The Amazon ecosystem can appear easy on the surface. Sellers and sellers sell goods on the global e-commerce platform for shoppers from around the globe. However, there’s much more to it than just sellers, vendors, and customers. Amazon aggregator companies are one of the many elements of the puzzle. They aren’t just an important participant in the Amazon cosmos, but in the world of e-commerce generally.
What is an Amazon Aggregator?
Amazon Aggregator acquire and develop E-commerce brands through creative partnership with entrepreneurs to expand their bought Amazon brands and generate revenues for their shareholders. Aggregators search for Amazon sellers they think to have a high sales potential to combine and manage the portfolio of businesses that are e-commerce.
In many instances, FBA business owners earn several years of revenue if they sell their company to an aggregator. If you think it’s time to transition to the next business venture trading an FBA firm to an Amazon aggregator is a fantastic method to get the capital needed to start your new venture.
What are Amazon Aggregators looking for?
Each aggregator firm is different. Here is an overall standard that your business must meet:
Registered Brands: Amazon Aggregators seek out brands that you sell, mostly private labeled or branded products, or if you are the manufacturer. Suppose you need a trademark and purchase one with us and a complete brand registry within seven days.
Fulfilled by Amazon: Mostly Amazon Aggregators are buying Fulfillment through Amazon merchants primarily since they don’t want to manage logistics and because of the ease of obtaining Prime status. Sixty-six percent (66%) of Amazon’s top 10,000 Amazon sellers utilize FBA as per Marketplace Pulse.
Margins and Profits: Each buyer is unique; however, most need a minimum of $200k in annual net profits*, while some need 500k in annual net profits*. The majority of them require minimum net margins of 15; however, some may be able to get away with net margins of 10% but not less.
SKUs: More revenue fewer SKUs For example, 1 million dollars in revenue with just 2 or 3 SKUs is better than $1M sales made with 50 SKUs.
Sales through Amazon: Each acquirer differs, with some asking for an 80% minimum of sales via Amazon; however, some will be fine with about 30.
Loyal customers It’s an indication of success if you have a steady customer base.
Niche: Each purchaser has a specific niche that is based on their knowledge.
No Black Hat Tactics: You must never engage in any kind of activity that could cause a cancellation of your accounts.
Not a Fad: Acquisitions seeking companies with a strong potential for the future shouldn’t think it’s going to fade away in time.
Who can sell their Amazon business?
Because of its advantages in the market, certain types of Amazon companies are more attractive to amazon aggregators than other types. The three most popular kinds of FBA businesses are private label, wholesale and exclusive products.
Private label is the process of a retail store rebranding or renaming an item that is manufactured under their own label or brand. Wholesale is the act of purchasing discounted or low-cost products in bulk to market them as units on a marketplace for retail. Most wholesale items already have listings on Amazon. The exclusive ownership of these products is held by the person or company offering them via Amazon. They are usually protected by patents, trademarks, or copyright.
Private labels tend to be more likely to be bought than wholesalers, even if their products could be bought from other sellers since amazon aggregators are looking for Amazon fba businesses with a strong reputation and a track record of sales. Aggregators are also attracted by exclusive products with high sales and positive reviews since they know their customers cannot find them anywhere else.
If you have a private label company or have a unique product that has been a hit on Amazon and you’re trying to sell an option, then brand acquisition could be the right choice for you.
Based on Greg Elfrink from Empire Flippers, “Once you get into the $800,000 to $1 million+ valuation range, that’s when you get to benefit the most from the activity of all the aggregators and ultra-high net worth individuals acquiring FBA businesses.”
In this regard, the best moment to market your Amazon business is when you’re making a profit. When you’re experiencing an upward trend in sales, you’ll have more bargaining potential when you are negotiating the acquisition. Being able to demonstrate healthy sales can allow for conversations with more amazon aggregators so that you will be able to find the best fit for your needs.
Why should you sell your Amazon FBA Business?
Selling on Amazon can be more challenging and time-consuming for many sellers than they are anticipating. Over half of Amazon sellers operate it as a side-job, and 1/3 of them are full-time employees. Their limited resources hinder sellers from growing their operations, bringing on more employees, or improving their marketing strategies/funds. Not just for small sellers, Researchers have found that even for profitable Good Amazon Sellers, it is difficult to manage their inventory, as well as supply chain.
On the other hand, the aggregators have a wealth of funds as well as a team of professionals.
List of Amazon Aggregators: Buyers of Amazon FBA E-Commerce Businesses:
1. Perch
Perch is generally agnostic to categories. They look for top-quality products and brands with an unbroken history of positive reviews from customers and consistently among the top three brands within their market. Their product portfolio is comprised of items in kitchens and homes and beauty, clothing and health and wellness, toys, and much more. They are looking for brands that have at least $1 million in revenue or around $200k in sales discretionary income (SDE).
2. Boosted Commerce
Boosted Commerce considers itself a category independent of the realm of electronics and clothing. They seek to buy brands that have an annual minimum SDE of $500K. They also have a current sweet spot ranging from $10 million.
3. Elevate Brands
Elevate Brands targets high-quality, secure Amazon private label brands that have category-leading reviews and moats. The categories they target are Arts & Crafts, Baby Products, Beauty & Personal Care, Grocery, Health & Household, Home & Kitchen, Office, Patio, Lawn, & Garden, Pet Supplies, and Home Improvement.
Their ideal target for acquisition is at least $1 million of annual revenue while achieving net EBITDA margins of more than 20%.
4. SellerX
SellerX is looking for Amazon-native brands that have a proven performance record and the potential for growth via optimization or expansion strategies ( new regions and channels, or the launch of new items). They’re looking for brands that have authentic and competitive reviews for their products (<4.3 ratings). They also tend to be focused on products that have an ongoing demand for long-term sustainability and stay clear of products that are perceived to be “fads” or temporary in the sense of.
They generally buy companies that have crossed an amount of more than 1 million dollars in revenue and are growing fast (30 percent year-over-year) with high margins (20 percent Contribution margins).
5. Heroes Technology
Heroes focuses on Amazon FBA companies across a wide range of categories, which range from Baby & Pet to Home & Garden to Fitness & Health. The perfect company Heroes chooses to buy usually is one with a large number of positive reviews from customers and an established history of bestseller lists in highly-growth niches. They would like to see the sameness of their brand, with evidence of repeat purchases and cross-selling, as well as upselling. They are looking for brands that earn between $500K and $20M in annual revenues.
6. Heyday
HeyDay acquires and develops brands that are both on and off Amazon. Although Amazon is a key channel for them, their brands are typically extended to multi-channel companies. They are fairly neutral to product categories. They concentrate on brands with distinct products that are appealing to consumers and offer a distinct value offer.
They generally invest in brands that have attained an amount of scale and laid the foundation to allow for large investment. They are primarily focused on brands that have at least $5 million in revenues.
7. Factory 14
Factory 14’s ideal clientele is for businesses with an excellent brand name and/or distinct and distinctive product line and annual revenues between $1M and $25M. They also take into consideration smaller businesses when they have a strong brand equity and high growth potential. They are especially involved in niches like Sports & Fitness, Outdoors, Home & kitchens, Baby, Home Improvement/DIY, and pets.
8. Moonshot
Moonshot has a diverse portfolio of brands, which include The Cocktail Box Co, Magneto Boards, and Bustin Boards. These brands all have an omnichannel presence that is strong across Amazon, DTC, and in retail stores like Target, Costco, and REI.
Moonshot Brands is primarily looking at brands that fall into areas like Home Goods, Pet Goods, Fitness, and Outdoors games, beauty, and. They look for brands with solid financials, generating between $2M to $30M in revenue, with the possibility of becoming the top of the line in their category.
9. Olsam
Olsam is looking for top category brands across all platforms. The majority of their income comes from Amazon. Additionally, they concentrate on markets that have long-lasting growth potential and steer clear of products that appear to be short-lived trends.
Oslam has seen success with categories like Homeware, Kitchen Products, sports & Fitness, Baby, and Lifestyle. They have a tendency to stay clear of categories like Supplements, complex electronics, perishables, and some apparel categories. They believe they are rather neutral in terms of category, but they insist on having strong review count ratings and organic rankings in search engines. They typically focus on companies that have revenues in the range of $1M to $10M. Still, They will take into consideration larger and smaller businesses when the growth story is in line with.
10. Acquco
Acquco generally seeks out bigger companies with the intention of achieving double-digit to triple-digit year-over-year growth. They generally do not have a preference for a particular product, but they do try to stay clear of fad items (i.e., fidget spinners) or products that have a high seasonality (i.e., Christmas trees) as well as products that carry the risk of obsolescence (i.e., phone cases).
Acquco typically acquires brands with annual sales of more than $3 million, EBITDA margins above 20 percent, and positive growth rates for YoY.
If you’re interested in becoming a seller, then you should visit Acquco’s website for more details.
11. Suma Brands
Suma Brands looks for products with good reviews and a history of growth in margins and revenue. They’ll consider any product category or size of business (with a minimum of $500K annual revenues). However, they will prefer businesses that have more than $1 million in SDE annually.
What’s Suma Brands’ acquisition process appear to be?
Suma Brands has a simple three-step procedure to help you market your Amazon brand with a time limit of fewer than six weeks.
- Introduction and exchange of data
- Submission of offers and due diligence
- Payment execution and payday
If you’re an interested seller, submit a request form available on the website.
12. D1 Brands
D1 usually targets brand leaders in the category that have durable, high-quality catalogs of their products, as well as size-able moats for reviews. Their ideal target for acquisition would be a privately-owned business that generates a minimum of $1.5M in annual revenues with a focus on Amazon. They are not a category-specific company with a few exceptions.
13. Forum Brands
Forum Brands looks for companies that are located in huge market segments that have trajectory indicators that indicate they will endure for a long time in 20 years’ time. They are looking for brands that their knowledge and resources will increase and sustain growth for the long haul. The categories they like are Pet Products, Baby Products, Health & Personal Care, Home & Kitchen, Lawn & Garden, and Sports & Outdoors.
They examine the financials of potential acquisitions holistically. They generally look for companies that generate more than $1 million annually in revenue. They will look at smaller companies with high growth in revenue, solid margin profiles, low seasonality, and a net income that is at or above $250k.
14. Intrinsic
Intrinsic is exclusively focused specifically on Health & Wellness brands. They focus on brands that address a particular health concern and are able to generate between $500K and $10M in annual revenue, and the majority of their revenue comes via the Amazon marketplace.
They are seeking brands that have at least 10 SDE margins of 5% or more. They generally require at least $500k TTM revenue before considering buying a company, but they are willing to talk to companies of all sizes. Their approach to smaller brands is not based on the current size of the brand and more on the ways they can utilize their knowledge to expand the company’s revenue to $1 million+ EBITDA within under 12 months.
15. Foundry Brands
Foundry Brands is focused on lasting brands and ultimately seeking businesses with solid foundations, allowing them to expand their capabilities and resources to increase growth. Their capital structure permits the company to look at brands of any size. They usually try to remain open to having the floor and focusing on the overall brand and the possibilities ahead to estimate the value.
Conclusion
Based on where you’re where you are in where you are in your Amazon process, you might or may not be in a position to sell your e-commerce business you’ve built an aggregator. Inquiring with any of the companies mentioned in the above Amazon aggregator list is a great opportunity to investigate your possibilities.
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