The past two years at the University of Michigan have been a terrific learning experience, and the relationships will last a lifetime. Completing my MBA at the University of Michigan was the best decision of my career. While the MBA chapter of my life closes, a new chapter is beginning.
This week I began work at Amazon.co.UK, managing the fashion and consumables categories of the Fulfillment by Amazon (FBA) business. Learn more about the FBA business here. In a nutshell – Amazon offers other merchants the ability to store their inventory in Amazon’s fulfillment centers, and Amazon will pick, pack, and ship the inventory for the merchant. Amazon will also provide customer service (including processing returns) for all items that are fulfilled by Amazon. All third party merchandise that is fulfilled by Amazon is also eligible for Amazon Prime or Super Saver Shipping. Merchants are also able to use the FBA service to fulfill orders across channels (e.g. their own website, eBay, etc). Mark Mahaney put it best in a recent Bloomberg interview (see here). Mark emphasizes how FBA increases liquidity in the Amazon marketplace by providing first party service to third party orders, which is something other marketplaces can’t yet duplicate. The Mark Mahaney video is worth a watch (it’s 2min).
For those that don’t follow Amazon closely, FBA is one of several merchant services offered by Amazon. Amazon has a large marketplace business not just a retail business, and often the items you are viewing on Amazon might be sold by a third party. Below is a screenshot of what FBA looks like from a consumer’s standpoint.
I am extremely excited to join the FBA team in the UK. Not just because of my passion for the marketplace business, but also because I am anxious to learn more about the UK market and culture. Expect upcoming blog posts about the UK e-commerce market…it is a fascinating market. As for my blog, I expect to become more active and it will continue to represent my opinions and interest.
Finally getting back to blogging after a busy few months. There are several new posts on the horizon, including an important announcement in the very near future. For a hint..check out this weeks Fashion Fridays post.
1. = French Connection – Aubrey Slub Jumper, $100, French Connection
2. = Ettinger – Bridal Hide Nut Billfold Wallet, $275.99, Ettinger
3. = Burberry Brit – Steadman Slim-Fit Jeans, $350, Mr.Porter
4. = Ben Sherman – Saddle Loafer, $120, Ben Sherman
5. = Gucci – iGucci Orange, $1,028.90, Amazon
Below is a quick rundown of some interesting statistics that were just released.
Last Friday, the Department of Commerce reported that e-commerce sales were up 17% YoY in Q3 ’12. Retail sales were up 4% during the same period. The Department also announced that e-commerce sales now represent 4.9% of retail sales, which is up from 4.3% of retail sales in Q3 2011 and 3.3% during Q3 2007. Below is a chart summarizing the DoC’s statistics since Q4 1999, which is when they started tracking e-commerce.
E-Commerce Sales as a Percent of Retail Sales Q4 1999 – Q3 2012 | Data: Department of Commerce
This Monday, Bloomberg published an article titled “Most E-Commerce Froth Since 2000 Stirs Up Investor Doubts: Tech.” Based on that article I decided to dig up the NVCA/PwC statistics on VC investments in retail over the past 13+ years. The below chart summarizes these statistics. Note that the average deal size in Q3 2012 is almost as high as it was during 2000. That said, the number of deals per quarter are below average. There were an average of 15 deals per quarter during 2011 and 2012, this is down from an average of 20 per quarter since 1998. Most notably, the industry has already raised more in 2012 than in any year since 2000.
Annual VC Investments in Retail/Distribution Companies Q2 1997 – Q32012 |Data: NVCA/PwC MoneyTree
Quarterly VC Investments in Retail/Distribution Companies 1998 – Q32012 | Data: NVCA/PwC MoneyTree
Lastly, in honor of Black Friday. It is worth looking at IBM’s Benchmark report on Thanksgiving shopping. Earlier today, IBM released an estimate that Thanksgiving e-commerce sales are up 17.4% versus 2011. I don’t have my hands on the actual data at this point, but here are some good articles on the subject: Business Insider, Internet Retailer and Seeking Alpha.
