The Roll Up of Amazon Sellers Accelerates

At a recent conference, one aggregator gave away Teslas for referrals for brands looking to sell.

Good morning!

Here are today’s highlights:

  • FedEx and UPS suddenly have new competition.

  • The wedding industry is booming.

  • The number of job listings requiring vaccination has doubled in a month.

LOGISTICS

More than 100 Amazon delivery companies are teaming up to compete with FedEx and UPS: “The giants of the delivery world have a new challenger to contend with, and it's like nothing they've seen before. It's not a gig-economy startup or a massive foreign corporation coming to America. It's the Frontdoor Collective, a coalition of more than 100 small businesses, the vast majority of them delivering packages for Amazon. Some say they are frustrated by deteriorating returns and limited growth potential, and they have banded together to form their own last-mile delivery company. The collective, which emerged from stealth Thursday, has been onboarding small delivery companies via a franchise model, with the promise of unlocking new sources of revenue by contracting directly with retailers other than Amazon.”

  • “Its four co-founders all deliver for Amazon, and two company leaders are former Amazon executives who are now intent on giving small delivery businesses equity and a say in the way the new company runs.”

  • “The scale of the Frontdoor Collective's operation to start is enough to serve the needs of large retailers, according to Nate Skiver, the founder of LPF Spend Management and a former logistics manager at Gap.”

  • “‘One million packages per day — that's pretty substantial,’ he said, adding that FedEx and UPS each deliver roughly 20 million packages a day.” READ MORE

OPPORTUNITIES

The rush to roll up Amazon sellers is accelerating: “Perch is an e-commerce aggregator, a technology company that purchases online brands that sell things such as silicone straws, leggings, baby sleepsuits, and disposable champagne flutes. What do these brands have in common? Huge sales on Amazon, with the reviews and rankings to prove it. Perch buys them up — about two a week lately, sometimes paying more than $100 million — and promises its software can put their sales on hyperdrive. The COVID-19 pandemic has sparked a boom for Amazon, and by extension the third-party sellers that now account for 56 percent of all sales on the site. A top-selling Amazon item can make millions, and now investors want a piece of that action.”

  • “Perch isn’t even the biggest aggregator in Greater Boston. That’s Thrasio in Walpole, which has been snapping up brands since 2018 and now owns more than 140, from pet odor removers to cold brew coffee carafes.”

  • “Thrasio made a profit of $100 million on $500 million in revenues last year, and now has 1,055 employees in Boston, Houston, Salt Lake City, New York, the UK, Germany, China, and Japan.”

  • [The industry has]  gotten so hot so quickly that at a recent Amazon sellers conference in Las Vegas, the year-old Amazon aggregator Acquco was offering Teslas to attendees who could provide referrals to brands looking to sell. They got over 1,000 referrals.” READ MORE

The wedding industry is booming: “Weddings are roaring back after a pandemic-induced slump, leading to booked-up venues, a dearth of photographers and rising prices on catered dinners. As demand picks up, it’s providing an additional jolt of spending to the U.S. economy. The race to the aisle is payback after a lost year of ceremonies. As lockdowns swept the nation, weddings slowed abruptly at the onset of the pandemic. Shane McMurray, founder of The Wedding Report, estimates that 1.3 million marriages took place in the United States last year, compared with the typical 2.1 million. Those were often ‘micro-weddings,’ according to industry insiders, with just a handful of guests, if any were present at all.” READ MORE

HUMAN RESOURCES

The number of job postings requiring vaccination has taken a leap: “Vaccination is increasingly a requirement to be hired, as employers ranging from accounting and software firms to schools and restaurants are asking applicants to be inoculated against Covid-19. The share of job postings stating that a new hire must be vaccinated have nearly doubled in the past month, according to the job search site Indeed. The total number remains low, roughly 1,200 postings requiring a vaccination per million in the first week of August. But that is well up from about 600 in early July, and about 50 per million job postings in early February.” READ MORE

THE COVID ECONOMY

A home-health care company struggles to get its employees vaccinated: “Kevin Smith didn’t think it would be this hard, convincing all of his workers to get vaccinated. Since January, he has been on a mission, giving people paid time off just to learn about COVID-19 vaccines and organizing pop-up clinics where workers can get shots. ButSmith, chief executive of Best of Care, a Quincy-based home-health provider, can’t seem to move the needle much further beyond getting 52 percent of his 329 aides vaccinated. Smith has thought about mandating COVID vaccines, an idea gaining traction among prominent employers like Google, Facebook, and HubSpot.”

