Amazon FBA Aggregators
Investors are acquiring numerous brands by investing heavily in the Amazon space. After obtaining the qualified businesses, the Amazon Aggregator business brings them under one management. The various aggregators are professional in the acquired brands, and they strive to grow them.
After selling their businesses, the investors then enjoy profits from the aggregator's efforts. Before digging deeper into the article, we will look at what an Amazon aggregator is and what they seek in the interested businesses before acquisition.
What is an Amazon Aggregator?
An Amazon aggregator refers to any business that acquires various Amazon brands to consolidate them under one management. For instance, assuming three different Amazon brands are selling tents, sleeping bags, and camping wear, an aggregator may seize the opportunity to sell these products as a single entity and generate more profits.
Thus, if you seek to sell your Amazon business, you can sell it to an FBA aggregator. However, the aggregators are not just interested in any Amazon business, but they are interested in the following features:
Registered Brands
The various Amazon aggregators are interested in the sellers who won private brands and merchandise labels or manufacturers.
Profitability
The aggregators offer different revenue terms though most of the demand is that the business must be generating a revenue of $200K per year. Thus, the aggregators must check on your profit margins before the acquisition, where most prefer a margin of 10% to 15%.
SKUs Number
When it comes to SKUs, most aggregators prefer quality over quantity. It is better to generate a revenue of $3M in four SKUs than a $5M revenue in more than 50 SKUs.
Location
Most of the Amazon sellers concentrate their sales in the US market. Only a few are expanding to other markets in the UK, Canada, Mexico, among others. Most of the aggregators like Accel Club and Islam Group seek to acquire the brands that have succeeded in navigating the challenge of making sales at various marketplaces.
Terms and Conditions Adherence
Amazon can deactivate any account that violates the set terms and conditions. Thus, the various FBA aggregators will only deal with the investors who value and honor these terms and conditions.
Niche
Most of the aggregators are very specific when selecting the brands to acquire. They primarily target particular markets. Thus they specialize in niche products.
Timeless Demand
Amazon aggregators do not involve themselves with fad products. They seek to establish partnerships with the investors whose products seem to have long-term viability.
Percentage of Amazon-placed Sales
Generally, the Amazon sellers list products on various platforms such as Shopify, Walmart, eBay, and Etsy. However, most aggregators are interested in knowing the particular businesses' Amazon orders percentages.
The qualifying percentage depends on the aggregator terms. Some might require you to have a rate of at least 75% Amazon sales, whereas others require a rate of as low as 30%.
Common Amazon Aggregators
Before you consider settling for a specific aggregator, ensure that you meet their qualifications. If so, you might consider selling your business to the following FBA aggregators.
Much information regarding these aggregators is explained below.
Greenhaus
Most FBA aggregators primarily focus on e-commerce instead of traditional retail forms. However, this is not the case with Greenhaus. Its founders usually use a combination of channels such as D2C, Brick & Mortar, and Amazon to distribute products worldwide.
The company might seem small as it seeks to acquire at least four businesses annually. However, this is just a strategy, as Greenhaus strives for quality over quantity. The company categorizes its products into tiers, tier 1 and tier 2.
Tier 1 consists of pet supplies, beauty & personal care, and health & household products. Tiers 2 category consists of baby, sports & outdoor, home & kitchen, patio, lawn & garden products. Greenhaus does not deal in clothing & accessories, electronics, and collectibles.
Getting into a deal with Greenhaus requires your business to be generating an annual revenue of $750K to $10M.
Unybrands
The company is a reputable FBA aggregator to put into consideration. Unybrands is an excellent choice if your brand generates annual revenue of at least $1M. In addition, your business must be dealing in one of the following product categories:
The following features make Unybrands a unique aggregator:
Sorfeo
This upcoming FBA aggregator is currently acquiring brands that generate annual revenue of $200K to $1M. In addition, Sorfeo is strongly biased towards most of the FBA products.
Able leadership has seen Sorfeo scaling greater heights since its launch in 2020. The administration is run by business experts who have succeeded in running e-commerce businesses in the past. However, it would help if you understood that the company does not deal in highly commodity products.
While growing its brands on Amazon, Sorfeo is also interested in taking you to the next level. This way, you will gain sweet fruits for your entrepreneurial hard work.
Thrasio
Thrasio is the largest existing FBA aggregator. In addition, it is the fastest company to reach a valuation of $1B in the US. However, it is large does not imply that it is the ideal one for you.
Thrasio is interested in big-sized businesses that generate a revenue of at least $1M per year. If your business earns lesser than this, then it might not be the best for you. In addition, the acquirer deals in broadly appealing products that are capable of generating high sales.
Selling your business to Thrasio is a lucrative exit. As you make profits, your Thracian will be improving your brand.
Intrinsic
Intrinsic strives for quality and specialization. The acquirer primarily deals in health and wellness; thus, you might be interested in this in your sector.
Intrinsic is seeks to obtain and advance interested consumer health brands so that they serve at full potential. This company has heavily invested in this.
