Within a remarkably short span of time, an overwhelming number of Amazon aggregators have emerged onto the scene. The latest numbers point to nearly 90 operators who have collectively raised over $13B to acquire individual FBA brands.
For FBA sellers looking to exit, the task of choosing an Amazon operator can often be an overwhelming process. While it is recommended to thoroughly research several operators before making a final decision, we’ve compiled the three primary factors to consider when determining the FBA aggregator best suited for your brand.
1. A Solid (and Long-Term) Track Record of Growing Acquired Brands
Arguably, the most important consideration to keep in mind when shopping around for the right Amazon operator is to determine the organization’s ability to: 1) Generate significant growth for your brand, and 2) Sustain this growth long term. While a majority of FBA acquisitions have some aspect of price participation baked into the deal, determining the aggregator with the best capacity to generate post-acquisition growth will undoubtedly provide you with the greatest return long-term. While most sellers focus on the initial payout after closing a deal, the real competition among FBA operators begins post-acquisition, when the race towards brand growth begins.
2. Liquidity
As initial multiples and valuations paid out to Amazon FBA sellers continue to climb, a recent trend has emerged where aggregators often find themselves unable to match their initial offers. In addition to choosing a well funded and institutionally backed operator, it becomes equally essential to choose an aggregator who will complete necessary research in advance, leaving no surprises until near closing time. In essence, having confidence that your chosen operator will stick to their initial evaluation, instead of adjusting the deal following due diligence (due to lack of funding, or incomplete research), will secure a sound transaction, avoiding months of wasted preparation, and missed opportunities for sellers.
3. Experience, Strengths, and Niche
One of the greatest aspects of Amazon’s FBA program is the opportunity for individuals anywhere—with ample dedication and grit—to sell on the platform. However, while you’ve managed to build a successful FBA business from the ground up, you wouldn’t necessarily trust your brand to any novice operator.
When deciding which Amazon aggregators to work with, it's important to consider the background, niche, and expertise of different operators within the landscape. Perhaps you’re looking for an operator with great experience managing brands within a specific category, or an operator focused on geographic or omnichannel expansion. Perhaps you are looking for a seamless exit, or are more interested in an involved price participation structure. No matter what you’re looking for, there’s most likely an Amazon operator suited to your specific interests, niche, and needs. Therefore, understanding what exactly you want from an aggregator, in addition to a thorough understanding of the operating landscape, will help clarify the best match for your brand.
