America is Quietly Losing its Midsized Brands

When people talk about the future of American consumer brands, the conversation usually swings between two poles.

On one end are the giants: the multinational companies with scale, shelf dominance, and balance sheets built to absorb almost any shock. On the other are the insurgents: the digital-native startups with fresh branding, niche audiences, and venture-backed growth stories. What gets overlooked is the middle.

The most underappreciated part of the consumer economy is the midsized brand: the established, often profitable company that has real demand, loyal customers, and meaningful distribution, but not unlimited capital or an army of internal operators. These are the brands that make grocery aisles more interesting, give households alternatives to category incumbents, and often carry the product quality and founder conviction that bigger companies lose over time, and America is quietly losing them.

Not always through bankruptcy. Not always through acquisition. Sometimes they disappear more subtly. They stop innovating. They retreat from channels they cannot manage. They get trapped in margin compression. They lose visibility into what's actually driving performance. Or they become so operationally burdened that growth itself starts to break the business.

From the outside, many of these brands still look healthy. The packaging is sharp. The products still move. Revenue may even be growing. But underneath, the operating model is increasingly fragile. The problem is not a lack of consumer demand; it is complexity.

For a midsized brand today, selling online no longer means “having an Amazon strategy.” It means managing a sprawling and constantly shifting ecosystem of marketplaces, retail media, content requirements, pricing pressures, logistics issues, resellers, social commerce channels, and direct-to-consumer expectations. What used to be a channel has become an operating environment.

And for many brands, that environment is held together by a patchwork of agencies, consultants, software tools, distributors, freelancers, and internal team members who each own one slice of the puzzle but not the outcome. That fragmentation is becoming existential.

Our view of the market at Neato is that brands are increasingly overwhelmed by vendor sprawl and channel complexity, while marketplace performance now depends on much more than what happens inside Amazon alone. This is where the second-party (2P) model comes in. Buying inventory directly from brands and running the marketplace operation end-to-end, across pricing, advertising, creative, logistics, and brand protection, so the brand gets one accountable operator instead of a stack of disconnected vendors.

That model has made one thing very clear to me: a huge number of midsized brands are not failing because consumers don't want them. They're struggling because the cost of operating modern commerce has become too high, too fragmented, and too unforgiving for the middle of the market.

Large enterprises can brute-force complexity with headcount, systems, and working capital. Small early-stage brands can stay nimble because they're still narrow in scope. But midsized brands sit in the hardest position. They're large enough to face real operational demands and channel expectations, but often too lean to build a full in-house e-commerce department across every discipline.

When a midsized brand cannot manage complexity, consumers lose choice. Retailers lose differentiated partners. Innovation slows. Categories become more concentrated around whoever can afford the most operational redundancy, not necessarily whoever makes the best product or understands the customer best. That is not a healthy market; it is a quiet consolidation of advantage.

And it's happening at the exact moment when more channels are demanding more sophistication. Today, strong marketplace performance depends on creative quality, traffic strategy, retail media, inventory discipline, pricing control, and reporting clarity, all working together. Our view is that the industry increasingly needs someone to own the outcome, not just individual slices like ads, logistics, or creative. That should worry anyone who cares about the future of independent brands, because average execution across disconnected partners is no longer enough to sustain a serious business.

This is why I believe the next era of commerce infrastructure will not be defined by who offers the most tools. It will be defined by who removes the most operational drag.

We work with midsized and larger brands, and we know from experience that they don't need more dashboards. They don't need another specialist vendor adding another handoff. They need models that reduce complexity, stabilize operations, and restore clarity around profitability. In other words, if we want America to keep producing strong, independent midsized brands, we have to stop treating commerce operations as a back-office detail and start seeing it as a structural issue. Because once the middle of the market gets hollowed out, it doesn't come back easily.

You can always launch a new brand. You can always buy an old one. What's much harder to rebuild is the operating confidence, institutional knowledge, and market position of a company that spent years earning customer trust and category relevance, only to get crushed by the mechanics of modern distribution.

That would be a real loss, not just for founders and operators, but for the broader consumer economy. America doesn't just need more brands, it needs more durable ones.

And if we want durable brands, we need operating models built for the reality of modern commerce, not the fantasy that a midsized team can hold together a fragmented, multichannel business indefinitely with spreadsheets, agencies, and crossed fingers.

The future of American consumer brands will not be decided only by who has the best product or the best story. It will be decided by who can survive the complexity.

Anthony Connelly is the founder and CEO of Neato, a 2P ecommerce operator built to remove complexity and bring certainty to marketplace growth by buying inventory directly from brands and managing online sales execution end-to-end.