E-Commerce Economics Are Broken, Says Tech Startup Tradeswell. It Has A Plan To Help Fix Them.
Paul Palmieri was looking at various direct-to-consumer startups as possible investments for his venture capital fund when he decided the e-commerce economics didn’t add up.
“I definitely saw a lot of opportunity to invest in direct to consumer brands, but every time we would get close, we would look at it and say, gosh, the numbers are somewhat broken,” he said.
While the sales potential is great, the fees brands pay to what Palmieri calls the ecosystem of e-commerce enablers—for advertising, for keywords, for warehousing, for fulfillment—are destroying margins.
So instead of investing in a DTC brand, Palmieri decided to invest in starting a company that would help brands large and small master the new math of e-commerce.
The company, Tradeswell, emerged from stealth mode last week after beta testing its platform since the beginning of this year.
The platform uses artificial intelligence to analyze a brand’s data and performance on e-commerce marketplaces and help them make better decisions to maximize their margins.
Palmieri likes to describe Tradeswell as a Bloomberg terminal for e-commerce.
“We’re the first algorithmic trading platform for e-commerce brands to trade their goods at the speed and velocity of today’s markets,” Palmieri said.
While it doesn’t doesn’t directly trade goods (at least not yet), Tradeswell can automate functions like keyword bidding for better search and marketing results, or advise brands which of the marketplaces they are operating on—i.e. Amazon
Brands who sign on with Tradeswell allow the platform to access their e-commerce data and the platform uses artificial intelligence to “reveal insights