  • “But for a small business owner facing an unprecedented labor shortage in his industry, a mandate doesn’t feel like a viable option. Smith, if he could find the people, would hire another 100 aides tomorrow.”

  • “‘We don’t have the luxury of trying to tell people, Hey, get the vaccine or you’re not going to work here,’ said Smith. ‘There would not be enough workers to meet the need.’”

  • “That doesn’t mean he’s against a mandate. In fact, he would support one from the government because if all health aides had to be vaccinated, that wouldn’t put his company at a competitive disadvantage. But going it alone? Too risky.” READ MORE

Texas threatens restaurants that require proof of vaccination: “The Texas Alcoholic Beverage Commission has warned two Austin restaurants that they could lose their liquor licenses for requiring their customers to provide proof of at least a first round of COVID-19 vaccinations before they would be served. The two restaurants, Launderette and Fresa’s, were first alerted by the TABC on Wednesday that they were in violation of Senate Bill 968, which passed during this year’s regular legislative session. A spokesperson for the TABC told The Texas Tribune in an email that neither of the restaurants’ owners were aware of the new law and that both immediately took steps to comply.”

  • “As a result, both restaurants posted the same message Thursday on their Facebook pages, alerting the public that they will no longer require proof of vaccination but asking guests to wear masks indoors when not seated at a table.” READ MORE

As restaurants implement vaccine policies, anti-vaxxers rage on Yelp, Instagram, and other platforms: “Before Richard Gusler announced that his Raleigh, North Carolina, sports bar, the Players Retreat, would be requiring proof of vaccination for indoor dining, he asked Yelp and Tripadvisor how he could prepare for an onslaught of one-star reviews. ‘They were pretty well aware of what was going to happen and had set up teams that were monitoring things like that,’ Gusler says. The negative reviews came quickly, as did calls and emails accusing the restaurateur of discriminating against unvaccinated people — even though people who haven’t been vaccinated are still allowed to eat on the restaurant’s patio.”

  • “Gusler isn’t alone. Restaurant owners across the country are experiencing similar waves of backlash after announcing vaccination requirements for anyone who wants to dine indoors.”

  • “Their Yelp pages get overrun with one-star reviews from people who have never eaten there; their Instagram posts get spammed with vitriolic comments; their inboxes and voicemails get flooded with messages.”

  • “Although restaurant owners have come to expect negative reviews and comments from people who oppose their vaccination policy, everyone I spoke with said the support they’re getting from actual customers and members of their community outweighs the backlash.” READ MORE

Twenty-seven people aboard a Carnival Cruise Line ship that left from Galveston, Tex., have tested positive: “The outbreak is among the highest number of publicly reported cases on a ship sailing from the United States since cruises restarted this summer. According to the statement from Belize tourism officials, 26 of the infected people are crew members and one is a guest. All are vaccinated, and most have either mild or no symptoms.”

  • “Following that disclosure, the company put new mask rules into place for some indoor areas of all its ships effective last weekend.”

  • “The company also added a requirement that passengers — regardless of their vaccination status — must show proof of a negative coronavirus test taken within three days of boarding, effective this coming Saturday.” READ MORE

THE 21 HATS PODCAST

Episode 72: It’s a Pile of Money: This week, Paul Downs makes two seemingly contradictory points: One is that his business is on track to have its best year ever. The other is that he expects to claim another huge government subsidy, courtesy of the recently enhanced Employee Retention Tax Credit. As Paul says, if you don’t know about the ERTC or if you don’t know that its requirements have been relaxed, you probably should check it out. Meanwhile, Jay Goltz tells us what happened when three employees found out what the others were being paid, and Dana White feels a little deflated after talking to an investment banker. Plus: Paul shares his new strategy for coping with the labor shortage.

If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren