To scale in the e-commerce space, utilizing available assets and services is the way to go. Brian Harwitt brings an emphasis on credit opportunities. Listen as he explains how it works and why it impacts the e-commerce realm in stabilizing the ecosystem.
What exactly happens in the aggregator space? Let’s demystify the ins and outs of this business model in e-commerce with Brian Harwitt from Coventure. He breaks down what exactly goes on in the operations of aggregators, why they are excited to buy brands, and how credit provides more opportunities for sellers to scale in the space! In our interview, Brian explains why lenders are willing to fund these opportunities as e-commerce goes on its way to stabilization. The obvious effects of COVID-19 on e-commerce seem to be the one to blame when it comes to profitability fluctuation, but considering the ease of supply chain, availability of capital, and consumer preference, Brian points out that we are leaning towards growth and stabilization of the e-commerce ecosystem.
Brian is a Partner at Coventure, working within its Credit Opportunities group. He has spent a significant amount of his time working with Amazon Third Party Seller Aggregators, working with 10+ different aggregators across credit and equity investments. Brian also works with emerging fintech companies to help provide creative solutions to finance their company. Prior to joining Coventure, Brian worked in the Investment Banking group at Guggenheim.
Listen and enjoy!
[00:01 – 08:49] Utilizing Credit Opportunities in the E-Commerce Space
- Brian Harwitt on getting into e-commerce
- Utilizing credit opportunities
- This allows financing new-age businesses including Amazon sellers.
- Vetting the risk factor
- Make sure to have the highest quality management teams.
- Apply due diligence with the competency of underlying aggregators.
- Utilizing credit opportunities
- E-commerce in the lens of credit
- Opportunities for higher returns
- Taking away the need of bringing the customers to the page
[08:50 – 19:35] Stabilizing the Ecosystem through Supply and Capital Availability
- What is the economics behind the venture capital perspective?
- Financial arbitrage by efficient use of debt
- It is about creating more value through expansion.
- Prioritizing market share followed by profitability
- Financial arbitrage by efficient use of debt
- Do equity rounds make a difference in the operations of the company?
- Prerequisites in taking on debt as a seller
- Scaling fast without quickly raising equity
- Brian Harwitt’s outlook on e-commerce for aggregators
- What the easing of supply chain issues entails
- Stabilized ecosystem for continued growth
- Creating more options for exits
- What should a seller look for to exit?
- Considering the certainty of the close
- Dangers of miscommunication or misrepresentation
[19:36 – 35:00] Learn From Mistakes and Step into the Industry
- Are there opportunities for entry into the e-commerce space?
- Professionalization through aggregators
- Learning where to focus on
- Up to what extent is the control of aggregators?
- Due diligence to combat potential trust issues
- Guarding a good reputation for more closes
- What does day-to-day in the company look like?
- The intersection of technology and finance
- The blending of cultures between the venture
- Brian Harwitt’s outlook on brands picking up on e-commerce
- Professionalizing the systems in the marketplace
- The bullish trend and observable growth year by year
- Awareness of what aggregators avoid
- Negotiation and mitigating risks
[35:01 – 37:18] Closing Segment
- Brian on the four rapid-fire questions
Key Quotes:
“As more and more players came into the space, we [Brian and his business partner] became more confident in the ecosystem, the ability to align to it, and the institutionalization of it.” – Brian Harwitt
“The e-commerce on Amazon’s platform is really appealing because it took away the need of bringing the customers to your page.” – Brian Harwitt
“A lot of what I’ve seen in a lot of Amazon sellers, specifically in most of my experiences in Amazon, is that you gain market share first and worry about profitability later.” – Brian Harwitt
“As we see the supply chain issues ease, and as we see, hopefully, stabilized demand and more predictability, I think it’ll be easier for capital to come into the space as we see more of a steady-state rather than this, like, euphoria, and then come down to earth. And then now we’ll sort of see, what does the stabilized ecosystem look like?” – Brian Harwitt
Connect with Brian Harwitt
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