What is an amazon aggregator? Amazon Aggregators enters the E-commerce ecosystem with a different approach to acquiring Amazon businesses and scaling them to extract revenues. Different investors were attracted to aggregators’ business models, and they received massive funding in the form of debt and equity.
Undoubtedly, the E-commerce industry has surprisingly grown with massive acceleration after COVID-19. Previously brick and mortar stores were the attraction point of shoppers for purchasing goods and services. The restrictions on lockdown imposed during the pandemic shifted consumer behavior towards online shopping.
Amazon was the winner among E-commerce platforms regarding profits and revenues. Multiple business models are developed in the market that assists sellers and buyers in providing different services related to Amazon.
If you don’t know, What is an amazon aggregator? We will explain it to you by covering multiple aspects.
What is an amazon aggregator?
You must be thinking of what is an amazon aggregator. Amazon seller aggregators acquire potential businesses on Amazon and scale them to generate high revenues. Their main motive is to build larger brands to earn maximum profits for their companies and investors.
Aggregator Amazon trades online businesses and owns multiple products in different niches. They can raise multiple brands and increase their profit margins to a large extent.
If you are an FBA seller, you can’t grow your business exceptionally fast as FBA aggregators can in a short time frame. The reason is the excessive financial resources they utilize to enhance brand value and expand in different marketplaces to extract maximum sales.
If you are an Amazon seller and thinking of selling your business, consider selling to these aggregators. However, your brand should have enough potential to get acquired by aggregators.
What Does an Amazon Aggregator Look for Brand Acquisition?
All aggregators on Amazon come with their requirements for acquiring Amazon businesses. Below listed are a few standard requirements that your business should meet before acquisition:
- Brands Registration: Amazon aggregators are looking for registered brands that are private labels or branded products. This is because private label brands are more profitable than other types of Amazon business. So, if you have a private label brand, aggregators can acquire it.
- Fulfillment by Amazon (FBA): Amazon has the most lucrative service of FBA that is very helpful for growing your Amazon FBA business. Aggregators want to acquire FBA businesses to get rid of the logistics management and option of attaining Prime status. Nearly 73 percent of Amazon sellers use FBA to sell.
- Profit Margins: Every business buyer will be interested in the profit margins of your business. Different Aggregators demand 200k US dollars in annual net profits while few require 500k US dollars annually. Profit margin requirements also differ; some agree with the 15 percent, and few may accept 10 percent profit margins but now less than that.
- Minimum SKUs: Aggregators prefer high revenues with fewer SKUs. It is easy for them to manage businesses with lower SKUs.
- Percentage of Sales Through Amazon: The percentage of sales conducted through Amazon is also emphasized by aggregators. Some of them will demand 80 percent of the sales through Amazon, while others may demand 30 percent. You have to discuss this point with aggregators. If your business is performing well on other E-commerce platforms compared to Amazon, that can be the point of discussion with Amazon aggregators regarding the acquisition.
- Loyal Customer Base: Customers are the backbone of your business. If your business offers quality products and customers love to buy from you, FBA acquirers are attracted to buy your business. They prefer a loyal customer base of a brand for acquisition.
- Niche: Each acquirer has unique advantages in scaling a specific niche market. Find the aggregator having extensive experience in scaling your business.
- Avoiding Black Hat Tactics: If you are following tactics against Amazon policies and can cause the cancellation of accounts, aggregators will never buy your business.
- Evergreen Products: Your business should include evergreen products having promising future growth. Aggregators neglect those products having no long-term potential.
Why Selling Your Business to Amazon Aggregators?
The demand for online shopping has tremendously increased. Amazon Aggregators companies have excessive financial resources to inject into scaling acquired brands that business owners can’t do independently. These businesses enjoy high-profit margins and revenues under the umbrella of aggregators.
Aggregators on Amazon are well aware of the strategies of running online businesses and scaling them to increase their brand value. Moreover, they have superior experience in managing the supply chain management of your business. After the pandemic, supply chain management challenges created tension for online businesses.
As an Amazon FBA seller, it is difficult for you to handle supply chain issues. In 2022, these challenges are expected to remain. Therefore, it is a great time to sell your Amazon FBA business to aggregators who know how to handle your Amazon business in difficult challenges.
Furthermore, these aggregators have the latest technological tools that are helpful to growing businesses and elaborating valuable information to make an informed decision.
This will also tell you what is an amazon aggregator strategy to scale your business.
FBA Aggregators in 2022
Amazon aggregators have faced many challenges in the past few years in growing acquired businesses. Therefore, few aggregators have decided to pause the acquisition process in 2022.
The cost of scaling businesses is increasing due to multiple factors. An increase in shipment costs, Amazon advertising cost increase, and a rise in FBA fees are the few significant challenges faced by aggregator companies in scaling brands.
They are trying to improvise their strategies to generate valuable acquisitions. Aggregators have to get out of these challenges to generate revenues for their investors and sustain business growth.
Conclusion
Now you know what is an amazon aggregator. If you are running a successful FBA business and want to exit, then selling your business to aggregators can be the best choice.
2022 can raise multiple adverse challenges for Amazon businesses to gain market share and beat the competition. Therefore, it’s the best time to sell your Amazon FBA business.
FAQs
How many Amazon aggregators are there?
There are around 100 active Amazon aggregators in the market.
What is an FBA aggregator?
FBA aggregator companies buy your Amazon FBA business and scale them to earn profits.
What are brand aggregators?
Brand aggregators acquire your brand and grow them to new heights to extract the maximum potential from that business.
