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