This is the third entry in my deep dives sponsored by Tegus series. The goal of these are simple: every month, Tegus is going to give me a few expert interviews and I’m going to use those to dive into an investing topic. Some months, it could just be a dive into a specific company; other months, it might be a dive into an industry. You can find the
Vy interesting. Owned PRTY last year after noting the CAS investment and doing some research. Have debated buying back in given the decrease of late. Thought they'd advance sales a bit more than they did last year, and am a little concerned about historical management performance.
On the Amazon issue, I noticed on the napkin listing on Amazon that Amscan is listed as the mfr and that there are two sellers selling below $5. The others are selling for $7.95 and higher. My business sells on various Amazon US and international sites and it's something I've been doing for 20 years. I do agree that selling cheap items and licensed items are moats for a B&M retailer. Additionally, I know that a lot of PRTY customers go to the physical stores for ideas and buy a variety of items at that time. The idea generation process is a little more difficult on a site like Amazon.
Finally, I'm not sure how sophisticated the PRTY brand management team is re Amazon, but they're missing the boat in a number of ways. The significant price discrepancies on that napkin suggests there may be some counterfeit selling; they should have some employees nonstop looking for counterfeits and unauthorized sellers. Additionally, they have a store page, but most of the Amscan listings don't link to it. In fact, it appears that many of the Amscan product pages were created via spreadsheet upload by someone who forgot to capitalize the brand name - so dumb. There's no consistency of branding on Amazon - is it Amscan, is it Party City??? There's no A+ content on any product page so far as I can tell - more unused branding real estate. Why not have cross sell content on every product page? Party City is a 3P seller of a few items, but most are being sold by other sellers. Why give away Amazon retail margin to Amazon and other 3P sellers? Using Amazon Transparency barcodes, and cutting off the wholesale accounts who are selling on Amazon, PRTY could relatively easily usurp that additional margin and likely expand it a bit given they'd now have pricing control and zero selling competition on almost all of their products. It just doesn't make sense to give away your brand like that. Though the store page is nice, their overall brand management on Amazon is just horrendous. There's a lot of low hanging fruit there. I'm not sure who runs that for them, but it makes me queasy as a SH to see a company missing so many obvious opportunities.
Vy interesting. Owned PRTY last year after noting the CAS investment and doing some research. Have debated buying back in given the decrease of late. Thought they'd advance sales a bit more than they did last year, and am a little concerned about historical management performance.
On the Amazon issue, I noticed on the napkin listing on Amazon that Amscan is listed as the mfr and that there are two sellers selling below $5. The others are selling for $7.95 and higher. My business sells on various Amazon US and international sites and it's something I've been doing for 20 years. I do agree that selling cheap items and licensed items are moats for a B&M retailer. Additionally, I know that a lot of PRTY customers go to the physical stores for ideas and buy a variety of items at that time. The idea generation process is a little more difficult on a site like Amazon.
Finally, I'm not sure how sophisticated the PRTY brand management team is re Amazon, but they're missing the boat in a number of ways. The significant price discrepancies on that napkin suggests there may be some counterfeit selling; they should have some employees nonstop looking for counterfeits and unauthorized sellers. Additionally, they have a store page, but most of the Amscan listings don't link to it. In fact, it appears that many of the Amscan product pages were created via spreadsheet upload by someone who forgot to capitalize the brand name - so dumb. There's no consistency of branding on Amazon - is it Amscan, is it Party City??? There's no A+ content on any product page so far as I can tell - more unused branding real estate. Why not have cross sell content on every product page? Party City is a 3P seller of a few items, but most are being sold by other sellers. Why give away Amazon retail margin to Amazon and other 3P sellers? Using Amazon Transparency barcodes, and cutting off the wholesale accounts who are selling on Amazon, PRTY could relatively easily usurp that additional margin and likely expand it a bit given they'd now have pricing control and zero selling competition on almost all of their products. It just doesn't make sense to give away your brand like that. Though the store page is nice, their overall brand management on Amazon is just horrendous. There's a lot of low hanging fruit there. I'm not sure who runs that for them, but it makes me queasy as a SH to see a company missing so many obvious opportunities.
Love your stuff man. With PRTY. There's no cash flow. Can you add/address that in your bear thesis?
down 50% today!