Most people know MerchantSpring as software — the multi-marketplace analytics platform agencies, brands and vendors run their reporting on. Fewer know it started as a marketplace agency, and that its founders closed it to go all-in on the product hiding inside.
We've been a customer at INNELS for over four years, so this was less an interview than two operators comparing notes. Co-founder and CEO Paul Sonneveld sat down with our founder Mark Zalomajev to cover the product-market-fit year, the positioning call most Amazon agency owners will argue with, and why he and James still own the company.
Paul calls MerchantSpring his third career: an IT degree he never used, nine years as a management consultant at BCG, then eight or nine years running merchandise teams at Coles. Then Catch Group — a poor fit, he says plainly: he was way too corporate, they were very entrepreneurial. Going back meant inertia: you get used to a high salary, and it becomes very hard to leave.
If I'm ever going to be entrepreneur it's either now or never."— Paul Sonneveld, Co-Founder & CEO, MerchantSpring
He and his wife agreed to give it a year. Timing did the rest: Amazon was about to enter Australia, and from Coles he knew the sales directors of large FMCG brands — flat growth, sure they needed e-commerce, no know-how to do it. Version one was an agency: marketplace management plus content.
Amazon stayed small in Australia for years — Paul compares it to Sweden, Poland or Ireland today. So they pivoted into eBay and homegrown marketplaces and were multi-marketplace from the start, which drove a lot of complexity.
Their first fix was human: VAs in the Philippines logging into marketplace backends and writing down issues. You get caught out pretty quickly, he says — you can't stay on top of the issues quickly enough. Then a client's Amazon account was suspended over a shipping issue that wasn't their fault.
But the issue was they found out before we found out, right?"— Paul Sonneveld, Co-Founder & CEO, MerchantSpring
Paul looked for a tool, found none, and built one internally.
Paul wants to do one thing and give it a 100% chance of success. Running both was the opposite.
It's pretty hard to be good at two things at the same time."— Paul Sonneveld, Co-Founder & CEO, MerchantSpring
Building software wasn't the hard part, he says — hiring engineers and shipping a product are known problems. What consumes the energy is product-market fit and acquisition. There was a positioning problem too: around 80% of MerchantSpring's client base are agencies, and agencies aren't comfortable using software from a company that also runs one.
Still, agency profits funded the platform, so they never took much external capital. A year into COVID, with work drying up, they closed it — and didn't bother selling it.
Year one went entirely to product-market fit, and Paul takes personal responsibility for the mistake that defined it. He went through the statistics, landed on roughly six million active Amazon sellers, and did the arithmetic every founder does: a $30 subscription, maybe 5% of them, a great business on paper.
Their acquisition strategy is advice he now tells people not to follow: take a lot of money and, figuratively, throw it at the wall. They ran every permutation of Google campaign they could think of, assuming two or three out of a hundred would work. Nothing really did.
The signups exposed two problems. They couldn't separate the sophisticated seller from the beginner — prospects booked demos for a complex platform, then asked how to set up an Amazon account. And those who converted churned fast: sellers with life savings in one income stream watch it like crazy.
If you think about the acquisition cost, the high churn, cost to serve, it just didn't work."— Paul Sonneveld, Co-Founder & CEO, MerchantSpring
Their second target customer became Amazon vendors, and the difference is structural. That person sits in the sales organisation of a larger business, dealing with internal meetings and processes, often covering other channels. They don't have the luxury of being 100% focused on Amazon.
That constraint makes them a great candidate for agencies too. The commercial difference flipped the economics: the vendor sales process takes longer, but once you're in, the relationship goes for much longer, with less emotion. He won't give sellers a bad reputation, but he's met plenty who get upset and pull the credit card off the subscription, contract or not.
Mark landed somewhere similar: INNELS has moved from self-made one-person operations toward brands and the managers inside them — people who know Seller Central and FBA, but not how to sell well.
MerchantSpring was funded largely out of agency profits, and Paul and James are still majority shareholders by a wide margin. His view on raising has inverted: hearing someone had raised $20 million once read as proof they'd made it. Now he sees dilution and investors breathing down your neck — colleagues ending up with 15% of their own business, reporting to a VC that wants a new head of sales.
We don't have to care about what anyone else thinks. We make our own decisions."— Paul Sonneveld, Co-Founder & CEO, MerchantSpring
He's precise about when raising is right: when you have one shot at a market and a competitor will sweep it up if you're slow. That wasn't them — Amazon, agencies, vendors, B2B is niche, and they were never going to be a unicorn. The trade was discipline: break even, burn no cash, even on a peanut salary. Their bank balance hasn't changed in five or six years, because excess goes into the next hire.
As Mark put it, the typical customer isn't on one marketplace — it's three or four today, heading toward six or eight in a few years. Asked what he'd do differently starting in 2026, Paul's answer was breadth: MerchantSpring supports 120 marketplaces, and he'd have gone wider still.
The bigger shift is profit, not reach. He used to ask US brands what they'd do with a free extra employee. Three years ago the answer was unequivocally more Amazon optimisation. Not anymore — profitability on Amazon, particularly in the US, is no longer what it was, even though GMV is still large.
Let's not become busy fools, right? Because we can keep pumping the top line, but what's the point if nothing falls to the bottom line?"— Paul Sonneveld, Co-Founder & CEO, MerchantSpring
Once the question becomes where the next incremental dollar of profit comes from, Walmart, TikTok Shop, Home Depot and Best Buy get more interesting. In Europe he points to strong country- and category-specific marketplaces that put you where your shopper already shops. On TikTok Shop he's a realist: great numbers for many agencies, but not always, and the ROI on headcount is unresolved
Follow Paul Sonneveld on LinkedIn and check out MerchantSpring and his Marketplace Masters podcast. If you need help launching and scaling across Amazon and beyond, that's what we do at INNELS.
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