From Cottage Industry Takeovers to On-Demand Production

At the cutting edge of commerce: Razor co-founders Tushar Ahluwalia, Shrestha Chowdhury, Dr. Oliver Dlugosch, and Christoph Felix Gamon. – © Razor Group

E-commerce accumulators and aggregators build brands, primarily on Amazon. In the innocent days of cottage industries, the service ‘Fulfilled by Amazon’, or FBA, made starting out with a product idea easy for small sellers, because pretty much everything except production itself is handled by Amazon. Products might be anything from lunch boxes to stereo equipment or kitchen appliances. Aggregators, also known consolidators, and there are many of them, see which products have the most promising metrics, take them over (if they didn’t set them up themselves in the first place), and ramp up their mostly in-platform marketing, building them up into professional-seeming brands by providing growth capital and extensive e-commerce and technology expertise. This is one of the reasons why Amazon shows so many no-name products, or ‘next-generation’ consumer goods, while you’re shopping there. One of the most successful aggregators is Razor Group, founded in Berlin in 2020. International investors have already poured millions into Razor.

Now Razor has acquired US-based competitor Perch while simultaneously announcing a $100M series D funding round, pushing the combined valuation of both companies up to roughly $1.7B and positioning Razor as the global leader in this particular industry. So today, Razor manages over 40,000 products from ten countries in three continents in popular categories such as home & living, sports & health, or toys, most of these on Amazon. But Razor wants to decrease its revenue dependency on the platform. The bigger idea is to create a “western response” to the Chinese consumer-to-manufacturer (C2M) principle established by the likes of Temu and Shein, where consumers interact directly with manufacturers, often through e-commerce platforms as virtual intermediaries, and with a supply chain that directly links the production lines to the end-customers to achieve “on-demand production”.