Amazon third-party sellers with annual revenue of nearly 40 million just from resales apply for IPO!

Recently, Amazon's third-party seller Hour Loop submitted a prospectus to the U.S. Securities and Exchange Commission , applying for an IPO on the Nasdaq with the stock code " HOUR ". Hour Loop plans to issue 2 million shares of common stock at $3 per share in its initial public offering and raise $6 million in funds.

Hour Loop 's business model is wholesale . The company buys products in bulk directly from brands or manufacturers at wholesale prices, and then sells them on Amazon to make a profit. In addition to Amazon, Hour Loop also sells products on its own independent site and Walmart . Walmart is a new platform for the company, which was launched in October 2020 last year . Although it has three different sales platforms, Hour Loop emphasizes that all of its revenue basically comes from Amazon, and the revenue from independent sites and Walmart is negligible.

Currently, Hour Loop manages more than 100,000 SKUs in product categories including home /garden decor, toys , kitchenware, apparel and electronics .

According to Marketplace Pulse, Hour Loop is one of the top 100 third-party sellers on Amazon in the U.S. In 2019, there were only 18,000 sellers with annual sales exceeding $1 million, while Hour Loop's sales in 2019 reached $26.6 million. By 2020, Hour Loop's annual sales had climbed to $38.66 million, an increase of nearly 1,500% from 2013.

Hour Loop said that among Amazon's 9.7 million sellers , it has two main competitive advantages : one is a strong operations and sales team ; the other is the support of a proprietary software system .

Hour Loop has developed a proprietary software designed for all their business needs. This includes managing the order review process, shipping management, inventory management, accounting, and full end-to-end third-party integration. The system collects and processes large amounts of data every day to optimize Hour Loop 's operations and sales. It is understood that the current CEO Sam Lai is a software engineer who has worked at companies such as Amazon.

The editor also noticed that Hour Loop has a lot of suppliers, with 226 in 2021 alone . Hour Loop also said that it plans to increase the number of suppliers to 650 and the number of active SKUs to 130,000 in 2022 ; by 2024, it plans to increase the number of suppliers to 2,000 and the number of active SKUs to 300,000 .

In addition to increasing the number of suppliers, Hour Loop is also working with suppliers to develop customized projects and more personalized products . Hour Loop believes that Amazon's focus on the masses has left them lacking products for specific market segments.

In general, Hour Loop's operating model is like a large boutique, using its own software to boost sales. Its current performance is still good, but Hour Loop also mentioned that its current dependence on the Amazon platform is relatively high, which also has certain risks.

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