The success of large international e-commerce platforms has created a new type of buyer. Specialized companies are looking for interesting online stores to take over based on their success on those platforms. After a few years, ecommerce often stalls, a time when they have to decide whether to make a significant investment for further growth.
Thrasio and Perch in the USA.
As is often the case with this kind of thing, the phenomenon emerged a few years ago in the United States. Specialty shoppers like Thrasio and Perch made a name for themselves in the United States. His model has already crossed the ocean: the Dutch newspaper Het Financieele Dagblad took a closer look at the Dutch company Dwarfs.
Co-founder Demian Beenakker doesn’t hide the fact that he was inspired by Americans. “Thrasio has developed a fantastic business model and that has opened our eyes,” he says. The model is quite simple, Dwarfs searches large online retail platforms, such as bol.com or Amazon, looking for independent web stores that are performing well and then tries to take over them. Dwarfs has already achieved it for the first time with Amco, a seller of kitchen items with a turnover of six million euros.
Invest or sell
On a regular basis, a successful online store reaches the limit of its start-up model. After a few years of rapid growth, the question will arise as to whether the founder has the wherewithal to invest heavily in the next phase of growth for his company. Some take the plunge and others are potential prey for Beenakker. In this way, they take control and provide the manpower and technical knowledge to accelerate scale-up, with the goal of increasing turnover by five to ten times.
The online marketplaces of the big e-commerce players are growing rapidly, often at the expense of independent web stores.
A wave of acquisitions on the horizon?
After this, the question is whether to expect a wave of acquisitions in Europe. If we broaden the idea of the US market to Europe, something is certainly on the way. In the United States, buyers have already raised about $ 1.5 billion in capital. The potential is huge: Sellers on Amazon’s marketplace now account for about 60 percent of the e-commerce giant’s $ 475 billion turnover, the Dutch newspaper calculated.
In Europe, the amounts are a bit more modest at the moment: Dwarfs started with a capital of 7.5 million euros, but that’s just the beginning. This will soon be supplemented by around € 30 million in debt financing through a British venture capitalist. Beenakker can use it to start. They have specific goals in mind: not resellers of Asian products, the so-called “direct shipments”, but web stores that have developed their own products or a brand of their own.