TL;DR: Anvyl is uniquely positioned to gain market share because of its streamlined approach to supply chain management and projected growth in the overall direct-to-consumer (D2C) sector. This summer, “supply chain as a service” startup Anvyl raised $9.3 million in Series A funding led by Redpoint Ventures, with participation from existing investors First Round Capital and Company Ventures - a continuation of VCs capitalizing on the shift in tastes from legacy mass-market brands towards smaller direct to consumer (D2C) brands, especially among younger consumers. Anvyl is particularly positioned for success in this space because the platform’s workflow streamlines a notorious pain point for entrepreneurs in a comprehensive and user-friendly way.

Supply chain management is especially irksome in part because the manufacturing process has multiple points of failure – including (but not limited to) shady vendors/middlemen, miscommunication across language/cultural barriers, and defective or incorrectly made products –risks that can cost entrepreneurs significant amounts of time and money. The sector’s reliance on piecemeal modes of communication, such as email or phone, and opaque processes exacerbate said risks. This is especially true for D2C brands that usually have a small number of employees, some of which are solely operated by the entrepreneurs themselves. D2C entrepreneurs are typically located far from suppliers, limiting their ability to know entirely what’s happening throughout the production process. Additionally, some entrepreneurs don’t have the necessary supply chain and manufacturing expertise and are learning as they develop their products, which can be risky and expensive. Entrepreneurs want to spend their time building their businesses and ideating new products, not vetting dozens of suppliers on listing sites and putting out logistical fires. For service providers to stand out in the supply chain space, their platforms must be able to make the manufacturing process transparent and easy to understand. They should facilitate bringing the product vision to life with a high level of quality, as well as minimize the time entrepreneurs spend on supply chain tasks.

Anvyl’s visually appealing platform not only makes the manufacturing process extremely easy for entrepreneurs, but it also does so at such a high level of detail that it ensures a quality product. This is punctuated by high praise from executives of popular D2C brands such as Harry’s, Hims, and S’well. The platform centers comminution around shared workspaces and chat rooms, rather than email, facilitating clearer communication between the entrepreneurs and the suppliers. The platform makes an effort to reduce the amount of tedious manual tasks for entrepreneurs with time-saving features such as automatic follow-up messages, a Purchase Order Queue that automatically tracks orders, and third-party logistics integration. Additionally, Anvyl streamlines and digitizes the RFQ process, matching entrepreneurs with their pool of suppliers and quickly providing estimates, making it easy for them to shop around for the best supplier. Entrepreneurs can use the Parts Library to create and organize product specifications. What I found notable is how Anvyl vets their suppliers not just for quality but also for fair labor practices and eco-friendliness. This is helpful for smaller brands that might lack the resources to ensure such high standards but fears coming under scrutiny for their supplier’s shady business practices. Anvyl simplifies the most tedious aspects of the supply chain and ensures a quality product with a minimal amount of effort on the part of the entrepreneur, which differentiates the platform from its competition.

Sourcify, Anvyl’s closest competitor, is no slouch. They boast a 92% conversion rate with an average of $30,000 per order. Outside of one UI screenshot and a summary of their workflow, there isn’t much public information on Sourcify’s functionality on their website, making it difficult to draw a fair comparison to Anvyl. Both platforms offer demos upon request, and both companies validate requests from potential clients. To maintain my ethical standards, I’m relying on publicly available information. From what is available, Sourcify appears to have a comparable set of features – purchase order management, third-party logistics integration, and messaging. It is unclear if Sourcify has features such as automatic follow-up, shared workspaces, or supplier CRM. Out of the features it does share with Anvyl, it is unclear if the functionality is as robust as its competitor. To be fair, Sourcify might have more functionality than shown on its website. However, if that is true, it’s not clear. A couple of advantages that Sourcify does have is a wide and diverse reach – the platform supports 100 different product categories with 5-10 factories per category, and boasts a library of resources to help entrepreneurs navigate the world of manufacturing (which was helpful for this article), and has a clear pricing structure ($500 + 1-10% of the total order cost) – all of which Anvyl either doesn’t have or will not make public. Details about Sourcify’s functionality are sparse, making it difficult to assess the platform’s ability to provide a streamlined supply chain management experience for entrepreneurs. However, given the advantages Sourcify does have, I wouldn’t fully count the platform out. I’m curious about what they decide to share in the future.

Anvyl’s other competitors require a great deal of manual due diligence and constant follow-up. Some service providers, like Maker’s Row, are robust, highly curated directories of supplies but lack any supply-chain infrastructure. This is ideal for entrepreneurs with time and/or experience but not so much for those without. Others, like Alibaba, have a disproportionate amount of trading companies, middlemen often masquerading as manufacturers, listing on the site. Working with trading companies can be risky because the entity manufacturing the product is often unclear to the entrepreneur, making it hard to hold anyone accountable when the products are defective or when the trading company ghosts. Not to mention that trading companies’ fees shrink profit margins. While Anvyl and Sourcify have other competitors, none seem to make the manufacturing process any less tedious, expensive, and time-consuming for entrepreneurs of start-up D2C brands.

The best companies to me are those who thrive off of a customer base of their own making; service providers like Shopify, Lumi, and Stripe are prime examples. These companies lifted barriers to entry by streamlining a specific aspect of e-commerce - marketing, packaging, distribution, etc. – into user-friendly platforms that allow entrepreneurs to build a cohesive, high-quality brand presence with minimal effort from the entrepreneur. Because of these e-commerce service providers, it has never been easier to create a small D2C brand than now. Because of this, it’s inevitable that new D2C brands, made possible by any combination of the e-commerce service providers currently on the market, will pop up over the next few years. The big winners of that trend will not be the brands themselves but the service providers. The success of any individual D2C brand is dependent on a variety of factors that are subjective and vary from brand to brand. Regardless of if a brand is successful or not, they all must go through the same service providers to operate at scale, at least when starting out. More D2C brands mean more business for service providers. Even if some brands close, providers will still profit, as monthly subscription fees will have already been paid over the life of a defunct brand. Additionally, because the barrier to entry is so low, shuttered brands can be easily replenished by newer brands. The growth of e-commerce service providers is linked to the growth of the e-commerce sector – an easier bet to make than the success of any one brand.

Supply chain, inventory, and manufacturing are notorious for being a hassle. It’s why startups have historically tended to avoid selling products, and it’s one of the last e-commerce gaps to be tackled by tech companies. It’s also why Anvyl can win big. The platform that can make manufacturing quality products as easy as building a website will benefit from an economic moat. Barring incredible circumstances, a new competitor’s platform wouldn’t be able to grow fast enough to take market share simply due to the amount of time and coordination needed to build a comparable supply chain solution. The Anyvl platform is unique in its ability to streamline the supply chain at a high level of detail and facilitate the manufacturing of quality products, which will help Anvyl win market share and underpin a new generation of D2C startups and micro brands.