In recent years, e-commerce has become an increasingly important part of global businesses and the economy, and Amazon has emerged as one of the most dominant players in the industry.
However, as competition intensifies and Amazon’s rules become more complex, Amazon sellers are finding it difficult to succeed on their own. This is where Amazon aggregators come in – they offer a solution to help sellers grow and thrive.
In this article, we will provide a comprehensive guide to know about Amazon aggregators and explore some in-depth discussions.
What is an Amazon Aggregator?
Amazon aggregators are companies that acquire and operate multiple Amazon businesses to optimize their performance and maximize profitability.
In other words, they buy smaller Amazon businesses and use their expertise to improve their operations, increase their sales, and grow their brands.
Amazon aggregators typically work with sellers who have established businesses on Amazon, but may not have the resources or expertise to take their operations to the next level.
How do Amazon Aggregators Work?
Aggregators work by identifying promising businesses in Amazon that are already generating revenue and have a proven track record of success. They then acquire these businesses and use their expertise to optimize their operations, streamline their supply chains, and implement more effective marketing strategies.
Amazon aggregators may also provide capital, resources, and support to help Amazon sellers grow and expand their businesses.
Since Amazon has been the biggest e-commerce marketplace in past years, FBA aggregators are taking the advantage of the traffic as well as the investment opportunities. Now Amazon has dozens of aggregator companies searching for successful Amazon brands with products available to sell in other ecommerce platforms or as DTC brands.
Top Amazon Aggregators
There are a growing number of Amazon aggregator companies in the market today, each with its unique approach and value proposition. Some of the most well-known top aggregator companies are:
Thrasio is one of the Amazon brand aggregators founded in 2018 and has since grown rapidly, raising over $2 billion in funding and acquiring over 150 Amazon FBA businesses and having a valuation of $20 billion.
Thrasio acquired multiple Amazon brands including toys, pet supplies, bear care products, sports equipment, beauty products, and personal care brands. According to reports, Thrasio generated annual revenue of $1 billion in the year 2021.
Merama is a Latin American Brands aggregator that specializes in acquiring and scaling high-potential e-commerce brands in the Amazon marketplace. They provide funding, operational support, and expertise to help brands grow and succeed in the competitive e-commerce landscape.
Perch is one of the Amazon brand aggregators that acquires and consolidates successful FBA businesses with a proven track record of Amazon sales and revenue.
Benitago Group is a New York-based group and the creator of the aggregator match guarantee. The company acquires FBA businesses and operates them in a single entity and aims to achieve economic scale, improve profitability, and drive growth.
Boosted Commerce is one of the Amazon seller aggregators that acquire brands and consolidates FBA businesses with a focus on consumer goods such as personal care, and home and pet supplies. Their estimated annual revenue is reported at $37.1 M.
Boosted Commerce’s acquisition process involves a thorough due diligence process. They also offer a personalized approach to Amazon sellers’ needs with an emphasis on preserving the seller’s brand identity and continuing to provide high-quality customer experiences.
Heyday is a relatively new aggregator based in San Francisco.
The company acquires multiple Amazon brands focusing on beauty and personal care, and home goods categories.
Elevate Brands is one of the Amazon seller aggregators that acquire and scale brands from Amazon FBA. The company was founded in 2020 by Ryan Gnesin, a former executive at Amazon based in New York.
Elevate Brands is one of a growing number of Amazon aggregators that are seeking to capitalize on the explosive growth of third-party sellers on the Amazon marketplace.
The company aims to build a portfolio of successful FBA brands across a range of categories such as beauty products, health and wellness, pet supplies, and home and kitchen products.
Berlin Brands Group
Berlin Brands Group or BBG is a Berlin-based aggregator founded in 2005 by Peter Chaljawski. BBG operates in several product categories including home and living, sports and outdoors, toys, consumer electronics, and kitchen and household.
BBG brands are primarily sold through multiple marketplaces such as Amazon and eBay, and its e-commerce platform.
These companies have collectively raised billions of dollars in funding and acquired hundreds of Amazon businesses, making them major players in the e-commerce industry. Some aggregators are focusing on categories of home and wellness, sports and outdoor, and baby products while other aggregators are environmentally conscious brands.
Here is a list of some notable FBA aggregators:
- Cap Hill Brands
- Society Brands
- Accel Club
- Forum Brands
- Moonshot Brands
What does an Amazon Aggregator Look for When Buying a Brand?
