Acquco t-shirt for Tesla giveaway
Acquco
Startups raise hundreds of millions of dollars to buy the leading independent sellers on the Amazon Marketplace, creating a gold rush to pull these mostly small businesses together into larger entities that have better resources and can put money into growth.
The competition to acquire these Amazon sellers has become so fierce that one player, Acquco, is giving away a Tesla Model Y to anyone who recommends a seller the company ultimately buys.
Acquco, founded by Raunak Nirmal last year, has representatives at the annual Prosper Show in Las Vegas this week, where Amazon sellers meet to network and share tips. The company is handing out T-shirts and flyers that read “Sellers recommend buying Tesla”.
Nirmal said in an interview that by Thursday, in just over 24 hours since the program launched and the advertising website launched, the company had received about 200 referrals. He said the company is ready to give away up to $ 10 million worth of Model Ys, which will be sold at a starting price of around $ 50,000.
“There are two options for rewards,” the website says. “You can either buy a Tesla – you have $ 49,990 on the Tesla model of your choice. Alternatively, you can take the money directly! ”
The website states that the premium should be received within 45 days of the closing of the acquisition and the recipient owes income tax on the car or cash.
The brand new market for Amazon resellers
Much of Amazon’s dominance in e-commerce comes from its third-party marketplace, which is filled with millions of independent sellers who use the company’s logistics services, shipping, fulfillment centers, and huge customer base to reach buyers.
Building a business on Amazon has become increasingly complex in recent years due to an increase in Chinese counterfeiting and other bad actors trying to manipulate reviews and shut down rivals. Aggregators use these challenges as an opportunity to purchase promising products and storefronts while leveraging their size and operating experience to clean up the market for consumers.
Acquco has raised over $ 165 million in equity and debt to buy Amazon marketplace retailers and build a business with nearly $ 200 million in revenue from those companies. It’s one of the busiest corners of the startup market as companies like Thrasio, 22nd on CNBC Disruptor 50 list in 2021, grew up on Amazon.
Nirmal said that the top sellers are so inundated with pitches that it is difficult to meet with them.
“As a seller, when you receive a message from someone about the acquisition of your business, consider it spam and go about your day,” said Nirmal, who previously spent over a year in Amazon’s marketplace business and also started his own brands and consultancy. “This is a unique opportunity to connect with friends, family and people close to the seller.”
While Nirmal wasn’t attending the Prosper Show, he sent some of his 60 full-time employees, including the sales manager, to network and meet salespeople. Acquco also had a few contractors handing out flyers and distributing goods.
Acquco flyer for Tesla giveaway
Acquco
Rivals Thrasio, Heyday and Perch had an even bigger presence at the show as, according to Prosper’s website, they were paid exhibitors with booth space and a few speaking places. It’s a big change from the last conference in 2019 when the rollup market was still in its infancy. Thrasio was founded in 2018 and more followed over the next few years.
Total attendance at Prosper appears to have increased by around 15 to 20% compared to the last in-person show in 2019, which attracted over 1,500 people, a conference representative said. The show started on Tuesday and ends on Thursday.
How to attract salespeople
Casey Gauss, a vice president at Thrasio, attended the show as part of his corporate contingent. He told CNBC that he joined as employee number 26 in April 2020 and that the company had 930 employees when it was last checked last week.
Thrasio has raised $ 1.75 billion, most of all companies in the space. While the company doesn’t give away Teslas, it did host an expensive party at the Bellagio Hotel on Wednesday night called “Feast by the Fountains,” related to the resort’s outdoor fountain show. Gauss said he expected about 180 people.
“Feast by The Fountains offers 5-star American cuisine and an open bar with first-class cocktails inspired by the best supper clubs in the world,” reads the event website.
Gauss said that aggregators is the focus of the show and that companies need to find clever ways to meet salespeople.
“We tried to organize a nice event to enable high-end networking,” he said. “It’s a good opportunity not just for us to hang out with potential sellers who want to sell to us and people who have sold to us. But we are also quite conscious of the fact that we only build good relationships in the community.”
This year’s Prosper is the first big event for Acquco. The company said it is trying to get its name to more people – and the Tesla giveaway program is one way to make a splash.
David Lam, the company’s vice president of growth strategy, said he worked with Tesla’s enterprise sales team on the program. The start-up didn’t get any discounted pricing on the Model Y, but it expects a discount to kick in once the program hits around 20 cars, and then perhaps a steeper discount on the 50th sale.
The new Tesla Model Y is presented. Tesla has expanded its model range to include an SUV based on the current Model 3.
Hannes Breustedt | Image Alliance | Getty Images
Tesla freebies are increasingly being found at nonprofits to raise money and give people the chance to win through online raffles. The general popularity of automobiles is the main reason Tesla has been able to keep down marketing, promotional and advertising costs that have been “intangible” for the past three years, according to its latest annual report.
Acquco says in the giveaway that it will accept leads for companies with sales of $ 500,000 or more, but Nirmal generally expects to buy sellers who have exceeded $ 1 million. Nirmal won’t say how many acquisitions it has made to date, but said that three contracts were signed this week that will generate approximately $ 40 million in revenue. These all came before the Tesla giveaway.
Nirmal said Acquco has started marketing the program with Prosper and will continue this week with ads on social platforms and Google, as well as through influencers.
“If there is a business that looks good and fits into our partner profile, we want to give these Teslas away,” said Nirmal.
– CNBC’s Katie Schoolov and Lora Kolodny contributed to this report.
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