Introducing Spott: Finally, Financial Services for E-commerce Sellers
I’ve always been energized by the boundless potential of a truly borderless e-commerce space, and I’ve spent tens of thousands of hours happily immersed in this exciting realm. During my tenure as founder and CEO of Borderfree and Payoneer, I became well-versed in the trends, challenges, and opportunities inherent to the space.
Since I started building companies back in 1999, the e-commerce landscape has evolved at a spectacular rate. In fact, as an Amazon store owner myself, I’ve experienced first-hand how competitive the market has become. I’ve also grown familiar with the litany of pain points confronting online sellers, particularly when it comes to their attempts to access conventional financial services.
At Team8’s Fintech foundry, we take pride in building companies that address industry-wide pain points, and engage in a rigorous ideation process to identify new market opportunities. Very often, the best inspiration for those companies comes from on-the-ground experience and deep market understanding. For me, that was absolutely the case with Spott — a first-of-its-kind e-commerce empowerment platform, offering, as a first product, frictionless liability insurance and a suite of additional financial services for the benefit of the online sellers to help them continue to grow their businesses.
As millions of solo entrepreneurs and SMBs surf the wave of a global mega-trend – the pandemic-fueled shift to a digital shopping experience – we’ve seen a huge spike in the number of e-commerce sellers on Direct-to-Consumer (D2C) commerce platforms like Shopify, as well as marketplaces such as Amazon and Walmart. Indeed, over the past year, Amazon onboarded a remarkable 3,700 new sellers per day. Yet, in today’s highly dynamic digital economy, it’s survival of the fittest. Online sellers need first and foremost to protect their business. But they also need to be extremely agile, and well-capitalized to adapt and respond quickly to new opportunities and trends. Just like brick and mortar store owners, they need affordable access to insurance and other financial services to build sustainable businesses.
A market in need of insurance coverage
With a high mortality rate for Amazon stores, it’s clear that innovative fintech solutions are needed to facilitate seller longevity. So what could prompt better success rates for sellers? Well, success starts with financial stability — having a robust layer of protection in place that will allow for future growth and prosperity. In the world of e-commerce, insurance is this foundational layer. Let me explain.
In order to maintain a high quality of service, online marketplaces have historically serviced claims on behalf of sellers to make it easy for customers to return faulty products, without liaising with the original seller. Now, given the rapidly growing class of 3rd party sellers, leading marketplaces like Walmart and Amazon are mandating that sellers take out their own liability insurance policy, in an effort to offset their risk. The problem is that sellers have a tough time obtaining insurance products that align with their needs. Traditional insurers often misprice policies due to an anachronistic view of e-commerce stores and a limited understanding of the niche markets they serve. They also have a hard time distinguishing between the unique risk profiles of certain types of products – hair dryers are clearly more susceptible to injury-related legal claims than socks – so they shouldn’t be subjected to the same grading criteria when it comes to liability insurance. Sadly, this isn’t always the case.
To remedy the inequity, insurers need better underwriting tools to enable more sophisticated risk profiling of online businesses. The assessment criteria should never be ‘one-size-fits-all.’ For example, the number of employees on a seller’s payroll – a key data point for a brick-and-mortar retailer – isn’t relevant for a million dollar e-commerce operation with, in many cases, a staff of one. What’s important in the context of e-commerce is understanding the seller’s brand proposition, niche product offering, and supply chain ecosystem, as well as broader market trends. Without a proper framework to underwrite e-commerce insurance policies, sellers end up paying exorbitant fees that cut into cash flow, or get hit with debilitating terms for the services they need.
The Spott difference
The reality of this uneven playing field inspired us to partner with Guy Salame, Amit Batzir, and Roma Bronstein to launch Spott. They are the perfect team with the right background in e-commerce, data analysis, risk management, and insurtech to drive a sea-change in how e-commerce sellers access insurance and other key financial services. By their very nature, online sellers operate in a virtual, data-rich universe where information about their products, pricing, marketing tactics, and market dynamics are all in the public domain. But gathering and making sense of that information to provide accessible, customized solutions requires a dedicated platform and deep domain expertise in the field of e-commerce.
Powered by AI and machine learning technology, Spott is the world’s first e-commerce digital insurance platform to accurately assess e-commerce business risk, and offer financial services that are uniquely tailored to online sellers. To support the seller ecosystem, Spott is partnering with leading insurance carriers and brokers who can leverage Spott for underwriting purposes, and provide sellers with seamless access to quotes and policies that offer the right level of coverage at an optimal cost, and with manageable payment terms.
The partner of choice for e-commerce sellers
Spott is launching a liability insurance product as the centerpiece of its financial services offering because there is an immediate, growing demand for this type of solution – spurred by changes in Amazon’s terms of engagement for sellers. But the platform’s underlying technology can adapt to sellers’ ever changing business needs, and also proactively help e-commerce sellers mitigate risks linked to marketplace account suspensions, supply chain issues, list hijacking, counterfeiting and more. To facilitate seller growth, Spott’s innovative financing services can be used to help sellers access the capital needed to boost sales volume, launch new products, expand to new marketplaces, increase marketing activities and broaden geographic reach – all without taking on any unnecessary liabilities.
Spott’s technology, risk assessment capabilities and deep understanding of e-commerce dynamics will not only democratize access to financial services for sellers, it will protect and empower a budding class of online retailers and unlock new growth opportunities for millions of e-commerce businesses around the world. I couldn’t be more excited about Spott’s future and the positive impact they’ll have in helping to define a more competitive and inclusive online economy for decades to come.
To learn more about Spott, visit www.spottme.com