Case Studies - Companies Selling on Amazon Marketplace
Casper and Purple are two companies used as case studies to provide in the below findings companies that have observed a revenue growth of more than $50 million after they started selling on the Amazon marketplace. Although specific data on how their revenue grew after joining the Amazon marketplace was not available, these companies' online practices (including their activities on the marketplace) that could act as a catalyst for sales on the marketplace are highlighted.
- Casper described itself as a sleep company and it is arguably the creator of the world's first mattress-in-a-box brand.
- The company was started in April 2014 and quickly became a disruptor in the mattress industry.
- It sold out its mattresses (40 pieces in total) on the very first day its website went live.
- In just two months after its inception, the company sold "about $1.8 million worth of mattresses."
CASPER: CASE STUDY
- Before Casper came in 2014, there was no investment in online sales of mattresses. So, it started as a disruptor in the mattress industry.
- Casper mattresses started with direct-to-consumers sales on its websites before venturing into other online platforms like the Amazon marketplace on July 30, 2014, for expansion, consolidation, and meeting customers' delivery timeline.
- The company's products on the marketplace come with a 10-year warranty and a risk-free 100-night trial.
- The mattress-in-a-box on the marketplace is the first innovative way of placing an online order for a mattress and getting it shipped in a box to your doorstep. It was tagged 'air mattresses' via the Amazon platform to meet customers' demands who were experiencing delays with their orders.
- Casper's Queen 10 mattress has been reviewed 949 times on the marketplace with 56% giving it a five-star rating.
- When Amazon marketplace identifies Casper's mattress-in-a-box brand as a best-seller, it launched a similar brand under its private label.
- The company's revenue grew by being innovative and spending a significant budget on adverts.
- Casper made use of influencers such as Kylie Jenner on platforms like YouTube and Instagram to increase the company's revenue growth from sales via online platforms like Amazon marketplace. Jenner's Instagram post in March 2015 generated over 870,000 likes and it nearly crashed the company's website.
- In terms of sales, Casper is now a billion-dollar company with sales at around $400 million last year alone. Before the company started selling on the Amazon marketplace in 2014, its total revenue was about $1.8 million.
- Purple is a comfort innovation company and it described one of its products as the "world's first no-pressure mattress."
- The company started making hyper-elastic polymer mattresses in 2013.
PURPLE: CASE STUDY
- The online listing of mattresses by a new startup (Casper) could be assumed as the driving force for other competitors like Purple to get on the Amazon marketplace.
- Purple's listed mattresses first appeared on the Amazon marketplace on November 23, 2015.
- On the Amazon marketplace, the company emphasizes how its mattresses support the health and comfort of users.
- The company also shares on the Amazon marketplace important insights on the technology and innovation put into their mattresses, and why it is most preferred.
- One of its mattresses accounted for 972 reviews on the marketplace, with 59% giving five stars for the product.
- The Purple Queen mattress has been shared over 1000 times on the marketplace through social media platforms like Facebook, Twitter, and Pinterest.
- In 2018, the company's revenue grew to $285.8 million as against $196.9 million in 2017. This 45.2% increase in net revenue was attributed to "increased online mattress sales, including the release of new higher-priced mattress models."
- The company's net revenue as of December 31, 2018, is $285.8 million as against $769,000 profit it made in 2014 before it started selling on the Amazon marketplace.
We started our findings by building case studies on two companies in the same industry that started almost around the same time. These two companies are brands that own their products and have surpassed $50 million in revenue since they enlisted their products on the Amazon third-party seller marketplace.
On why these companies started selling on the Amazon marketplace, Casper's reasons were to disrupt the mattress industry, consolidate its online market share expansion, and meet customers' delivery timeline. For Purple, the reasons can be attributed to the need to compete with a disruptor like Casper and also boosts its online market share too.
On how these companies grew their revenue after joining the Amazon marketplace, we tried searching through the financial reports of these companies to ascertain the impact of the Amazon marketplace on their revenue but such information was not available. Secondly, we tried business news outlets like CNBC, Bloomberg, and Forbes but this information was also not available. Lastly, we went through research platforms like Statista, Market Watch, and IBIS World but this information was still not available.
Since this data is not available in the public domains, we concluded that this could be as a result of the non-segmentation of such information in the first place. We then highlighted some of these companies' online practices (including their activities on the marketplace) that could act as a catalyst for sales on the Amazon marketplace.
On how big these companies are today, we relied on their 2018 revenue.