Updated: Jul 29, 2021
In the past few years, the Amazon Sellers’ Market has come out as a strong force, with sellers gaining more traction each year while defining the modern world of e-commerce.
What was once only a distant, futuristic idea is now a reality. Who would have imagined that buying and selling products across world markets could be done with only a few clicks of a button? If you’ve witnessed the progress of international, online trade over the past 20 years and watched as it’s exploded, you might be ready to jump on the e-commerce bandwagon–if you haven’t already.
Realizing the grand possibilities within online retail, many hopefuls try to break into the world of e-commerce by joining the Amazon Sellers’ circle, even before they know what exactly this entails.
With a multitude of brands and such stiff competition in the Amazon marketplace, you may not be achieving the goals that you originally had set out to. This may not necessarily be because your brand is not recognized, but rather because you need to adopt a new business strategy. On the other hand, some sellers make it big on Amazon, so big in fact, that they can no longer manage their business by themselves.
Whether you’re still finding your way navigating the e-commerce giant or you’ve discovered a winning combination for Amazon success, you might find yourself preparing for the next venture and ready to sell your Amazon business, leading you to seek out interested aggregators.
What Are Amazon Aggregators?
Traditional aggregators acquire brands with potential for growth, injecting them with funds and scaling them to produce high returns for investors. Amazon Aggregators are similar but focus solely on Amazon sellers, investing in these online companies and putting them under an umbrella of multiple brands where they will be nurtured and grow into solid, lucrative businesses led by a team of experts.
One of the perks of connecting with an Amazon Aggregator as a small business is that they already have professionals in place who know the ins and outs of managing an Amazon business. When you take your seller company to an Amazon Aggregator, you are turning your brand over to veteran sellers who can secure a promising future that benefits your interests.
What Do Amazon Aggregators Look For When Buying a Business?
We are sharing some of the top factors that come into play when Amazon Aggregators evaluate a brand and undertake the next step of investing. If you are curious about handing off your business and hoping to pique some Amazon Aggregator interest, you should examine the list below and see if your business might fit the bill.
1. Registered Brands: Is Your Brand Registered?
Brand registration is important for Amazon Aggregators because this defines the reputation of your business, both in the eye of the consumer and the law. Registered Amazon brands are trusted and are worthy of investment, especially because this means they have a trademark that no other Amazon businesses can lay claim to.
2. FBA: Fulfillment by Amazon
Amazon FBA businesses are easily manageable, even after being transferred to another owner because logistics and shipping are already in place with a reliable provider. Amazon Aggregators prefer to have the most seamless transfer possible when assuming a new venture, which makes for a smoother process, both on their part and on that of the seller. They also appreciate a well-established system that is proven and doesn’t need tweaking post-sale, and an FBA business guarantees that the aggregator will never have to deal with third-party logistics. So this gives your seller business an added benefit in the eyes of prospective buyers.
3. Product Range
There is a delicate balance that sellers should aim for as far as product range goes if they want to be an attractive acquisition. You don’t want too many or too few products.
Depending on one single product to carry your brand could pose some risks if something were to happen in the supply chain, production was paused, or, if you depend on international manufacturers and shipping, external causes are out of your control and could throw your trade-off course.
A winning business plan is to cultivate a few, solid products with a strong customer base and stellar reviews, and focus on marketing these products as your must-haves. Businesses with way too many products on offer–but the same amount of revenue as a brand that does a couple of select items extremely well– won’t look as good when it comes time for a valuation. Don’t get carried away and keep a curated, limited product range.
4. Customer Following
In any form of business, the amount of customers–especially loyal, satisfied customers–plays a big role in the growth that the brand is likely going to take. This is not rocket science: the bigger and happier your customer base, the better. To achieve this, besides producing a quality product, you can implement customer outreach and start a dialogue through social media to grow a following, while making sure your customer service is attentive and quick.
5. Clean Marketing Practices
Not only do aggregators want a smooth transfer of ownership and stable logistics in place, but they want to make sure they’re not taking on a brand that may be involved in an activity that goes against Amazon policy or could be the reason for account deactivation. Your account needs to have a spotless record so aggregators know what they’re getting into and don’t risk repercussions.
Using what is known as black hat techniques is bad for business. Black hat can include anything, from paying someone to leave fake reviews to SEO tactics that violate terms of service, even if these tactics boost your rankings. Unethical practices create a bad reputation for your brand, and if your account ends up deactivated, then using these tactics is a pointless practice anyways. Most significantly, you would have a hard time finding an aggregator to buy a brand with a spotty track record.
So the rule is simple: stick to clean and productive marketing strategies.
6. Evergreen Products: What Are You Selling?
Amazon Aggregators are more interested in businesses selling products that target long-term market interests, which means that your product will not easily fade in popularity over time, and therefore sales should stay strong. Don’t go chasing trends that are at the mercy of fickle consumers and current cultural climate. Seasonal items should be considered with care; if you have a top-seller one month out of the year, and that can compensate for a year’s worth of sales, then your brand is probably safe and viable for investors.
Every Amazon Aggregator is different, some specialize in certain niche products, while others may demand a higher annual profit margin or require that a specific percentage of sales go through Amazon. Taking the previous considerations into account, you should have a clear idea of what an aggregator will look at when they examine your brand’s value and understand the direction you need to take your Amazon business if you want an investor to take notice.
Deciding on what Amazon Aggregator to choose when putting your business up for sale is critical to finding the right funding and vision to handle your product, your brand, and represent your business in the long run. If you want to find out whether your company has some of the qualities that make it an attractive venture for Amazon Aggregators and learn how to sell your Amazon business, we can help.