There have been many cases of online stores that, after having their website or selling successfully, have ventured into Amazon to increase their sales. But did you know that there are brands that have gone the other way around? I mean, and then they’ve made the leap into their own direct-to-consumer e-commerce website.
These types of marks are called Amazon-native brands and take advantage of the advantages that a consolidated showcase such as Amazon offers, in addition to eliminating the costs of creating their own sales space as an initial starting point.
Hero Cosmetics, the paradigm of the Amazon-native brands
This is the case of the American company Hero Cosmetics, parent of Mighty Patch, an Amazon native brand specializing in facial care and acne treatment founded in 2017, and has been bought this week by Church & Dwightfor a value of $630 million (around 627 million euros). The sum represents 14 times the EBITDA generated by Hero Cosmetics in the last twelve months, 45 million dollars (just over 44 million euros). While its sales reached 115 million dollars (more than 114 million euros).
Church & Dwight, is a manufacturing company of , with a very varied product catalog, which includes: personal care brands, Nair and Batiste; household cleaning products, Arm & Hammer and OxiClean; pregnancy tests, First Response; or condoms, Trojan.
Matthew T. FarrellCEO of Church & Dwight, has stated that the addition of Hero Cosmetics to his business will serve to strengthen his product portfolio with a fast-growing category and that “The total acne treatment category in the channels tracked is approximately $700 million. The patch segment has grown by 18% in the acne treatment category, as more consumers switch from using lotions and ointments to patch solutions. The brand targets younger consumers and has a high level of loyalty and repeat purchase.”
Despite the purchase the three founders of Hero Cosmetics (Ju Rhyu, Dwight Lee and Andrew Lee) will continue to lead the company. Rhyu already has some plans to take the company to the next level, such as expanding the distribution of the products globally, while also planning to build “Hero 2.0” with a larger team.
From personal crisis to multi-million dollar business
in the of Hero CosmeticsJu Rhyu, co-founder of the company, says that the business idea arose when she herself was dealing with a pimple and rosacea emergency on your skin that, being very sensitive, she was being harmed by the strong acids present in cosmetic products. In her quest to improve her skin health, she discovered that many people had the same problem as hers.
He began digging to find a gentle alternative that would work with the skin and not against it. A) Yes, found in South Korea a hydrocolloid patch that minimizes blackheads without the need to remove or shake them and made him a million dollar business.
Hero Cosmetics started out by offering hydrocolloid pimple patches, the use of which can help reduce skin blemishes quickly. Then he diversified the business and today offers variations of the pimple patch formula tailored to different skin types and needs, as well as pimple aftercare products.
It also has a line daily face care products which includes scrubs, moisturizing and repairing creams, cleansers, toners and sunscreen; and a line of body products consisting of bath gel, scrub and body lotion.
Amazon as a testing platform
Rhyu assures that the decision was made to choose Amazon as a sales platform because it is the perfect place to test the product in the market. Since they were not sure if it would be accepted by the public. In addition to this, he claims that Amazon was the fastest, cheapest and easiest space to use.
Following rapid growth on the platform (becoming the top result when users searched for “pimple patches” or “acne patches”) and being the best-selling beauty and personal care product for two years, the brand began to increase its presence in retail stores and created its own website.
According to Rhyu, the platform Amazon offers several advantages for startups like yours, such as higher fees, lower cost of customer acquisition, and higher repeat rates. However, it also points Some disadvantagessuch as non-surplus data, you don’t own the customers, Amazon can private label your product category, plus there is some risk of squatters.
What makes Hero Cosmetics a case study among digital native brands, is that there are many companies and categories of digital vertical brands that choose not to use Amazon as a sales platform and it is the last channel they venture into. Nevertheless, most of Hero Cosmetics’ revenue still comes from Amazon.
The Anker Success Story
But of course Hero Cosmetics has not been the only success story of a native Amazon brand. anker, a Chinese electronics brand, has also been able to take advantage of the platform offered by Amazon to build a highly successful company whose business has strongly diversified away from it.
Anker was founded in 2011 by then-Google engineer Steven Yang in the Chinese city of Shenzhen, andspecializing in the sale of USB cables, batteries, chargers, power banks and other electronic devices.
Even though Amazon is still his biggest source of income, today Anker sells through direct-to-consumer websites and it has even reached the offline world, through retail stores like Best Buy, Walmart and Apple. Its total sales in 2021 were 1,890 million dollars (around 1,880 million euros), of which 1,030 million came from Amazon and the rest corresponded to sales in physical stores, other markets and own websites.
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