The latest slogan in the world of third-party sellers is “Amazon Aggregator.” Gather your attention towards this article, and we will communicate to you all the necessary points you need to know about Amazon Seller Aggregators.
The competition on Amazon has gone aggressive by the entry of Amazon brand Aggregators. Amazon aggregators are funded heavily by their investors to scale acquired businesses and extract revenues. Many sellers on Amazon don’t stand against Aggregators due to their limited financial capability to fight back.
What Are Amazon Seller Aggregators?
Amazon Aggregators is a business acquiring different Amazon brands for the sole purpose of scaling those acquired brands and generating profits for their investors.
There are around 200 investors of Amazon Aggregators, including investment banks, private equity and venture firms, and individuals with high net worth.
Bloomberg article reports that “Amazon Aggregators bet on transforming their acquired brands to global brands through constructive strategies and heavy funding. It’s a sellers’ market. So, if you are running an Amazon business and want to sell it, the time has arrived.
It’s not easy to finalize a deal with Amazon aggregators as their expectations from your Amazon business are high for acquisition. The next question arises: What Amazon Aggregators are looking for opting for an Amazon business?
What do Amazon Aggregators Look at During Brand Acquisition?
A few things are valued by Amazon Aggregators when looking for an attractive deal for Amazon business. If you want to get the desired price for your Amazon business, you should know what they value most.
Registered Brands
Amazon Aggregators always prefer registered brands. They are looking for sellers with private-label merchandise or developing their products.
Thereby, your Amazon business needs to ensure that you are a registered brand for attracting aggregators.
Revenues
Here, the financial health of your business matters. Every Amazon seller Aggregators have their profit requirements, while most expect more than 200K US dollars annual profits. On top, they will be looking at your profit margins.
What do suitable profit margin aggregators want? The answer is a minimum of 15 percent. Some can be convinced on 10 percent but not less than that.
Number of Stock Keeping Units (SKUs)
Amazon Aggregators prefer businesses having higher profit streams with fewer SKUs. For instance, they will go for a business with 2 million US dollars revenue with just two or three SKUs instead of 2 million in sales generated through 50 SKUs.
Sales percentage through Amazon
Amazon Sellers commonly list their products on different Ecommerce platforms like Shopify, eBay, and Walmart. That is not bad either, as every seller attempts to diversify their business to increase sales and revenues. But, Amazon Aggregators go for the percentage of sales generated specifically through Amazon.
What percentage do they require for Amazon-generated orders fulfillment? That depends on Amazon aggregators. Few need 80 percent of sales placed through Amazon, while others are satisfied with a minimum of 35 percent.
Consistent Demand for products
Every seller on Amazon wishes to get consistent demand for their products by customers. Amazon Aggregators wants the same from your business.
Aggregators will not go for those products that can be considered fads or seasonal products. Businesses having long-term viability (whose products can be demanded for years) are favored by Amazon seller Aggregators.
Customer loyalty
Customer loyalty is a crucial part of any business. 65 percent of the company’s business comes from loyal customers.
If your Amazon business enjoys a good reputation with a loyal customer base, then Amazon Aggregators will see your business as a golden opportunity.
Niche
Most of the Aggregators are looking for specific niche products that match their proficiency. They will look for the most favorable business to scale up within their sector.
Fulfillment by Amazon
FBA businesses attract Amazon Aggregators for a few significant reasons:
- Firstly, they don’t want to deal with supply chain management problems.
- Secondly, they want Prime status, which is easier to attain in FBA.
Following terms and conditions
Amazon has the prime right to deactivate those accounts not following rules and regulations. Aggregators will go for that business that abides by rules.
International marketplaces
The biggest sellers on Amazon are operating within the USA market. Few have also expanded their business boundaries to other states like the UK and other European countries.
Amazon Aggregators are happy to acquire those businesses that sell in multiple marketplaces. If you are an international Amazon seller with having a good business portfolio, then Aggregators can acquire your brand.
Should You Sell Your Amazon Business Or Not?
Well, it depends upon you. If you are not sure, ask yourself the following questions:
Are you willing to sell your Amazon business?
We know that you have injected all your efforts to make your business successful. You will be having an emotional attachment with your business.
If your business provides you with a sense of purpose, avoid selling it. However, if you want to do something new, selling your Amazon business is a better option.
Do you meet Amazon seller aggregator requirements?
If the answer is yes, then you can sell it comfortably.
If not, start developing your business by making necessary changes to achieve more sales.
What Can You Ask from Aggregators Looking To Buy Your Business?
If your Amazon business meets every requirement demanded by Amazon Aggregators, you can process a deal with them. But before asking some questions that are useful for your business dealing.
We know you have put a lot of effort into scaling your brand and building your entire business.
So, please leave it to the hands of experienced people that can take care of your business. These are the questions you may ask:
- Communicate with me with your experience of dealing with these types of businesses.
- What problems can a business like mine face during its operational journey?
- I want to meet with your team that will handle my business.
- Tell me your experience in dealing with FBA businesses?
- Can you show me the plan you have developed for scaling my business?
- How many funds will be required to enhance my brand position? What is the financial plan that you have made?
These questions will make you acknowledge Amazon Aggregators plan and experience to enhance your brand performance. Moreover, it will be better for your satisfaction that either your brand is going in the right hands or not.
Conclusion
Amazon seller Aggregators have dominated their presence in the world of Amazon by generating gigantic revenues for their investors. Their presence has escalated the competition in the Amazon world, and small sellers can’t compete with them.
If your business can grow for the long term, then Amazon Aggregators are there to acquire your business. However, you have to meet certain requirements as demanded by these Aggregators. After completing this process, your Amazon FBA business is ready to grow at the hands of Amazon Aggregators.
