Packable, the parent company of a leading third-party seller on Amazon, is shutting down.

Leanna Bautista, Packable’s chief people officer, wrote to employees Monday that she had “heartbreaking news: Packable will be conducting an orderly wind-down of its business.” 

The company will lay off about 500 employees and shutter two warehouses, according to filings with the New York Department of Labor, where the company is based.

“Over the last several months we have been working around the clock to provide a runway to fund our business. Unfortunately, we were unable to secure the cash the business needs to operate,” a spokesperson said Wednesday. “We are left with no choice but to proceed with an orderly wind-down of our operations, followed by a liquidation of our assets.”

Packable, which has offices in New York City and Long Island and some remote workers in Seattle, says it works with brands to develop an e-commerce strategy for things like purchasing inventory and managing product pages. It’s the parent company of Pharmapacks, which sells and ships health, beauty and home products, like mouthwash, nail polish and dish soap. 

Pharmapacks started as a brick-and-mortar store in 2010 before going digital; it sells directly to consumers on pharmapacks.com and through other platforms, including Amazon, eBay and Walmart.

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It ships 1.8 million orders per month, according to its website, and was listed as the fifth top seller on Amazon as of Wednesday, according to research firm Marketplace Pulse. Packable says it has more reviews on Amazon than any other third-party seller in North America and reported it had a 97% “lifetime positive rating” on the platform.

In January, Packable estimated it had daily net revenue of about $1.6 million, up from $1.5 million during the fourth quarter of 2021. It announced plans to build a 333,000-square-foot fulfillment center in Riverside County, California to more easily ship orders to customers on the West Coast. It said it would hire 270 employees at the facility in the first five years.

Packable expected to go public through a merger with Highland Transcend, a special purpose acquisition company, in March. The deal would have valued the combined company at $1.55 billion, and Packable would have been listed on the New York Stock Exchange under the ticker symbol PKBL, according to filings with the Securities and Exchange Commission.

“This is an exciting time of growth for Packable,” then-CEO Andrew Vagenas, wrote in a statement in January.

By the spring, Vagenas was out as CEO, plans for the California fulfillment center were shuttered, the merger was off and workers weren’t expecting any bonuses.

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In March, Highland Transcend and Packable said the companies had agreed to end the merger due to “current unfavorable market conditions.” In its proxy statement when the deal was first announced, Packable reported a net loss of $114 million in 2020, up 190% from 2019.

“From the beginning of the company up until the last few months, we were in the growth revenue mindset, which is important for a company but the problem was we were bringing in a lot of revenue but we weren’t actually making any money,” according to a former employee in Seattle who asked to remain anonymous while on the hunt for a new job. “That finally caught up to us.”

Coming back from lunch break Monday, the worker saw an email around 12:15 for a 1 p.m. meeting, labeled “mandatory CEO update.” On the call, workers learned it was “basically game over.”

In a filing with the SEC announcing its intent to go public, Packable noted several risk factors that could harm the company including the impact of future pandemic-induced lockdowns, competition from other e-commerce sites and the inability to predict consumer trends and keep popular products in-stock. 

Among the list, it noted Packable would be impacted if companies like Amazon and Walmart increased the fees to utilize each fulfillment network to ship goods across the country. About 97% of its revenue for 2020 was generated from Amazon and Walmart marketplaces, the company said.

Since the filing, Amazon has twice announced it will raise fees: In April, it added a 5% fuel and inflation surcharge. In August, it said it will tack on a holiday fee of 35 cents per item from Oct. 15 to Jan. 14.

Packable said Wednesday Amazon’s policies did not impact its closure.

“We are grateful to our employees and proud of the work we have accomplished together,” a company spokesperson said. “We can’t overstate how disappointed we are in this outcome.”