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From 3rd party vendors -- and theyâre selling for millions.
[The Hustle]( Thur, Oct 12
Brought to you by [Leesa](
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Editorâs note: In yesterdayâs email, we incorrectly stated that Howard Schultz visited Houston in the wake of Hurricane Katrina. That shouldâve read Hurricane Harvey. Apologies for the error, and many thanks to you guys, who care enough to point out our screw ups.
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Amazon businesses are now being sold for millions
More than half of Amazonâs $10B in sales come through third-party sellers.
Now, thanks to the Amazonâs [fulfillment program]( (which gives sellers a better chance at being a seller in the âadd to cartâ button), these vendors are being [bought and sold for millions]( for as much as 23x their monthly profits.
This ecommerce âgold rushâ has created a thriving cottage industry of companies whose sole purpose is broker these deals -- like Flippa, an eBay-esque marketplace that allows buyers to bid on businesses, and sees nearly 150 business sales a day (from which it takes a 15% cut).
Who are these people?
Much like a real estate agent, these brokers will evaluate the business based on sales, customer reviews, and product selection, then present owners with a number of offers from buyers.
The most valuable Amazon vendors are 3-5 years old, have an established brand, have their own exclusive products and, of course, ship through Amazon.
Empire Flippers, for example, brokered 58 deals last quarter -- including the sale of an [athletic company for $1.7m](.
Only one hitch
Amazonâs not making it easy for businesses to change hands.Â
Transferring Amazon seller accounts is prohibited, meaning the new owner has to establish a new seller account and start from scratch by earning good ratings and reviews.
Now that these big-ticket sales are becoming more common, Amazon has agreed to review transfers on a case-by-case basis.
Not to mention, theyâre putting all of their eggs in one basket
Albeit, a very large, successful one.
As some brokers acknowledge, itâs pretty risky to buy and flip businesses that rely completely on a single platform that could change its policies at the drop of the hat and leave them high and dry.
Flippinâ ecommerce
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The EU is cracking down on big tech, and itâs only going to get worse
EU regulators have been very aggressive in policing US tech titans like Apple and Facebook [lately]( arguing that many of them have unfair -- and in some cases illegal -- [advantages]( over competitors.
And their recent plans to impose heftier taxes and increase fines suggest they have no intention of lightening up.
Layinâ down the law
Last month EU regulators proposed new [mandates]( that will tax companies with digital revenue and âwithholdâ tax on digital transactions with companies outside the EU.
They also plan to implement a new data regulatory process that will give EU citizens more info on what data their tech collects and why. Failure to comply will result in fines of up to 4% of the companyâs global annual revenue.
Some companies are worried this will stifle innovation
Ok, itâs really just US companies -- but the EU is standing strong, claiming that itâs all being done to âeven the playing field.âÂ
That and to keep US tech giants honest when it comes to things like factual reporting, data protection, and tax compliance. Ya know, all of those fun issues we tend to âoverlookâ stateside.
[EU DGAF](
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Alibaba gettinâ stanky on R&D: throwing $15B into new research labs
Yesterday, Alibaba CTO Jeff Zhang announced the company will drop $15B on a program consisting of 7 new research and development labs [worldwide](.
The effort is part of Alibabaâs goal to grow into a global tech juggernaut to compete with the likes of Google, Microsoft, and their main muse, Amazon.
And they call the program⦠DAMO
DAMO, which stands for Discovery, Adventure, Momentum, and Outlook (because of course it does), will focus on âfoundational and disruptive technology research.â
Data intel, natural-language processing, quantum computing, and machine learning, are among the areas they will be focusing on in order to develop technology to be used by Alibaba and other third parties.
And theyâve already formed a pretty beefy advisory board with the likes of famed geneticist George Church (founder of the [Personal Genome Project]( and Jeannette Wing (former vice president at Microsoft Research).
Alibabaâs not messinâ
The funding for DAMO is nearly double the $2.5B Alibaba spent on âproduct developmentâ during the fiscal year ending in March 2017 -- showing that Alibaba is chomping at the bit to move out of e-commerce and into other areas of technology.
Theyâve already invested in cloud computing, AI, and recently the Tmall Genie X1, a home assistant similar to the Amazon Echo.
In other words, whatever Amazon does, they want to do better.
[Great companies steal](
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Switzerland flushes $2m worth of gold down the toilet every year
A [recent study]( commissioned by the Swiss Federal Office for the Environment has found that roughly 43 kg (95 lbs) of gold -- about $2m worth at current market value -- passes through the countryâs wastewater in the average year.
