The advent of the internet ushered in a new era of commerce. Companies from all industries saw an opportunity to expand their reach and access their client in a way previously unimagined. Fast forward to 30 years later, e-commerce has fully matured into an industry, including $180 billion invested into buying and aggregating e-commerce brands to date. Peoples Equity Group, known for managing assets for passive investors, scaling the brands up, and exiting them in rollups to private equity companies for much higher multiples or valuations, is one example of these e-commerce aggregators. They allow smaller non-institutional investors to participate in the growth of e-commerce acquisitions while providing a passively managed return for the participant.
“When a new investor joins, we walk them through how it works. We show them our portfolio and explain how we vetted the investment portfolio. I review and manage each business every month to check on their progress and ensure that the business is making a profit.” Says Dakota Smith, COO of Peoples Equity Group.
Historically, online shops have had difficulty attracting investors, partly due to confusion about the e-commerce space and how it works. After COVID, e-commerce saw ten years of growth in the 1st quarter of 2020. Since then, over $12 billion has been invested in e-commerce aggregators in the last 12 months.
95% of the e-commerce aggregation market has been centralized around Amazon and has become a crowded platform. There are now over 100 aggregators in the e-commerce space. However, investors are often left wondering, “Why should I invest with this company? Or this particular manager?”
The answer to this is simple: investors should participate in companies that have differentiated themselves from other models in the industry. Distinguishing yourself in the industry is one of the critical ways to successful investing. Peoples Equity Group’s model is simple; they looked at the other prominent players in the industry and identified where the point of arbitrage was. Amazon was a third-party platform you don’t control that can shut you down at any given moment.
They buy direct-to-consumer sites such as Shopify, where they control all the data, whereas Amazon owns that data. “We work with accredited and institutional investors that are tired of their real estate returns dwindling due to a crowded market and looking to put capital into alternative or technology investing. People are looking for guidance right now, with the market being as volatile as possible. And we pride ourselves in offering a stable yet aggressive solution to help people diversify their investment portfolio.” says Dakota Smith.