Loading...
Let our Amazon experts show you how to leverage the power of ZonGuru to smash your sales goals. You’re invited to a 15-minute Rocket Demo so you can see the ZonGuru tools first-hand.
Book your seat now!
If you have established a successful Amazon FBA business and are considering what to do with it next, you might feel confused and lost.
You might be asking yourself: where to sell my FBA business?
Or
If you’re a new seller who wants to establish an FBA business to flip it later for tremendous gains, you may be searching for an avenue beforehand that can offer you the maximum yield.
There are companies called aggregators interested in paying you a massive sum of money for your running FBA brand/gig.
If you are interested in selling your Amazon FBA business to earn big or secure funds for the next venture, you may want to read up on Amazon aggregators.
This article will walk you through everything you need to know about Amazon FBA aggregators.
What you will find in this post:
So without any further delay, let's start.
Amazon aggregators are companies that work to find and buy Amazon businesses (primarily Private Label FBA brands). According to research conducted in 2021, Amazon aggregators have paid $2-$5 million to Amazon sellers interested in selling their businesses.
Amazon aggregators act as investment firms for small Amazon FBA brands. These firms polish, scale and expand running businesses on Amazon. The top Amazon aggregator firms spend large funds on the businesses of interest to catalyze revenue generation and make the business profitable for investors and other stakeholders.
An aggregator firm mainly consists of e-commerce experts (including Amazon veterans), data analysts, marketing gurus, accountants, and business communication specialists. Their focus is to provide the required marketing expertise and operational management for FBA brands to scale and compete with successful businesses on and off the platform by exposing them to a global audience through a well-designed plan.
Aggregator firms have been a vital part of the e-commerce market. However, recently they have started focusing on Amazon businesses as well. In 2021, Amazon aggregators managed to raise around $12 billion in equity and debt financing. The amount indicates how much capital is going into buying, consolidating, and expanding small Amazon businesses.
The primary goal of Amazon aggregators is to find an innovative, successful business that matches their line of interest. Then, invest money, time, and versatile business expertise to expand the brand in revenue and reach. The ultimate goal of an Amazon aggregator is to transform an FBA business into a standalone Direct-to-Consumer (D2C) brand.
Amazon aggregators primarily invest in small businesses that can be scaled (mainly those with annual revenue of less than $1 million).
Although these aggregators focus on scaling up different businesses by consolidating them, they have specific requirements that the businesses need to fulfill (more on that later).
As of 2022, there are more than 95 active Amazon aggregators. They are based in different parts of the world— from the US to UK and Sweden to Japan. We have compiled an Amazon aggregators list based on the investment they’ve raised:
The list above shows that Amazon aggregators are rising in almost every region. Also, there is a lot of diversity in terms of their operational size and market cap. There are aggregators that have raised over a billion dollars. Then, there are also the ones operating with an investment of less than ten million dollars.
As conventional retail shopping witnessed a sharp decline during the pandemic, Amazon FBA brands saw impressive growth during the same time. This also brought significant activity in the aggregator market, with firms witnessing an uptick in their funding and revenue.
Nonetheless, the Amazon aggregator space is still in its early stages and is yet to grow. Therefore, it is hard to put a figure on its market size. Moreover, no data is yet available on the collective financial outlook of the aggregator space.
It is also important to note that the funds and revenue depend totally upon individual aggregators and their niches. But if we do a rough estimate of the entire market, the revenue generated by successful Amazon FBA aggregators so far through buying and scaling different businesses is in the range of $200 million-$5 billion.
The aggregator business model is about buying established FBA brands to scale and consolidate them to the next level. The idea is to create a full-fledged Direct-to-Consumer entity out of an FBA brand(s) that can thrive on Amazon as well as outside of it.
Amazon aggregator operations entail organizing different smaller unorganized businesses by improving their business strategies, realigning their objectives, and investing more capital in them. These companies search for small yet well-established brands that can be expanded by promoting and scaling their business.
An Amazon aggregator usually doesn’t focus on all product categories. Instead, they chose particular niches and then only operate within them. They search for promising FBA brands in the given niche with owners willing to sell them. Aggregators then funnel in money to scale the brand more aggressively.