After examining 64 water treatment plants, researchers concluded that the gold is likely runoff from Swiss gold refineries and watchmakers.
Which makes sense consideringâ¦
A staggering 70% of the worldâs gold supply is refined there.
Gold is to Switzerland what wine is to France -- or what crushing student debt is to America. In a given year, between [1.5 and 2.5 metric tons]( of raw gold are imported there, purified, and made into gold bars.
Residual wasteÂ
Due to this massive volume, all the tiny, almost imperceptible flakes of gold that are flushed down the drain with other forms of waste add up to a pretty substantial amount. And itâs not just gold: the waterways also contain 3k kg (6.5k lbs) of [silver]( valued at $1.8m.
But donât catch a flight to Switzerland yet, researchers have found that these riches are so [intermingled with poop]( and sludge that itâs not actually possible to recover them.
[Donât go chasing waterways](
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let's hang out
Con Con on Nov 16: Terrific idea, terrible name
Hey Party People,
After 2 years at The Hustle, you know what still shocks me? The way this company got started.
See, Sam and John thought the current media landscape was crap -- full of content that was either fluffy and mindless, or dense and unrelatable. So, they started The Hustle. And by understanding the power of content, they were able to build a business thatâs used by hundreds of thousands of people, 5 days a week.
Thatâs why weâre hosting [Con Con]( -- a one-day content conference with an awesomely awful name and amazing speakers. Come for content strategies from experts, stay for the tactics you can actually apply to your business.
Con Conâs happening on November 16 in San Francisco and for a few days, tickets are just $150, but soon theyâll increase to $200, so donât sleep on it.
Sound interesting? [Click here]( to find out more about the event.
â Kera, chief parallel parker at The Hustle
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things you should...
ATTEND: Rise and Grind Biohacking, Wednesday Oct 18th, $15
Weâre hosting the founders of Soylent and HVMN to talk bio-science, life optimization, and how theyâve built their companies. Youâll also get to meet 150 other Hustlers.
[YOU COMIN'? â](
LIQUIFY: Fruit and ice in seconds, $83
The Ninja Blender is the perfect alternative for people who donât want to take out a mortgage for a kitchen appliance. At an affordable price point, the Nina is a lean, mean, blending machine -- so youâre not left with frozen chunks of ânanners in your breakfast smoothie.
[ICE TO SNOW IN SECONDS â](
READ: The Patriarch: The Remarkable Life of Joseph P. Kennedy, $12.25
If you know the story of Joseph Kennedy (father of JFK) then you know the story of America. Kennedy was two parts entrepreneur (one of the richest Americans at the time), one part politician, and just a tad shady. Amazing read for anyone looking for inspiration for building a big business.
[SPOILER: HE WASNâT ACTUALLY A BOOTLEGGER â](
BE: A role model, not a male model with Bonobos, 20% off
You know whatâs cooler than a black and white photograph of a shirtless man intensely squinting into the distance towards an object that will never appear? Contributing to the world in a way thatâs uniquely your own. Or at least thatâs the idea behind Bonobosâ new campaign, which celebrates every man for his individuality. New customers use code GETSTARTED20 for 20% their order.
[THE BEST TYPE OF MODEL â](
IMPROVE: Your life, with PHLUR candles, $10 off
Ok, that sounds like an exaggeration, but really these candles are worth it. They smell amazing, are sustainably made, and come in custom made ceramic bowls that you can use to remind yourself all the good-time smells youâve had after itâs gone. Hustle readers get $10 off their 1st purchase.
[NOTHING TO SNIFF AT â](
This edition of The Hustle was brought to you by
Ask for forgiveness, not permission
Thatâs how marriage works, right? Not so much.
See, back when my wife Jess and I first moved to Austin, we were sleeping on a broken mattress I bought off Craigslist. It had a sinkhole in the middle, so it basically felt like sleeping in a fishbowl. Romantic, no?
So one day, I decided to do what any good husband would -- I surprised her with a brand new mattress from [Leesa]( and set it all up before she got home.
Except, it didnât exactly go over as planned. Jess was⦠displeased that I just threw out our bed and dropped a couple hundo on a new one without asking her.
Thank God for [Leesa](
Luckily (for both of us), Leesa won her over. Their mattress has that [3-layer foam action]( with ventilation for hot sleepers (me), plus [enough support]( to keep us from rolling to the middle of the bed every night. Adios, fishbowl.
Ditch the Craigslist bed and [check out out Leesaâs mattresses]( (starting at $525 with free shipping) -- but maybe check with your S.O. first.
-- Adam âFull of Surprisesâ Ryan
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