Strong Sales and Revenue
Amazon aggregators are looking for brands that have a proven track record of strong sales and revenue. This means that the brand should have a history of consistent sales over time, indicating a loyal customer base and potential for future growth.
Private Label FBA Businesses
Private-label brands are appealing to many aggregators because of the following advantages:
- Prime shipping eligibility
- Logistically convenient – less hassle for packing, shipping, and returns
Number of SKUs
Most aggregators are attractive to Amazon FBA brands with lesser SKUs generating sales revenue let’s say $1 million than diversified SKUs generating the same amount or lesser.
Quality Brands and Products
A brand with high product quality is more likely to receive interest from most aggregators. Products that consistently receive positive reviews and have high customer satisfaction ratings are more likely to be successful on Amazon and generate revenue for the aggregator.
Most aggregators are looking for brands that have the potential to grow efficiently. This means that the brand should have a solid foundation, inventory management, systems in place for production, and shipping that can be scaled.
Brands with strong intellectual property protection such as patents, trademarks, and copyrights, are more attractive to aggregators. This provides a competitive advantage and makes it more difficult for competitors to copy or replicate the brand’s products.
Brands that have established a strong reputation and recognition in their niche are more likely to be successful on Amazon. Amazon aggregators are looking for brands that have customer loyalty and positive brand recognition, as this makes it easier to market and sell the products on the platform.
Should Individual Sellers Sell their Brands to Amazon Aggregators?
The decision to sell your Amazon business to an aggregator depends on your goals, financial situation, and risk tolerance. You may want to talk to a consultant or financial advisor to evaluate the pros and cons before making a decision. Here are a few pros and cons to consider:
- Cash infusion
Selling your business can give you a large sum of cash upfront, which can be useful for starting a new venture, paying off debts, or investing in other areas.
- Reduce risk
Once you’ve sold your business, you’re no longer responsible for its performance or any future risks.
- Lower Valuation
Aggregators often purchase businesses for less than their potential market value. This is because they’re assuming the risk of owning and operating the business.
- Loss of control
Once you sell your business, you’re no longer in charge of its direction or decisions.
- Potential misalignment
Aggregators may focus on short-term profits, whereas you may have a long-term vision for the business.
What are the criteria to consider when selling your business to Amazon Aggregator?
When planning to sell your business to an Amazon aggregator, it can be a great opportunity to cash out on your hard work and expertise in running an e-commerce business. However, it is important to consider several criteria before finalizing the sale. Here are some key factors to keep in mind:
The first and most important factor to consider if you sell your business is the valuation. You should research the current market trends and the potential value of your business to determine a fair price.
Potential buyers will look at your track record including sales generated, profit margins, and customer reviews. Having a strong track record can help you command a higher price.
Your brand equity can also impact the valuation of your business. If your brand has a strong following and reputation, it can be more valuable to a buyer.
If you have any patents, trademarks, or proprietary technology that is critical to the success of your business, be sure to highlight it.
Amazon Account Health
The health of your Amazon account is also an important consideration.
If you have a history of account suspensions or poor performance metrics, it can lower the value of your business.
Contracts and Agreements
Any existing contracts, supplier agreements, and distribution agreements should be reviewed before the sale. It is important to ensure that the sale will not violate any existing agreements.
Before signing any contracts and agreements, it is important to conduct due diligence on the potential buyer. This includes researching their track record, financial stability, and reputation in the industry.
Finally, you should consider what kind of support you are willing to offer the buyer after the sale. This could include helping with the transition, providing training, or even staying on as a consultant for some time.
What is the Future Outlook for Amazon Aggregators?
The future of Amazon brand aggregators appears bright as Amazon continues to dominate the e-commerce industry. Potential developments and trends could shape the future of aggregators such as:
- Increasing competition
- Expansion into new markets
- Greater focus on brand building
- Integration with other e-commerce platforms
- Increase scrutiny from Amazon
Overall, the future of aggregators looks promising with plenty of opportunities for growth and innovation in the years ahead.
As the e-commerce industry continues to grow and evolve, the future for aggregators looks bright, and entrepreneurs should consider the opportunities presented by this dynamic and exciting space. Overall, Amazon aggregators have become a vital component of the e-commerce ecosystem, and their role is likely to become even more important in the future.
Frequently Asked Questions
What are Amazon Aggregators?
They are companies that acquire and manage Amazon third-party seller accounts with the aim of scaling and optimizing their operations for increased profitability.
How much do aggregators pay?
The amount the aggregator pay varies depending on the valuation of your FBA business.