Amazon's ad business is growing faster than ever before, having recently crossed the $1 billion mark for this year's third quarter. To Teikametrics, a Boston-based startup that aims to help third-party sellers on Amazon make more money with its inventory management software, that provides a major opportunity.
Since April, the company has been selling a new software offering focused on helping sellers optimize for advertising on Amazon. According to CEO and founder Alasdair McLean-Foreman, the product now has over 1,000 paying customers with a $2.5 million annual run rate. He declined to comment on the company's overall revenue or its total number of customers, only saying that its number of sellers grew 500 percent this year.
"Things have really exploded for us," McClean-Foreman told BostInno.
Called the Retail Optimization Platform, the software uses a machine learning algorithm to help sellers optimize how much they spend on Amazon's Sponsored Products solution to increase profit margins. McLean-Foreman, who started Teikametrics in 2011 after running his own ecommerce business, said the vision of the company is to help sellers optimize their inventory and pricing. The strength of Teikametrics' ability to predict how sellers should adjust advertising spend, the CEO added, is based on billions of dollars in transactions that have run the system.
"You've got to be bidding on the right keywords. You've got to be bidding the right prices in real time. So our software is constantly calculating which keywords you should be using, which you shouldn't," McLean-Foreman said.
Teikametrics has been bootstrapped since it was founded, but McLean-Foreman said that could change soon. He said the company is exploring raising its first round of financing from investors in 2018 to accelerate its growth in the United States, India and Europe, as well as other ecommerce channels outside of Amazon.
Based in the Fort Point neighborhood, the company currently has 40 employees, with plans to double that number next year, McLean-Foreman said.
"We've only just started," he said.
