Thought Leaders in E-Commerce: Jungle Scout CEO Greg Mercer (Part 4)

Sramana Mitra: You mentioned that these Amazon brands rolling up are your customers. Can you talk about some of these companies that are coming together through these roll-ups? What kinds of brands have been rolled up? How many umbrella companies are there doing this?

Greg Mercer: It’s become prolific over the past couple of years. In the past week or so, we estimated that billions of dollars have been raised to purchase these digital native Amazon first brands. I would say that the majority of them are not focusing on a certain style of product but instead are focusing on the economics of the business. It involves what businesses are doing well, what their profit margin is, and things like that.

It is a different way of thinking about things because, in Amazon, there are no material benefits to just selling the same style of product. Back in the day, brick-and-mortar stores would sell only one thing. For example, a bookstore would only sell books. With Amazon, there is no material benefit to only selling the same style of product. The majority of these roll-ups don’t necessarily care what you are selling on Amazon, but they care about the overall economics of it. 

Sramana Mitra: Interesting. Do you advise the acquiring companies on what brands to go after?

Greg Mercer: That is another use case for it. If you understand how well every product in Amazon is selling, these investments that are rolling up these brands can use it to identify potential acquisitions. They can see that this company that is selling products for men’s hair loss, for example, has grown crazy over the past years. They now have a quarter of that market. That would be a good company for them to acquire. 

Sramana Mitra: Are you familiar with the special purpose acquisition company (SPAC)?

Greg Mercer: Yes, I am. 

Sramana Mitra: Are SPACs acquiring Amazon sellers?

Greg Mercer: I haven’t heard of any yet but based on the overall boom of SPACs, it wouldn’t surprise me to see some. 

Sramana Mitra: It seems like a natural and straightforward thing for me to do. 

Greg Mercer: Yes, no kidding. 

Sramana Mitra: If I were you, I would go talk to the SPACs and advise them because they are advisors on identifying what to acquire.

Greg Mercer: SPAC is the hottest thing out there. I will do it. 

Sramana Mitra: It was a pleasure to talk to you. I enjoyed the conversation. If you have any tips for our entrepreneurs on some category where you see an opening for people to go build startups, go ahead.

Greg Mercer: What I have seen overall is that there is a tremendous amount of opportunity on Amazon right now. The sales of Amazon doubled overnight because of COVID. The supply side has been much slower to catch up. There are opportunities in every major category on Amazon right now.

If someone is reading this article right now and they would like to take advantage of that opportunity and get involved with it, they can go to Jungle Scout and check it out without purchasing anything. We have tons of free tools and resources that you can start on. You can start to get some ideas of what is selling well and the kinds of opportunities there are for you on Amazon.

Sramana Mitra: Before we close, I will give you my personal experience. I am of Indian origin. My husband is Belgian. We cook a lot of cuisines in our house. We eat mostly home-cooked meals. We love to cook. I cook the Indian part of the cuisine.

Before COVID, I used to go to the Indian store once every couple of months to pick up the spices and whatever else that I need. I don’t think that Amazon has a great offering of Indian products for an Indian cook for example. This includes spices and other relevant products. I would like that to be something that an entrepreneur looks into. 

Greg Mercer: I like that idea. 

Sramana Mitra: Great talking to you. Thank you for your time.

This segment is part 4 in the series : Thought Leaders in E-Commerce: Jungle Scout CEO Greg Mercer
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