Besides brand scaling, they also work on consolidating multiple brands under the same hood. For example, suppose one acquired FBA brand is famous for leather jackets, and another acquired brand sells its leather wallets like hotcakes. The aggregator may drop the underselling products of both brands, focus on their star SKUs (jackets and wallets), and consolidate them as a single brand. Similarly, aggregators try to acquire businesses of the same niche where it’s easier to cross-sell multiple products to increase net revenue.
It is pretty simple. The aggregator reaches out to the brand they are interested in buying. Amazon aggregators have requirements like a specific category, minimum revenue, profitability, product seasonality, etc. (discussed in detail under the section: How Do Amazon Aggregators Evaluate a Business).
Once both parties agree to do business, they sign a contract, and the business owner formally hands over their FBA brand/gig to the aggregator. The aggregator pays a reasonable sum of money to the business owner and starts working on scaling the business to generate more profit.
Simply put, Amazon aggregators make money by improving the net worth and revenue of a small FBA business they buy to revamp and scale. However, adding value to an existing business for widening its revenue stream includes many things. The following section will outline that.
As mentioned earlier, Amazon aggregators try to capitalize on Amazon brands that sell overlapping niches. They look for different products of similar niches and try to consolidate them under the same label. An Amazon brand aggregator firm has specialists with vast experience running e-commerce businesses. They try to scale every business faster than its last owner.
The aggregator teams comprise the best human resource for scaling an Amazon business, from IT specialists to SEO/PPC experts and brand strategists to seasoned Private Labelers. Their job is to understand the business as much as possible, pay attention to its shortcomings and formulate a plan to fill in the gaps. The ultimate goal is to transform a small FBA brand into a robust D2C business with revenue increasing multiple times.
To increase that revenue to make money for themselves and their investors, aggregators do a number of things.
An aggregator may conduct extensive pricing revisions to ensure the brand can set its imprint among the target consumer base. For that, they may even compromise on the margins for a while and compensate for the expenses from the investment money. The idea is to build a loyal brand audience that doesn’t ebb away even when the business starts with its off-Amazon endeavors.
A top-quality product and competitive prices can be rendered useless in attracting customers if the listing content can’t persuade them. Therefore, a listing must have the best title, description, and bullet points. Moreover, it is very crucial to populate a listing with the most relevant keywords for a product. Ranking high in Amazon search result pages is always paramount for increasing traffic and conversions.
This fact is not lost on aggregators. So, naturally, they try to optimize the existing listing portfolio up a notch.
When an aggregator acquires an Amazon brand, they open the floodgates of marketing. Whether it's Sponsored Product/Brand ads or Product Display promotions, they make the most of PPC marketing by directing a significant promotional budget in that direction.
Moreover, they try to establish the brand’s footprint outside of Amazon as well. For that matter, they invest heavily in social media promotions and PR campaigns. This aggressive marketing and outreach strategy plays a crucial role in providing FBA brands with an elevation where they can eventually operate as D2C businesses.
As reiterated several times, Aggregators banks on overlapping niches and cross-selling by consolidating multiple FBA brands. This strategy pays dividends in more than one sense. On the one hand, selling related/supplementary items increases revenue. On the other hand, cross-selling helps in deepening consumer relationships and loyalty. It eventually translates into better customer lifetime value and retention.
Having a growing Amazon FBA business might be thrilling, but it starts taking up a lot of your time as your customer base increases rapidly. In addition, you keep track of the inventory, received orders, product quality, customer service, Amazon charges, and even product returns, etc. All of this is too much of a hassle if you have multiple gigs and need to give your other ventures an equal amount of time.
Then, many sellers set up FBA brands to flip them later on for huge gains.
If you belong to either of the sellers’ groups, you should consider selling your business to Amazon aggregators for the following reasons.
By selling your business to an authentic Amazon brand aggregator, you let a company take care of your business more smoothly and efficiently. You are less likely to hit any snag while handing over your business to an aggregator. Also, aggregators ensure that they inherit a brand and keep its integrity intact.
Some of the top Amazon aggregator firms have experienced professionals to oversee every aspect of an Amazon business operation. They are on standby to fix any problems an FBA business may face during transition. In addition, the staff takes care of a brand at every step to ensure an excellent customer experience irrespective of the transition.
Every Amazon business buyer is not the same. For instance, many FBA business buyers just want to capitalize on the existing credibility and sales of the brand. But, then, there are buyers like aggregators that want to transform an FBA brand into a D2C brand across platforms.
