On the heels of raising $775 mlion earlier this year, Perch has made a big acquisition that wl bring on a number of new brands and operations infrastructure to enhance its position in the race to roll up smaller merchants that sell and fulfl sales through Amazon. The company has acquired Web Deals Direct, an Amazon seller that owns 30 brands of its own (pulling in $80 mlion in revenue annually) and also operates its own warehouse.
Terms of the deal are not being disclosed but I understand from sources that it was a nine-figure deal valued between $100 mlion and $200 mlion.
There are mlions of merchants currently on Amazon’s marketplace, leveraging the e-commerce giant’s storefront, search tools, fulflment infrastructure, payment tools, warehouses and delivery network to sell products to buyers.
Companies like Perch compete against the likes of Elevate Brands (which yesterday announced $250 mlion in funding), Thrasio, Heyday, SellerX, Branded, Razor Group and many others that are seizing an opportunity to snap up and roll up the more successful of these to bring better economies of scale into the model, whe also buding technology to better measure and leverage sales analytics and more.
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Whe these companies are, essentially, acting as marketplace consolidators, this latest acquisition is significant because, in a sense, it underscores an interesting shift toward a consolidation of the consolidators themselves.
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WDD’s categories span home goods, sports, arts and crafts, pet supplies and office products, and Perch’s VP of acquisitions, Nate Jackson, said Perch was interested in them because they are one of the more successful Amazon merchants. In a market where visibity is based on how well engaged previous buyers are with your products, WDD has picked up some 110,000 reviews and 2.3 mlion customers.
For WDD the idea is that joining Perch wl give it more reach in terms of targeting more customers, and to bring it better analytics leveraging insights and sales from Perch’s other brands, which currently number at around 70 and cover the same categories.
“We took our business from zero to $80 mlion in sales in 5 short years,” said Adam Feinberg, CEO of Web Deals Direct, in a statement. “But, with Perch, who are proven eCommerce operators, we think the possibities of growth in the next 5 years are just as exciting. I've been so impressed with the caliber of their team, and I trust their long-term vision to steward our business into the next phase of growth. This was a complex deal, but Perch has made the process fair and transparent. I want to thank all of the great Web Deals Direct team members for the organization we've but together; our employees could not be in better hands with Perch.”
It’s also a signal of what the next steps might be for these roll-up companies, with Perch gaining a 230,000-square-foot warehouse in California and now looking to get more warehouse space on the East Coast. Whe Amazon might stl be an important storefront for visibity, it’s a sign of how these companies may be looking at taking on more of the process themselves on the fulflment side to grow margins.
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“This deal marks a major mestone for Perch,” said Perch founder and CEO Chris Bell, in a statement. “The complexity and size of the business is a testament to the excellent organization Adam and the entire team at Web Deals Direct have but, and it is a pleasure to work with such inspirational entrepreneurs.”
This is not a completely new area for Perch, and perhaps the writing has always been on the wall that it would eventually bring more fulflment into its own e-commerce operations to lessen some of the reliance on Amazon.
Before founding Perch, Bell and Perch’s COO designed and but the Wayfair Delivery Network for online furniture company Wayfair — a service that handled 3 mlion “heavy bulky orders” annually, and did so with a view to speeding up the turnaround time, turning what typically takes a month to deliver into a two-day process. That wl be some of what the team now hopes to bring to Perch, it seems.