Recently in Series A funding, it raised a cash amount of $113M. The company is now seeking to acquire health and wellness in the Amazon-centric brand. This might be an excellent opportunity for a long-term investment.
Merx
Max is a strong contender seeks European e-commerce domination. The company wants to acquire high-quality brands and products that have a good history of positive customer reviews. The particular brands and products must also be taking a top rank consistently and have potential long-term revenue growth.
Max is seeking to aggregate with brands that have generated a profit of €30,000 to €300,000 for the last year. The good thing about this company is that they do not insist on generating sales via Amazon. In addition, it is not FBA exclusive; an FBM also works fine for Merx.
Typically, it considers businesses that have an annual revenue band of £1M to £10M. However, if it will occasionally review the terms if interested in your brand.
Oslam Group
The Oslam Group is based in the United Kingdom, and it is seeking to build a conglomerate of European consumer goods. This company strives to become the leading brand marketer in the global marketplaces.
Indeed, it has all the means of doing this. With a predominantly workforce made of former Amazon sellers and employees, Oslam Group has more professional expertise than similar firms. These experts have over twenty years of experience in the Amazon marketplace, a competitive advantage against the competitors.
Like most aggregators, the company finds no interest in fads. Instead, it prefers the products that can grow for the long term in different product categories. These categories include:
Oslam Group does not deal in the following categories of products:
Forum Brands
Most of the big acquirers focus on acquiring many brands faster, unlike Forum Brands, who prefer quality over quantity. It is regarded as a trusted FBA buyer.
The company's creative and flexible deal structures place Forum Brands a step ahead of the competitors. Instead of presenting you with a fixed level, it can constantly tailor the custom agreement to suit your needs, whether performance- or cash-based.
However, the company is highly selective on the brand. It hunts out for an e-commerce business that can span various e-commerce channels such as Walmart, Amazon, Shopify, and eBay. In addition, these brands should be earning $1M to $10M per year.
Forum Brands deals in pet care, consumer durables, home & kitchen, and shelf-stable products. It does not deal in the following product categories: true consumables, electronics, and supplements.
50% of the company's leadership team consists of traditional private equity financiers, with the other half comprises former Amazon employees. Thus, you are guaranteed to trust your business in the good hands of Forum Brands.
Suma Brands
You might be hesitant when aggregating your business for the first time. Generally, you should anticipate long and drawn-out processes. However, this is not the case with Suma Brands. The company uses a simple process of four steps to assist you in aggregating your business much efficiently.
The process starts with a simple introduction from a Suma Brands representative who takes some time to know you, your brands and answer all of your questions, if any.
After a successful introduction, the representative presents you with an evaluation and offer. If you accept it, you undergo due diligence and sign the necessary legal paperwork.
The last part of the aggregation process involves you getting paid. At this point, you are allowed to join the community of the founders of Suma Brands. The whole process takes approximately six weeks. Also, it would help if you understood the company seeks to acquire a business that generates over $500K of annual revenue.
Accel Club
If you have not been involved in aggregating a business before, the Accel Club is great to start with, especially if your business is less than a year old. Up to now, the company has acquired at least five brands.
The main business features that attract Accel Club are margins, size, and growth potential. In addition, the company insists that the sellers must have owned label evergreen and practical products. Regarding the business size, Accel Club is hunting for businesses that generate annual revenue of $600K to $25M, with high growth potential.
The company is primarily interested in the following product categories:
Accel Club does not deal in some product categories such as:
The best thing about the company is that it offers a revaluation. Thus, if the value of your business grows threefold for a period of continuous six months, you get paid for the difference. This excellent offer is not present in most FBA aggregators.
D1 Brands
D1 Brands is comprised of a skilled M & A team that comprises third-party sellers of Amazon-native. It is the only FBA aggregator that features Amazon-native third-party distributors.
Over the recent years, the D1 Brands team has succeeded in building many brands for private labels. It deals in product categories such as:
D1 Brands can be regarded as a top FBA aggregator as it features at least 2,000 product SKUs.
Foundry
Foundry is one of the FBA aggregators interested in Amazon businesses that generate less than $1M per year. This company considers all-sized e-commerce businesses, as long as their brands are enduring.
As the Chief Acquisition Officer at Foundry confirmed, the company seeks to acquire businesses with robust fundamentals and improve them by adding operational resources and capabilities.
The best thing about Foundry is that it is not Amazon-specific. Instead, it seeks great digital brands from anywhere, whether Walmart, Amazon, Etsy, eBay, Shopify, etc.
Reasons for Selling Your Business to Amazon FBA Aggregators
The following reasons will certainly make you consider selling your business to an FBA aggregator:
Conclusion
As the article has said much concerning Amazon FBA aggregators, now it is your time to take action. The industry is still a hot cake since only a few investors have ventured into it. Thus, there is room for promoting your brand effortlessly. Consider researching much about the various aggregators before settling for one.