If you want your FBA brand to do good even after the sale, your best bet is Amazon aggregators. They are expert business handlers who can fix the intrinsic shortcomings of a brand since they don’t have budget strains and are not short on technical expertise either.
Amazon aggregators tend to put better offers than other FBA business buyers. So, by selling your business to aggregator firms, you don’t only see them unfold the maximum potential of your business with a systematic approach, but you also become wealthy. Also, if you want to switch niches or start a new project, you will be able to secure the required funds by selling your business to an aggregator.
In short, if you think you have done everything you could to expand your business and now want to explore new niches or need a sweet sum of flipping money, selling your business to an aggregator is perhaps the best option.
The Amazon aggregator business model is a relatively new phenomenon in the market, but it is already successful. There are many Amazon aggregators that have raised billions of dollars and are ready to invest between $1M-$15M in Amazon FBA businesses.
Some of the top Amazon aggregators are listed below.
Thrasio is one of the largest Amazon aggregator companies in the world. Despite being launched only a few years ago, in 2018, the company's current worth is $1 billion. They buy businesses with net annual revenue greater than $1 million. Thrasio has a strict evaluation process in which they consider a business's supply chain and marketing plans before buying and redesigning its business plan.
Thrasio focuses mainly on Private Label FBA businesses and does not entertain Retail Arbitrage or Wholesale options. Their categories of interest include a range of products, from kitchen utensils to pet supplies. They specifically avoid products that do not have a long-term demand and have the possibility of going obsolete within a short period of time.
SellerX is a Berlin-based company that has raised around $700 million and has bought approximately 40 brands since it was established. SellerX reaches out to brands with year-long stable sales with a rating above four stars. If your business has more than $1 million in annual revenue, you might want to consider selling your brand to SellerX.
SellerX scales different businesses and promotes their diverse gigs to attract shoppers from all demographics and consumer bases. This aggregator deals with a range of products, including pet supplies, gardening tools, home & kitchen stuff, and fitness gear.
Perch is a successful Amazon FBA aggregator with around 80 brands in its portfolio. They take an interest in different brands that have $1M annual revenue, or roughly $200K net profit. Perch also deals with international sellers, with about 40% of their sellers based outside the United States. Their operations are strong in the United States, European Union, United Kingdom, and Canada.
Perch does not buy only a specific category. They are keen to buy a diverse group of brands, including categories like home and garden, health and wellness, and children's apparel. According to their website, Perch does not buy businesses related to CBD products.
Suma Brands has raised $150 million funds since the company was established. It is a US-based company that focuses on household products. They are known for their simplified business transition process (evaluation, migration of Seller Central account, and money transfer).
Greenhaus focuses on different channels and sells products to its worldwide customer base. The company only acquires less than five businesses a year, but that does not mean it's an unsuccessful aggregator. In fact, they pay more attention to quality than quantity.
Greenhaus prefers to engage with brands that sell beauty & personal care, health & household, and pet supplies. They are also interested in acquiring businesses that deal in products for babies, home & kitchen lawn & garden, sports & outdoors. Clothing and accessories, electronics, and collectibles are some niches where Greenhaus doesn’t operate.
Elevate Brands closes the deal within 30 days to give the business owner a smooth exit. This company has raised about $370 million funds so far and is enthusiastic about any brand with stable sales and good reviews with a 20% profit margin and $1 million annual revenue.
Their focus is on a wide range of brand categories, for instance, pet supplies, home and kitchen, personal care & beauty products, and baby products.
Unybrands are interested in doing business with any brand on Amazon and Shopify that has net revenue of $1 million. However, they have a category preference and usually initiate deals with businesses that focus on personal care products, sports, fitness, lifestyle, supplements, art, baby and pet care, gardening, and outdoor categories.
Rainforest is a Singapore-based e-commerce aggregator and brand builder with an experienced team of product innovators, marketers, and team builders focusing on building reliable brands for their consumers.
Rainforest's primary focus is categories related to home and baby care space.
Growve has recorded net revenue of more than $550M in the recent past. Their primary focus is on the nutrition and wellness category. They primarily take an interest in recreational businesses, supplements & active nutrition, sports & outdoors, beauty & personal care, healthy lifestyle foods, home & leisure, and pet care.
