Pattern - Ecommerce Brand Accelerator

As an eCommerce accelerator, Pattern has helped retail brands grow and sell their product globally on eCommerce marketplaces since 2013.

Feb 23, 2022

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Snapshot

Founded in 2013 and headquartered in Utah, Pattern serves as an authorized marketplace seller for consumer brands and helps them grow their e-commerce sales. Pattern takes over complete responsibility for its client’s presence on marketplaces and tracks and reports key success metrics to them.

Pattern works with over 100 brands and leverages its expertise and proprietary technology to sell their products across marketplaces. It has grown to become the 3rd largest seller on Amazon in the world and also sells products across the likes of Walmart.com, MercadoLibre, JD.com, Noon, Tmall, eBay, Lazada and others.

To date, Pattern has raised a total of $277M in funding over 2 rounds. The company’s last round valued it at a $2B pre-money valuation.

About Pattern: Website, LinkedIn

Business Overview and Products

Pattern’s core business is its Partnership Model. Once a brand partners with them, it buys the client’s inventory and sells it on their behalf on online marketplaces. This drives up sales figures immediately for clients. In addition to this, there are integrated solutions that are provided as part of the partnership, which include:

Insights and reporting – monitor live performance
Advertising and SEO – optimize advertising campaigns
Creative Strategy – enhance creative strategy
Brand Protection – protect brand from unauthorized sellers
Logistics and Fulfillment – accelerate logistics and fulfillment outcomes
Global Marketplace Management – proactively manage brand presence
Ecommerce Consulting – expand to global marketplaces

Pattern provides e-commerce expertise across North America, Europe, Asia, Latin America, MENA region, Australia and India.

How it works

The unique thing about Pattern is that it does not simply offer its clients a software program or consultation about marketing strategies for their products. Instead, it purchases their stock of inventory, allowing clients’ sales figures to shoot up. Then Pattern optimizes these sales by figuring out where the problems are and fixing them.

Once inventory is bought from a partner, it is sold in the first few months on their behalf on Amazon and other marketplaces. When the stock depletes, it is replenished from the partner as it is sold. Here onwards, Pattern works with its partner to boost sales. It deploys its expertise of international consultants, brand managers, marketplace scientists, customer support representatives, advertising and logistics specialists to assist the partner.

Once orders are booked and sales are made, Pattern takes full responsibility of ensuring product quality and customers receiving their products in good delivery time. Pattern’s distribution centers are spread out across the regions they operate in. For distribution of product, there are 75+ quality controls in place and two different programs from Amazon are utilized:

FBA (Fulfilled By Amazon): Amazon's warehousing and fulfillment service that allows sellers to send inventory to an Amazon warehouse and have their orders shipped by Amazon
FBM (Fulfilled By Merchant): Fulfillment method in which the seller (Pattern, in this case) takes full responsibility for storing inventory and shipping orders.

To manage revenue growth and brand control, Pattern then uses critical data insights from its one-of-a-kind proprietary software called Predict. This software tracks pricing, handles forecasting, manages reviews, and reverse-engineers SEO algorithms. Another software is an automated advertising technology that identifies arbitrage opportunities, pricing inefficiencies, and emerging trends using mathematical formulas that predict marketplace movements.

The last aspect of e-commerce selling is global expansion. Once the client’s product is stabilized and growing on Amazon and other domestic marketplaces, Pattern researches global expansion opportunities for the client which can help them enter and expand to other markets.

Business Model and Pricing

To sell products on Amazon, a business normally gets charged several kinds of fees, including base accrual fees, damage and freight allowance fees, and more. Pattern consolidates these multiple costs into a single subsidized fee. Within this fee, Pattern provides all services that are needed by clients to grow their brands on an eCommerce platform.

At the onset of the partnership, Pattern pays upfront for the inventory that it buys and then markets it across different platforms. Pattern has grown sales for brands from $3M to $26M.

Traction

From its humble beginnings, Pattern was able to generate good revenue growth exceeding 300% for 4 years. In 2018 Amazon’s online marketplaces produced around $123B in revenue, where more than half of the units were sold via its 4M 3rd-party sellers. Revenue-wise, Pattern has been cited consistently as a top-5 seller among the top sellers to have contributed to those numbers.

In 2020, co-founder Melanie Alder stated that the company was on track to generate $500M in revenue for the year. According to an October 2021 article, the company is expecting to exceed $1B in revenue in 2022. In the next few years, Patterns founders envision big plans for their company. They see the company continuing to develop its technology and expand its global presence to reach even more brands around the world.

Pattern now has more than 900 employees, and works with over 100 brands globally. It also has 100+ global ecommerce consultants to help its partner brands boost their sales on the global marketplace. It has operations in 18 countries.

Founder(s) & Team

Melanie Alder: Founder and CIO. Before Pattern, Melanie served as a Real estate executive for 11 years, while also co-founding RTO Investors where she served as managing partner.

David Wright: Founder and CEO. Before Pattern, David spent his career as a data fanatic and technology executive. He served as a database team manager for 5 years.

History and Evolution

The company was founded by David Wright and Melanie Alder in 2013. It started off by the name of iServe, with David and Melaine selling fridge magnets and other small products on Amazon from Melanie’s apartment. From the beginning, Pattern faced steep marketplace regulations and stiff competition as it navigated the ecommerce world.

In 2014, iServe launched an ecommerce software for pricing protection and control called TriGuardian. It also formally moved its headquarters into a small office in Utah. Within the next 2 years, iServe scaled up its operations and moved into a larger warehouse for conducting them. By 2016, iServe had opened warehouses in Kentucky and Toronto, and with the business growing the founders took their first-ever paycheck 3 years after having started the company.

In 2018, iServe acquired a global ecommerce consultancy called Practicology. This marked a pivotal point for the company as Practicology was based out of London and it provided iServe a good base for deeply penetrating the European market. It also rebranded itself to “Pattern” at this point, while expanding its marketplace expertise to clients in Europe, MENA, China, and Australia.

It was in 2019 that Pattern finally launched its authorized marketplace seller model internationally, and began representing brands on Amazon in Europe, the UAE and Australia. By 2020 Pattern launched its Amazon business in KSA and began representing brands on Noon too. After a funding round of $225M in October 2021, Pattern achieved a $2B valuation.

Pattern now operates in over 7 regions across the world, and has global offices in 10 countries. With its newly secured funding, Pattern plans to extend its global presence, reach more brands and develop its tech and services platform.

Additional Learnings

Pattern is now Utah’s first female founded/co-founded unicorn, as well as one of the largest raises by an ecommerce accelerator.
Pattern has announced a Marketplace Performance Score to help brands maximize e-commerce revenue. Developed in-house, MPS measures the performance of a brand's best product based on three key drivers and 16 dimensions that impact a brand’s revenue growth.
In February 2022, Pattern acquired Amplifi.io, a digital asset management and product information management platform. Amplifi’s technology will help Pattern’s partner brands to boost their products on more ecommerce platforms.
Pattern allows partners to back out of a partnership if they are unhappy with results. It currently has a 98% client retention rate.

Market Snapshot

In 2021, the global e-commerce retail market stands at $6T. It is expected to grow by 53% by 2024.
In 2021 alone, ecommerce accelerators like Pattern and its competitors raised nearly $600M in funding.
Pattern’s past performance has indicated that in the first year of partnership, clients achieve 40% revenue growth and 100% review responses.
Pattern has secured six registered trademarks in the advertising business category. These trademarks protect the intellectual properties that were developed by Pattern for its express use.

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