Mens’ clothing brand Untuckit is using Amazon to offload older styles — preferring the marketplace as an alternative over the traditional outlet store.
Amazon accounts for a tiny percentage of the brand’s business: About 1 percent of overall sales, according to CEO Aaron Sanandres. Untuckit claims that it is profitable, but doesn’t share revenue figures. CNBC reported in December that the company was looking to raise another round of funding (it has raised $30 million in venture capital so far) that would value it at $600 million, with sources close to the company pegging annual sales at $150 million.
But the potential of widespread exposure and ease of use makes it an efficient way to get excess inventory in front of as many customers as possible, and get it sold quickly. The strategy also makes the Untuckit site cleaner and easier to navigate new styles, as once a shirt is put on Amazon, it’s sold there exclusively.
“People talk about the downsides of selling on Amazon, but of course there’s a flip side — the amount of exposure you get is insane,” said Sanandres.
The brand first saw Amazon’s potential as a retail channel when it first incorporated Amazon Pay into its own site and saw it worked successfully. (Sanandres declined to share exact numbers.)
“There’s a massive market that only buys on Amazon. Ultimately, all I care about is, ‘Were you able to find what you wanted quickly, easily and painlessly?’ If it’s on Amazon, I’m happy. Am I thinking about the idea that we make a better margin selling ourselves? No, to be honest. Because it all goes to driving overall customer growth.”
On Amazon, Untuckit is a third-party seller with a branded shop and Fulfilled by Amazon shipping, which makes items available for Prime shipping for a fee. The brand doesn’t launch new collections or carry its latest product on Amazon — everything available is an older style that didn’t sell out. But, Untuckit still doesn’t discount the products on Amazon: It’s essentially aiming to move items faster not by marking them down, but by making them more widely available to Amazon customers.
The brand, however, is concerned that Amazon will look at its performance to create similar products of its own at more competitive prices — something it’s been known to do particularly well in commodity categories, like batteries and other household items with its AmazonBasics line. But Amazon has also made it apparent it’s encroaching on the apparel category as well, with more than 70 private-label fashion brands rolling out since 2017.
That’s why Untuckit only sells certain styles it feels comfortable putting on Amazon while keeping its new launches to the site only.
“Any company can copy your products. It’s very hard to copy a brand. Strengthening your position will protect yourself,” he said.
Other brands like J.Crew have used Amazon as an outlet for cheaper styles. Untuckit is figuring out how to use Amazon’s mass reach to its advantage at a time when most other direct-to-consumer brands are largely avoiding the platform. Even as Amazon looks to recruit more DTC sellers to its marketplace, brand founders who are building companies on top of customer data and loyalty are finding it difficult to come to terms with Amazon’s utility-driven experience. Amazon is a product-first, not brand-first, retail site, and it doesn’t share customer data specifics with sellers.
Sanandres’ reasoning ultimately comes down to Untuckit’s customers. believes that there’s a place for Untuckit on Amazon because its customer demographics are far more broad than the brand originally anticipated. It launched in 2011 as a brand targeting millennials who were dressing more casually in the workplace — hence the need for shirts that looked good and fit properly while untucked, Untuckit’s raison d’etre (although it’s since expanded to include other menswear items). But, after a few years selling online, Sanandres said the brand’s customers were far more wide-ranging from young professionals to men in their 60s. That’s helped guide where the company has expanded distribution: Some customers aren’t the type to buy a shirt online without ever seeing it in person, so the brand started opening stores. It now has 50 physical locations in the U.S. and Canada.
It’s had a similar mindset in approaching Amazon: If customers shop there, we should be there.
“When you think about growth for these new brands, it may behoove them to sell on Amazon to get exposure, and make certain products available only on their own channel,” said Frank Poore, CEO of CommerceHub. “Of course, it’s risky. Amazon doesn’t let you develop a direct relationship with that customer, and it’s kind of like a moth to a flame — you get sucked in, and then it’s hard to focus elsewhere.”
Sanandres said that customer data informs Untuckit’s strategy, both online and in its stores as they’ve opened them, and said that missing out on direct customer data by selling elsewhere is a loss. However, he added that Untuckit’s lean team can only “bite off bits of data” to process the information and act on it. It’s still working on figuring out how to use all of the data it gets through its site, so it’s able to focus on that and not the data it’s missing from Amazon.
Still, the lack of customer insight shapes conversations with other third-party retail partners, which Sanandres said have come knocking. But he’s not ruling them out.
“The answer is: There’s always a role for the multi-brand retailer. We think about that partnership differently since it’s not our first or only physical footprint. We can think more strategically around filling out our market, so we’re having those conversations.” said Sanandres. “Increased demand bodes well for everyone, and traditional retailers want to offer something new.”