Accel Club is an Amazon aggregator company based in Amsterdam. They have a strong team of experienced entrepreneurs and tech professionals who scale businesses in different categories. Their requirements are pretty simple: the business you intend to sell to Accel Club should be a leading FBA private label name in the given product category.
Establishing an Amazon FBA business is not an easy task. Once your business starts making a profit, it is natural for you not to be interested in selling it to anyone. However, if you want to focus on more gigs and the business is getting too big for you to handle, then you must find the right Amazon aggregator to take care of your venture.
The question is, how would you know which Amazon FBA aggregator is the right choice for you? One must consider a few points while looking for the right Amazon aggregator. We will walk you through them one by one.
There may be multiple Amazon FBA aggregators interested in buying your business. While evaluating their business structure, proposals, and conditions, your first question should be: does the aggregator have the required skill set to run your business?
Before sealing the deal, you need to closely observe their knowledge, skills, and expertise in your niche. Find out about the people running the given aggregator business and their track record with respect to e-commerce in general and Amazon in particular.
Also, a good aggregator doesn't always need to be able to understand your niche and product. Therefore, you may not want to sell your FBA clothing brand to an aggregator that primarily operates in, say, the Home & Kitchen category.
Do not rush the process! Meet with as many aggregators as possible. Ask questions about their future plans for your business and how they intend to change the preexisting strategies. Remember that your brand is valuable to you and should only grow when you hand it over to someone else.
Multiple perspectives from different aggregator companies will give you a clear picture of how you want to proceed with your brand. As a result, you will be able to determine the future owner of your brand with much more clarity.
While discussing other things, ask about the funds they are willing to invest in your brand. Discuss the roadmap for the future of your brand with the potential owner. Try to understand how they invest the funds in scaling a brand. This information will help you foresee the future of the business you want to sell.
Some aggregators are willing to sign earnout deals with the FBA brand sellers. By signing an earnout deal, you get remuneration if your FBA brand goes on to achieve specific financial goals after the scaling and improving endeavors.
If you think your gig hasn’t hit a plateau yet and got a lot of growth potential, try to partner with an aggregator that agrees to include an earnout clause in the acquisition agreement.
The aggregator landscape sees new players every day. However, if you’re not just after the acquisition money but genuinely want your brand to do well, work with experienced aggregators. Experienced aggregators are those that have successfully transformed many small FBA brands into large D2C businesses.
Such aggregators have the required human resources and capital to take your FBA brand to the next level. By teaming up with experienced aggregators, you can be confident that your FBA brand will make a further mark instead of fading into oblivion.
Your successful business might attract Amazon aggregators, but do not get too excited. While it is possible that your annual sales fulfill the requirements of an Amazon FBA aggregator, it is possible that your business might be lacking the required SKUs or business models.
Generally, aggregators look for Amazon FBA brands with a stable customer base and steady profitability, but it is not as simple. To help you decide how you can sell your business, we have made a list of parameters used by Amazon aggregators to evaluate an Amazon business.
The first major requirement of the Amazon FBA aggregators from a business is having at least 15% profitability. In addition, all the Amazon FBA brands considered for consolidation must have minimum annual revenue of $1 million or a minimum monthly net profit of $20,000. Amazon FBA aggregators do not usually consider any business below these numbers as it might lack the potential for expansion.
If your business makes more than $20,000 net profit a month, you might be able to sell it for north of $1 million.
Not all, but some Amazon aggregators definitely look for a specific niche. For example, an aggregator firm that has previously dealt with device chargers, flash drives, and other digital devices might not be interested in skincare products.
The relevant niches help the Amazon FBA aggregators better focus on enhancing the brand's reputation and reaching a wider audience. In addition, keeping track of sales, profit, and customer services is also easier in the case of similar niches.
Selling one-time products is not the best business strategy in general. Items that are bought for long-term use (like refrigerators, stoves, dishwashers, air-conditioners, lawnmowers, etc) do not attract customers every day. They are also bigger in size, resulting in costlier shipping compared to smaller products.
Amazon aggregators prefer businesses that do not sell such one-time products. Instead, they look for products with high sales throughout the year with a high potential for further strengthening their customer base.
If there is one thing that can make or break your business, it is the quality of your product. Ensuring that you deliver a good quality product to your customers will earn you positive feedback from them.
