An E-Commerce Roll Up (ERUP) Entity/Business aggregates smaller D2C, Internet first, E-Comm Marketplace dependent Brands that sell their products directly to customers via digital channels. This entity then supports these brands with their tech, capital muscle to increase revenue, efficiency, economies of scale and decrease costs.
Let's take example of an Amazon only (mostly) seller "Angry Orange Odor Eliminator". This is a pet odor eliminator sold on Amazon and the business was making substantial (topline/revenue) from Amazon.
Now this business would require below mentioned services in order to effectively run the business:
- Manufacturing (Fulfilled by an outsourced manufacturing company)
- Packaging (Fulfilled by an outsourced co-packer/packaging company)
- Branding/Marketing/SEO/SEM/SMM (Fulfilled by an outsourced digital marketing/media agency)
- Finance Function (internal talent / outsourced accounting firms)
- Capital (banks / Ecomm order fulfilment funding companies)
- Inventory Management / Logistics (Fedex, DHL etc.)
- Tech Tools for Website, Analytics etc. (outsourced to a web dev agency / digital marketing / internal talent)
These businesses would never be able to command the kind of service or the rock bottom rates of these services because of their small size (relative to an ERUP aggregator of brands). This is where ERUP companies come in. They bring in all (most) of these expertise inhouse or negotiate with outside vendors basis a higher bargaining power (economies of scale due to size of operation) and pass on these benefits to their inhouse brands which they have acquired.
In simple words they will acquire brands that are running successfully / modestly / poorly but have enormous potential across E-Commerce Ecosystem (Shopify / Amazon / EBay etc.) for a Fee and take over the operation from there onwards.