How can sellers deal with Amazon Aggregators?
Amazon aggregators have become a fundamental part of Amazon's company due to their profitable strategy for FBA sellers. Aggregators try to uplift your business by investing and accelerating growth.
All Amazon aggregators are looking for successful eCommerce brands and products having a significant market share and enjoying healthy profits. Amazon aggregators invest their capital in these businesses to gain revenue.
This article will look at how sellers can deal with Amazon aggregators or sell Amazon business to aggregators.
Understanding of Amazon aggregator
The motive of Amazon aggregators is to boost the performance of brands that they want to acquire for gaining revenue. Amazon aggregators look for entrepreneurs running successful brands and processing partnerships to enhance performance. Aggregators can find sellers on Amazon with great sales potential and deal with them accordingly.
Fig 1: (Source Crunchbase news) Ecommerce Aggregator funding in 2021
It can be witnessed in fig 1 that Ecommerce aggregators have raised huge funds and revenues for their investors by acquiring different businesses. A total of 2.3 billion US dollars were raised in capital funding by Amazon aggregators.
As an Amazon seller, you can sell Amazon business to Amazon aggregators, a safe and healthy investment to secure your business.
What kind of businesses are Amazon aggregators looking for?
Amazon aggregators follow the rule of thumb; they look for that Amazon business whose valuation reaches 1 million US dollars. If you have the business on Amazon worth that value, it's up to you to decide which aggregator to choose.
There are many Amazon aggregators, out of which most will require the following criteria from your business.
Amazon aggregators are looking for renowned brands selling their products to capture significant market share. They are more interested in looking for registered brands that are authentic and well-off.
Amazon aggregators focus on purchasing FBA businesses. Fulfillment by Amazon is a service that accelerates business by providing them access to the Amazon logistics network. Therefore, Amazon aggregators prefer to purchase FBA business, so they don't deal with logistics. The research conducted by practical Ecommerce concluded that nearly 67 percent of top Amazon sellers are using FBA.
Most buyers will purchase your business if it gains handsome profits and ensures top-notch quality. Similar goes with Amazon aggregators; they will acquire that business earning a minimum of 200,000 US dollars to 500,000 US dollars than they might purchase your business. However, it's the lowest amount that they require; they prefer above 1 million US dollars' earnings with 20 to 25 percent net margins.
Amazon aggregators are also willing to buy stock-keeping units (SKU), enjoying healthy profits. If you have a good and financially healthy SKU, Amazon aggregators can buy it from you.
Sales completion through Amazon
This factor will depend upon Amazon aggregators. Some of them will demand that your business sales on Amazon should be minimum of 80 percent, while other aggregators can demand lower than that ratio. More importantly, your deals should be good through Amazon to attract the attention of Amazon aggregators.
Customers' loyalty is essential for the stability and growth of any business. If your customers are loyal to the brand, than the threat of substitution is very low. It means that customers will not easily switch from your services.
If your business customers are loyal, it will leave Amazon aggregators a great impression to buy your business. Amazon aggregators greatly emphasize customer loyalty to your business on Amazon.
Seller will find different Amazon aggregators specializing in their specific niche in the market. Being a seller and running a successful Amazon business, you should see those Amazon aggregators specializing in your business niche. You can take advantage of their expertise to run your business effectively by doing this.
The strength of the business is what attracts the investors to deposit their money on that business and become stakeholders. It is fundamentally vital that your business is enjoying escalating growth rates with long-term profitability.
Amazon aggregators are looking for businesses enjoying healthy growth rates and profitability for the long term. They don't invest in those businesses, which shows the threat to be faded soon.
It is being a Seller What questions You Can Ask from Amazon Aggregators that are Buying your Business?
Suppose your business is enjoying escalating financial growth that it's an excellent opportunity for you being a seller, to merge with Amazon aggregators. But wait, you should ask some specific questions before dealing with Amazon aggregators about your business.
As you have put significant effort to stand your business to where it is now, handing over your business to someone else without an audit is not a worthy decision. So it's essential to hand over your business in the hands of a responsible organization.
During an interview with the Amazon aggregator, you can ask some specific questions to ensure your comfort in dealing with Amazon aggregators. These questions are:
- What is your experience in dealing with the businesses I am operating in?
- What issues can a company I am running face in their operational journey?
- I want to discuss this with the team handling my business.
- Kindly tell me about your experience in buying FBA business.
- Can you provide me with the sketch plan you have prepared to run my business?
- How many funds will you inject into my business, and what objectives will be filled?
Sellers can ask many questions by Amazon aggregators before making a deal. The questions mentioned above are fundamental to learn.
Being a seller, after knowing the answers to your desired questions by Amazon aggregators, it is on you to process or either reject the deal. Amazon aggregators are a vital part of Amazon to lift the sales of different businesses and unleash their true potential.
Suppose you deal with Amazon aggregators, then they will try to elevate your brand with more success through their innovative marketing strategies. Amazon aggregators have generated billions of dollars for the businesses under their control for the past few years.
If you are a seller and you have merged with Amazon aggregators specialized in your specific niche, then your success journey of Amazon business has begun. Make sure that you are engaged in your business equally as the Amazon aggregators to ensure efficiency.
It is no doubt that Amazon aggregators have the potential to lift your business towards healthy financial growth. Being a seller you need to analyze what Amazon aggregators demand from your business. As they provide funds to elevate your business on Amazon, their selection criteria are not very easy.
If your Amazon business stands on their requirement than you should ask important questions to Amazon aggregators regarding your business. Make sure that their business experience is related to your specific niche and they have relevant market experience. After when you got in depth explanation of your answers from Amazon aggregators, you can process a deal with them for the future.
Remember, Amazon aggregators demand those businesses that are enjoying long term growth rather thanthan short term. So your business should be effective enough to enjoy long term growth before dealing with Amazon aggregators.