Positive customer reviews are the key element in amplifying a brand's audience. It brings in more customers and increases sales, which leads to a higher profit margin.
Amazon aggregators pay keen attention to product quality and feedback engagement on a seller's account to ensure the brand is reliable and trustworthy.
Since Fulfillment by Amazon covers inventory storage, product packaging, and shipping, it is the preferred model by most Amazon business owners.
An Amazon aggregator looks after many businesses and does not want to deal with the trouble of packaging, shipping, and returns of the product. Therefore, they prefer businesses that use the FBA business model.
Apart from that, FBA is Amazon's major requirement for a business to qualify for the Amazon prime seller badge. Amazon Prime gives you the below advantages:
Keeping these points under consideration, aggregators seek Amazon businesses that are primarily established around Fulfillment by Amazon (FBA)
Amazon FBA aggregators prefer to work with private label ventures over other business models. A Private Label brand is responsible for the designing, manufacturing, labeling, and pricing of a product. While a third party manufactures the product, only the brand owner has control over significant details, sometimes as trivial as the packaging and color of the product.
Amazon aggregators primarily deal with businesses enlisted in the Amazon Brand Registry, speaking of which…
It is important to note that you can run a successful business without getting your brand registered in the Amazon Brand Registry. However, Amazon aggregators firmly require the target brands to be enrolled in the Amazon Brand Registry.
The Amazon Brand Registry gives you a trademark and legitimizes your brand. Amazon Brand Registry can prove to be highly advantageous in the following ways:
Keeping all the above features in mind, enrollment in the Amazon Brand Registry is a very useful step for Private Label brand owners, especially when you intend to transform your private label into a brand or sell your FBA business to an Amazon aggregator.
Violation of any kind of Amazon terms and conditions can result in the deactivation of a seller account. This could result in a great loss for the seller. Therefore, Amazon aggregators prefer to do business with retailers that strictly follow the rules to avoid inconveniences.
We have discussed how the Amazon brand aggregator model works. You can successfully work with aggregators to generate maximum revenue by selling your business. However, along with the advantages, there are also a couple of disadvantages that you need to be aware of when working with aggregators.
So, let's look at the upsides and downsides of partnering with an aggregator one at a time.
By selling your business to an Amazon FBA aggregator, you can get the best return from your business. All the blood, sweat, and tears that go into building an FBA brand from scratch are compensated when you get a valuation in staggering multiples of your initial investment and operating costs.
If you succeed in inking an agreement that includes an earnout deal, you can keep earning from your brand even after selling it. The earnout deal is something that you can only find with Amazon aggregators. Individual business buyers usually don’t entertain the earnout demand of FBA brand sellers.
Aggregators are masters of time management and efficiency. Therefore, when you seal a deal with them, you will experience a very smooth transition in a quick time without any hassle and unnecessary back and forth. In addition, all the paperwork, accreditation, and money transfers are done in the most professional way possible without any mischief and gaffes.
With individual buyers, you can strike a deal where you can still have some stake in your FBA gig. However, that’s not the case with aggregators. Usually, you have to sell 100% of your stakes to them. As you hand over your business to an aggregator, you can still work with them as an advisor until they understand your business properly. However, you give up the reigns of your business as the Amazon brand aggregators take over.
Sellers don’t always get the right valuation of your FBA business from aggregators. Therefore, you may have to make a tradeoff where you get quick money while selling your FBA gig but perhaps not at the right price.
Whether you look for a smooth exit from your business since you already have too much on your plate or want to get a bumper return by selling it off, Amazon aggregators are there to help you. However, those investment firms are primarily interested in a business that is thriving and has the potential to grow further.
If you’re still in the process of making a mark with your FBA gig, first give your 100% to it to make it a business that can churn around $1 million annual net revenue. Only then should you consider going to an Amazon aggregator.
Are you looking to streamline your FBA business to make it a flippable asset?
Get the ZonGuru seller toolkit to realize your full business potential. Whether finding new niches, optimizing a list, or keeping an eye on competitors, our toolkit assists sellers with almost all their tasks.
Try it for FREE!
Discover opportunities. Maximize your sales. Grow your Amazon business!
.svg){kind=icon}
Get started with ZonGuru, access all the tools with a FREE trial.
.webp)
Start FREE Trial
Discover your true sales potential in 2024. Try our statistically-proven methods!
See If You Qualify