By request of a close friend, today’s Fashion Fridays features men’s overcoats. For more suggestions check out Nordstrom’s The Ultimate Coat Guide.
ONE. = Burberry London - Single-Breasted Trench Coat, $1,195, Park & Bond
TWO. = Hentsch Man - Wool-Blend Tweed Overcoat, $665, Mr.Porter
THREE. = Canali – Water-Resistent Wool Coat, $1,710, Mr.Porter
FOUR. = Gant Rugger – The Double Double-Breasted Wool-Blend Coat, $495, Mr.Porter
FIVE. = Jack Spade – Bonded Trench Coat,
$595 $417, Park & Bond
SIX. = Theory - Pawel Three-In-One Overcoat,
$795 $519, Barneys New York
ONE. = J.Cew – Alpaca Shawl-Collar Sweater, $128, J.Crew.com
TWO. = Joe’s Jeans – Strait & Narrow – The Brixton, $179, Joe’sJeans.c0m
THREE. = Timex - Weekender, $29.95, Amazon.com
FOUR. = Barney’s New York – Striped Sock, $44, Barneys.com
FIVE. = Quoddy – Kennebec Suede Chukka Boots, $300, Mr. Porter.com
Back in July I released the first edition of My Top 10 List of E-commerce Startups in LA. A lot has changed since July, and below is an update to my list.
Startups based on the subscription model have slipped down the list - despite the massive amounts they have raised - in favor of startups with proven business models (e.g. NastyGal). There have been several articles documenting some of the struggles of the subscription model. Most notably Brian O’Malley’s article in AllThingsD.
Notably, the below startups have raised over $350M. See the chart at the bottom of this post for additional key facts about these startups.
- Nasty Gal - Nasty Gal is a global online destination for both new and vintage clothing, shoes, and accessories.
- The Honest Company - The Honest Company is a consumer products company that delivers non-toxic, eco-friendly diapers and biodegradable wipes, organic bath/skin care and green cleaning products. Co-Founded by Jessica Alba.
- Beachmint - BeachMint is a social commerce company specializing in celebrity-curated direct-to-consumer products.
- JustFab – JustFab designs and sells its own brand of shoes, jewelry and handbags, and charges subscribers a flat $39.95 for each item.
- Shoedazzle - ShoeDazzle offers personalized shoe, handbag and accessory recommendations chosen by a team of A-list stylists, including co-founder Kim Kardashian.
- Little Black Bag - Social shopping and trading for designer handbags, jewelry, accessories, beauty and home decor
- Dollar Shave Club - The Dollar Shave Club is a service that delivers fresh razors to your doorstep, monthly, for a fraction of the cost of the grocery-store equivalent.
- Wittlebee - Wittlebee is a kids clothing club that creates custom packages for parents based on their child’s age, color preferences, geographic location and more.
- Shop-Hers - Shop-Hers is a socially-inspired, user-driven, e-commerce, marketplace where women sell and buy premium label, pre-owned clothing and accessories
- Daily Look - DailyLook sells one new fashion look every day for under $100.
Eleventh Man Award: TripleThread – Launched this week out of the Science Incubator in LA, TripleThread is a push-based commerce platform that allows retailers to offer stylist-selected, shop at home service to customers.
Twelfth Man Award: StyleHaul - StyleHaul is the largest original video content network on YouTube for fashion and beauty. Not quite e-commerce but relevant and interesting.
After over a month off, I’m returning to the Fashion Fridays series. See this post for some background on Fashion Fridays. This week’s outfit includes a woman’s touch, as it was compiled by my wife Natalie – check out her blog here and enjoy this week’s look.
