The Top Amazon Aggregators are Raising Millions of Dollars
Sell your Amazon business and run off into the sunset with all the money in the world. Too good to be true?
We’re witnessing a spike in the number of Amazon aggregators raising millions or maybe billions of dollars in venture capital. Some of the well-recognized examples include (subject to change):
With an ever-increasing number of Amazon sellers kickstarting their Amazon venture – and with them representing $300B in gross merchandise value, venture capital and investors all across the globe are looking forward to getting onboard.
Rather than purchasing these Amazon storefronts directly, VCs and investors are funding Amazon aggregators – who then purchase and grow dozens of eCommerce storefronts. And that’s not just the Amazon storefronts we’re talking about. If you sell your Amazon storefront to them, they’d probably be interested in purchasing your brand – as a whole – from you.
But that’s subject to negotiation.
For example, Thrasio, an Amazon aggregator that has raised $3.4B up until now, has purchased countless both on and off Amazon businesses since their inception – 2018.
Similarly, we’re witnessing brands like Perch, SellerX, Razor Group, Heyday gaining traction and closing a series of deals, helping VCs and investors boost their profitability and earn top dollars.
And while selling your Amazon storefront to an Amazon aggregator is one of the hottest trends in the eCommerce sector, third-party sellers are often left wondering, “Should We Be Selling Our Amazon Storefronts to Amazon Aggregators?”
To clear your doubts and help you make a mindful decision, we’ve prepared this blog post – where we’ll be diving deep into Amazon Aggregators.
To get started, let’s learn what are Amazon aggregators and who the top Amazon Aggregators are.
What are Amazon Aggregators?
In a nutshell, Amazon aggregators are nothing but acquirers or consolidators. The top Amazon aggregators like Thrasio, Berlin Brands Group, Razor Group, and more are backed by VCs and investors.
Their business model is simple. Let’s head over to Thrasio’s website to gain a much better understanding. Upon visiting their “Contact Us” section, you’ll see their Contact Us form pop right in front of your screen.
And if we just look at the options in their “Total Annual Revenue” part, you can see:
And that’s huge.
This means – Thrasio doesn’t acquire all Amazon storefronts. Instead, they purchase storefronts with a decent-huge profit margin. The higher the margin, the better will be the offer you get.
NOTE – Thrasio doesn’t just acquire Amazon businesses. In their “What is your business section,” you can see the following options:
On the other hand, there are also Amazon aggregators like SellerX that are laser-focused on purchasing Amazon storefronts.
Now, you may be left wondering – what’s in it for these companies, right? Why are they paying such hefty dollars to Amazon storefront owners for their stores?
Answering this question, these aggregators have their own marketing and sales departments. When we say – they’ll be buying your Amazon storefront, they won’t just be buying your Amazon storefront. They’ll be buying your entire operations – from Amazon account to manufacturing to your off-Amazon stores – everything.
However, that’s subject to discussion. Amazon aggregators are becoming a huge part of the Amazon ecosystem. And when they buy your Amazon storefront, they’ll be using their resources to scale your brand and boost their profit margins.
These aggregators hold the potential to turn these Amazon storefronts into global businesses with a steady cash flow. From their marketing finance departments, Amazon aggregators have all the resources they need to build a profitable business – and by selling your Amazon storefront to them, you’ll be giving them a boost.
Amazon aggregators are looking for:
- Registered eCommerce brands selling their self-branded products.
- FBA brands with a decent-high profit margin
As a third-party seller, you may not really want to sell your baby (Amazon venture) for a lump-sum amount. And while that amount may be huge, you may want yourself to be a part of it. So – you can negotiate with the Amazon aggregators yourselves to reach the middle ground and maybe operate on a shared revenue model.
All of it depends on the terms.
Should You Sell Your Amazon Business to Amazon Aggregators?
We understand that your Amazon storefront may be your baby. Amazon is a $1.7 trillion company – and in the near future, we’ll be witnessing it reach the moon (not practically.)
Maybe when Elon Musk takes us to the moon (pun intended), we’ll have an Amazon storefront there – who knows what the future holds?
As we mentioned before, Amazon aggregators have all the resources and experts in the world who’d love nothing more than to scale your Amazon business and operations upon acquisition.
From their marketing department to their logistics, they’ll build a streamlined process to turn your business into a global company. However, Amazon aggregators like Thrasio & SellerX, before they buy your Amazon business would love to understand whether your business is the right fit for them.
After all, if they are purchasing your business for millions of dollars, they need to make sure that your business is the right fit for them. At the same time, upon acquisition, they’ll take care of your business like it’s their own baby.
Upon acquisition, Amazon aggregators focus on increasing the inventory to expand their operations and hit the global market. With their knowledge and logistics experience, they can make the necessary adjustments and at the same time promote your business to boost the profit margins.
Here’s a diagram perfectly representing the End-to-End ecosystem:
Amazon aggregators have the funds, market access, marketing experts, and expertise needed to scale your operations globally.
Amidst this, you may not really want a lump-sum amount – as a part of your acquisition process. Maybe, a 10% profit margin seems reasonable. And while most Amazon aggregators offer lump-sum amount as a part of the acquisition process, it’s subject to discussion.
Amazon Aggregators like Thrasio, Berlin Brands Group, SellerX would love nothing more than to discuss this further with you. Feel free to submit your contact details with one of them to connect with one of their representatives.
By William Gasner
CMO at Stack Influence
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