own E-commerce website where they can cross-sell the products and do influencer and growth marketing just like D2C brands.
This would be Marketing Economies of Scale and a lot of D2C brands reach that as they keep growing. For example, I was looking at Epigamia's PnL statement a few years ago and for FY18, they spent 25cr on Marketing to get 50cr of revenue and in FY19, they spent 25cr to get 80cr of revenue.
Hopefully, combining the D2C brands would help them reach these economies of scale faster. However, there has to be something tying the brand stories otherwise it will seem very cluttered and D2C brands live and die on their brand stories. Look at Soulfull Foods - https://www.soulfull.co.in/ - after they were taken over by Tata Consumer Products, they started doing co-branding with Tetley Tea with both of them focusing on the healthy aspects of their brands.
Can it be possible that these Thrasio brands run as separate brands on Amazon because changing name will hurt SEO but launches as ABC brand by Thrasio on their respective Thrasio website to build trust and cross sell easily.
Thras.io acquired already profitable merchants and showed the same profitability right? It is not clear from the article if they started showing the savings due to economies of scale. Also would love to understand what activities can be clubbed to get the benefits. E.g. Marketing operations can be clubbed.
Hey Venkat, these businesses were already profitable before being taken over by Thras.io. That was the beauty of the original idea - take already profitable businesses and club them together to find scale which they couldn't do individually.
We recently spoke to someone who works at one of these companies and after acquisition, the Amazon backend for the aquired companies are merged into the parent company thus giving benefits in terms of management of the account overall. Other economies of scale would probably be found in warehousing, logistics, cross promotions and other operational areas such as purchase.
Very Informative read.
I have one doubt like as these Roll-up companies will have more than 10-15 good quality brands, So, can they make their own E-commerce website where they can cross-sell the products and do influencer and growth marketing just like D2C brands.
Hey Govind!
Thanks for taking the time to read.
This would be Marketing Economies of Scale and a lot of D2C brands reach that as they keep growing. For example, I was looking at Epigamia's PnL statement a few years ago and for FY18, they spent 25cr on Marketing to get 50cr of revenue and in FY19, they spent 25cr to get 80cr of revenue.
Hopefully, combining the D2C brands would help them reach these economies of scale faster. However, there has to be something tying the brand stories otherwise it will seem very cluttered and D2C brands live and die on their brand stories. Look at Soulfull Foods - https://www.soulfull.co.in/ - after they were taken over by Tata Consumer Products, they started doing co-branding with Tetley Tea with both of them focusing on the healthy aspects of their brands.
Can it be possible that these Thrasio brands run as separate brands on Amazon because changing name will hurt SEO but launches as ABC brand by Thrasio on their respective Thrasio website to build trust and cross sell easily.
Thras.io acquired already profitable merchants and showed the same profitability right? It is not clear from the article if they started showing the savings due to economies of scale. Also would love to understand what activities can be clubbed to get the benefits. E.g. Marketing operations can be clubbed.
Hey Venkat, these businesses were already profitable before being taken over by Thras.io. That was the beauty of the original idea - take already profitable businesses and club them together to find scale which they couldn't do individually.
We recently spoke to someone who works at one of these companies and after acquisition, the Amazon backend for the aquired companies are merged into the parent company thus giving benefits in terms of management of the account overall. Other economies of scale would probably be found in warehousing, logistics, cross promotions and other operational areas such as purchase.