ONE. = Burberry Brit - Chunky-Knit Check Merino Wool Sweater, $695, Mr.Porter
TWO. = Club Monoco – Baseball Cap, $59.99, Club Monoco
THREE. = Loro Piana - Lightweight Plaid Cashmere Scarf, $800, Mr. Porter
FOUR. = J Springs - Automatic Retro Future Mens Watch, $230, eBags
FIVE. = Acqua di ParmaColonia – Eau de Cologne Travel Spray, $80, BergdorfGoodman
SIX. = J.Crew - MacAlister Upcountry Boots, $185 , J.Crew
SEVEN. = Lee - ”Powell” Jeans, $200, TOPMAN
The University of Michigan‘s Zell Lurie Institute for Entrepreneurial Studies will host their annual entrepreneurship conference, Entrepalooza, tomorrow in partnership with the Ross School of Business and the Entrepreneurship and Venture Club.
Anil Arora, President and CEO of Yodlee will be our keynote speaker, and should provide a very interesting perspective. Anil is a ’84 UofM MBA grad. He started his post-MBA career at Kraft and eventually moved on to Gateway Computers before taking the top job at Yodlee. At Yodlee he grew the company from 10 employees to 1,000.
There are also four panel discussions that will happen after the keynote address. I have the privilege of moderating a panel titled “Financing Your New Venture: The Structure of a Deal”. The panelist consist of Marcia Hatch – Corporate and Securities Partner at Gunderson Dettmer, Tony Grover – Founder and Managing Director at RPM Ventures, and Jen Baird – CEO Accio Energy. A further description of the panel is below. Feel free to tweet any questions you have for the panel using hashtag #UMGunderson. I will post a link to a recording of the panel early next week.
Financing Your New Venture: The Structure of a Deal
Calling all prospective VCs, entrepreneurs, lawyers, and startup groupies: come learn the key economic and oversight rights that are negotiated during a venture capital financing. Whether you are planning to raise venture funding in the near future or you simply want to better understand the startup ecosystem, you need a firm grasp on the structure of a venture financing. A diverse panel made up of a seasoned venture capitalist, a serial entrepreneur, and an established Silicon Valley startup lawyer will discuss the most important terms of an early-stage venture financing. They will also provide advice on how to negotiate specific terms. Don’t delay – it’s never too early to understand the key terms of raising venture capital.
Jennifer Baird, CEO, Accio Energy
Tony Grover, Co-Founder & Managing Director, RPM Ventures
Marcia Hatch (JD ’97), Corporate & Securities Partner, Gunderson Dettmer
Moderator: Matthew Newman (MBA ’13), Ross School of Business
It has been a wild first couple weeks back at school. Check out this weeks Fashion Fridays post, and have a good weekend. Go Blue!
One. = Joe’s Jeans – The Brixton Straight and Narrow, $187, Joe’s Jeans.
Two. = J.Crew – Merino V-neck Sweater in Medium-Stripe, $79.50, J.Crew
Three. = Corgi – Striped Cotton-Blend Socks, $20, Mr.Porter
Four. = Cole Haan – LunarGrand Wingtip, $248, Cole Haan
Returning to my list of the Top 10 E-Commerce Startups in LA, DailyLook is ranked #6.
DailyLook is a flash sales site that sells one new look each day, and the look remains available for 36 hours. Meaning that on any day you can shop up to 3 different looks. Customers can purchase the entire outfit or select pieces. The entire outfits retail for $100 or less.
DailyLook’s approach to flash sales allows it to change the focus from steep discounts to fashion and personal curation.
DailyLook was founded by Brian Ree (CEO), Michael Kim (CMO), and Eric Marston (CTO). Brian Ree was previously the Founder of PokerLetter, the largest poker strategy newsletter in the world, which was acquired by FullTiltPoker in 2007. The company has gained 250K members since launching in October of 2011, and recently raised an undisclosed seed round.
- Location: Los Angeles, CA
- Founded: June, 2011
- Launched: October 2011
- Initial Venture Funding: Undisclosed
- Total Amt Raised: Undisclosed
- Current Investors: Undisclosed
I’ll be sure to update the above funding stats once the company goes public with this information.