I was trying to buy some toothpicks, so who better than Amazon’s biggest 3P seller, who happens to specialize in personal health?
Well apparently they didn’t make any money (despite pulling over a million / day in revenue) because they went bankrupt last year. That’s pretty crazy. Not only were they the biggest seller, but they were also FBM which is incredibly rare for any big sellers.
I thought amazon owned them???
Nah, their offers were FBM, and they also had their own site, pharmapacks.com that had a storefront (now it’s just a 403 error page).
Their fulfillment network was their downfall (they essentially built a huge network to process future sales, but didn’t have the cash to burn to stay alive). They were spending more money on fulfillment and warehouse rent than COGS. They had 47% gross margins and were LOSING money. That’s nuts.
I have 3 letters for them. F B A
They had a huge catalog and we had to compete with them on a lot of ASIN.
They were going to go public so spent a ton on building another operation on the west coast.
It fell thru then they had a pile of bills on the constructions which crushed them.
They were definitely big and probably would still be going today but instead of taking a step up a ladder it was a step off a cliff.
Yeah, I saw an article about that, they hit some bad timing as the entire SP AC market bombed at the time.
They basically spent a ton of money they were expecting to get when the deal closed and it just didn’t happen. They also never made a dime, so they were living on borrowed money, which works when interest rates are 0. The interest rate hikes killed off a lot of businesses that operated this way.
I just saw them on amazon. unless someone took over their name? or it’s a copycat name?
Can you link the storefront?
If they dont have like 100K+ lifetime reviews it’s probably a copycat.
They followed the Amazon model for growth, but needed more capital at the wrong time.
There’s more problems than that. They were running at like -20% profit. Don’t think Amazon ever ran that deep into the red.
Amazon built out their fulfillment network when there was low competition for warehouse space and warehouse employees. Amazon, Walmart, and countless other 3PL companies are competing for warehouse space and employees now. So Pharmapacks was basically trying to leverage up to build out something in an industry that’s highly competitive and expensive, whereas Amazon did it while it was cheap.
They still have stock in FBA on certain items. Looks like they just are just letting sell out.
I am a bit surprised they just abruptly went into liquidation mode like that. You would think their Amazon account with it’s name and selling history would have some value in a sale.
I believe this all started mid 2022. (Jul/Aug)
Yeah, but they just decided to go into liquidation, no plans for any kind of sale (of at least their IP/seller account). At least there’s nothing documented about them trying to sell.
My guess the debt was too large for anyone to “take over” the operation. For that kind of money in play they can start from scratch and advertise themselves