The Covid-19 pandemic has accelerated the future of e-commerce.
With many high street companies’ falling into administration, many of their employees are turning to their hobbies to generate extra cash-flow.
Those lucrative hobbies are enabled by e-commerce platforms such as Shopify, Wix and Magento and then placed in an online “shop window” by Amazon, Ebay and Etsy etc.
However, what many of those ‘newly found’ niche hobbyists do not realise is that they are suddenly a hot commodity to investors flush with cash, who look to buy small brands who are successfully selling on the above sites.
Brands such as Warby Parker, Casper and Dollar Shave Club have been the big players in investment for the past decade but appear to have failed to build a sustainable business. With their sophisticated infrastructure, Amazon and the “Shop Window Collective” have built an opportunity for a fragmented market of small merchants to synergize and become the foundation and a welcome addition to a large-scale business.
The opportunities they offer, such as bringing together emerging winners, financial power, sustainable marketing and greater bargaining power with factories and potentially even with Amazon, is a temptation that many independent merchants may not be able to refuse.
Investors such as Seller X in Berlin, Hero, in London and Heyday, a San Francisco based operation, didn’t even exist at the start of 2020 and they along with four similar outfits (in the United States and Europe) raised a total of $950 million. These buyers aim to build merchant brands’ sales and profits by backing them with greater financial and technical resources.
Many of the merchants targeted are part of the ‘Fulfillment by Amazon’ (FBA) program, who pay to store their inventory in Amazon’s warehouses, sell through their main website and app, and then have the item delivered for a cost, or free (to Prime customers) by Amazon itself.
Thrasio, the largest global acquirer of Amazon brands over the past few years, announced via a press release in December 2020 a commitment of £200 million and then announced a further raise of $500 million of debt, to complete acquisitions of UK companies as well as the addition of its 11th UK acquisition, Maximo Fitness, a leading exercise mat provider.
The significant expansion of operations in the UK, Amazon’s third largest market in the world with over 300,000 FBA sellers, comes on the heels of their estimated £175 million expansion into Germany early December.
With “direct to consumer” and retail teams, sellers are starting to see their brands in places they always envisioned but couldn’t penetrate. There are many entrepreneurial performance-based incentives as part of each deal, with many entrepreneurs sharing the benefits.
On 1st September 2020 press release, Amazon confirmed that it was on track to invest $18 Billion in 2020 to help small and medium-sized businesses grow their sales.
As leading legal advisors in the field of E-commerce, Gregory Abrams Davidson Solicitors are frequently retained by owners of established and start-up “Direct To Consumer” businesses looking to launch on the major online retail platforms.
Recent matters include handling formations, shareholders agreements, customer terms of business, commercial contracts, employment terms, leases (for warehouse and storage space), manufacturing, distribution and logistics agreements.
Our primary expertise, however, is advising buyers, sellers and investors on mergers, acquisitions and sales of online retail businesses.
We advise clients on both the buy and sell-side, including corporate clients, management teams, e-commerce, private equity firms, business owners, both as majority and minority interest-holders.
With dual-qualified UK Solicitors and US Attorneys, experienced in trans-Atlantic Mergers and Acquisitions, we are frequently instructed on US-UK e-commerce / direct to consumer transactions, often involving FBA / Amazon stores or eBay stores.
For further information or to discuss your e-Commerce business transaction, please contact
Paul Abrams, UK Solicitor
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Jonathan Abrams,
Head of Business Services,
UK Solicitor and USA Attorney (New York State)
+44 (0) 20 8004 7016 or emailing
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