thrasio-business-model Business Model In A Nutshell follows an acquisition entrepreneurship template, by surfing the Amazon third-party ecosystem. The company acquires Amazon sellers’ businesses and it scales them up. It follows a fast acquisition template to offer an exit to Amazon sellers. also follows a multi-brand and multi-product strategy, focused on consumer-brands.

Understanding Amazon third-party business

Of the products sold on Amazon, a majority of those products are the third-party sellers. While Amazon also has its own labels, the third-party ecosystem is still strong.

Amazon runs a platform business model as a core model with several business units within. Some units, like Prime and the Advertising business, are highly tied to the e-commerce platform. For instance, Prime helps Amazon reward repeat customers, thus enhancing its platform business. Other units, like AWS, helped improve Amazon’s tech infrastructure.

The Amazon business model moves around a few key segments. The consumer e-commerce platform is the core part of the business.

And it is divided into first-party (Amazon’s own products) and third-party (independent sellers building their stores on top of Amazon).

From there, it starts the story of, a company almost worth a billion, thanks to a business completely built upon Amazon third-party sellers’ ecosystem.

Leveraging the third-party Amazon business


In an interview, Ken Kubec from the team highlighted the opportunity that would help the company get started. It was back in 2018 when launching a business on Amazon had become harder, compared to just a few years before.

In addition, Amazon sellers, in most cases would hit a ceiling with their businesses when approaching the $3-5 million in revenues. In order for them to grow, it required capital, usually coming from loans or personal debt.

That created the opportunity for who offered an exit strategy to Amazon sellers. Once the Amazon third-party seller has been acquired by the company uses its scale, capitals, and expertise (by 2019 the company had acquired more than 25 Amazon sellers’ businesses) to further grow the operations.

Indeed, as launches new products it can use the brand equity from those sellers (the reviews rating, ranking) and the branding of that business on Amazon to scale up.

The process is fast, and it gives within a few weeks the option for Amazon sellers to exit their business:

The workflow of a business that goes through that acquisition process (source:

How does make money? founder, Carlos Cashman explained that the company buys leading products, usually category-leading products, which become the basis of the acquisition process. As those products are solid and have decent margins,

The company that raised over 250 million dollars and it raised also debt to finance its operations. According to Cashman, by 2020, the company was low to mid-nine figures revenues range.

Therefore, follows an acquisition entrepreneurship path, where the company acts both as an entrepreneur, and a venture capital.

Acquisition Entrepreneurship (AE) starts by buying an existing business instead of starting one from scratch. Therefore, an acquisition entrepreneur masters the process of acquiring existing businesses to shorten the path to success. In short, the acquisition entrepreneur thinks like an investor in the process of buying an existing business and acts as a CEO once the deal has been closed and he needs to run the company to bring it to the next level.

What makes up a good Amazon business for The R Cubed Model

As Ken Kubec from the team highlighted, the company starts with a broad research approach, and it starts narrowing it down to what they call the R Cubed (Reviews, Rating and Rank).

And from there, they start asking questions with a drill down approach, starting from the reviews:

Do they have reviews that should establish them as a leadership position?

If so, it goes a level down and look at product/rating:

Do they have their rating, the product quality to back up and sustain their position?

And lastly, about ranking:

...and then rank: are they ranking organically on high keyword volume? looks at what they call “simple everyday hard-good objects.”

The buying process is primarily focused on businesses which revenues span from 1-30 million dollars, and that are private labels. also looks for Amazon businesses with a lower amount of SKUs (fewer products but more sales). Indeed, for the most valuable businesses are those that hit over a million in sales with the fewer SKUs.

How does the valuation process work?

The valuation process and the modeling part is pretty straightforward. starts from the Amazon Seller’s last twelve months carried profits, to that it adds back the Amazon seller’s salary, to get the so-called seller’s discretionary earnings.

On that number, once a multiple has been agreed and negotiated, the business gets sold. Usually on the seller’s discretionary earnings is applied a 2-4 valuation multiplier.

In short, imagining a business making a million dollar per year, at 20% profit margin, this means the business makes up $200K in net profits. Assuming the Amazon seller pays himself a $50K salary, if we add it back, we get a seller’s discretionary earnings of $250K.

From there the business can be valued 2-4x its discretionary earnings, therefore in the range of $500K to one million dollars.

Key takeaway

  •’s business model surfs Amazon’s third-party seller ecosystem. Started in 2018, with the acquisition of a few sellers’ brands, it created a template for acquisition entrepreneurship on top of the Amazon marketplace.
  • acquisition process starts by looking at businesses in the range of $1-30 million in revenues and from there it looks at the R Cubed (reviews, ratings, and rankings) to assess whether the product is a leader in its category and if it has enough brand equity.
  • From there the acquisition process is fast, giving Amazon’s sellers the option to sell their business.
  • acts as an investor in the process of sourcing and acquiring Amazon businesses. And once acquired it runs them.

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