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How Amazon Aggregators Can Maximize Profits and Accelerate Onboarding
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Aggregators are growing, and they are growing fast. In the last year, many aggregator companies have begun to pop up and are now becoming a major player in the Amazon space, as well as the e-commerce sector. Aggregators are now considered a primary driver of Amazon’s merge and acquisition, according to Fortunet’s survey.
With more competition and greater awareness of the growth of aggregators, let’s take a look at the Amazon aggregator basics look at what you should do before buying and the steps to onboarding new Amazon businesses.
The Amazon Aggregator Basics
What is an Amazon Aggregator?
Amazon aggregators, also called acquirers and consolidators, are businesses that acquire multiple Amazon brands intending to grow or combine them under one company or brand name. Amazon aggregators are quickly becoming an essential piece of the ecosystem.
This does not happen at random; a lot of intention goes into the consolidation, including finding products that pair well together, for example, combining a company that sells dog leashes with a brand that sells dog beds.
Companies acquiring businesses act as a type of investment firm with funds, resources, and strategy to help build and combine smaller businesses to build a successful brand. The best aggregators use their Amazon, marketing, and logistics knowledge to drive revenue and scale businesses.
As Amazon grows, so do aggregators.
How many Amazon aggregators are there?
As Amazon grows, so do aggregators. There have been over 40 new Amazon aggregators in the past few years.
Popular Amazon aggregators well known today include Thrasio, Perch, Branded, Founday, among many others.
5 Steps to Purchase & Onboard Amazon Businesses Quickly
From a business standpoint, once you have the operations in place for one Amazon business, it is much easier to add additional businesses. For Amazon aggregators, many are looking for the companies that will bring them the most sales with the least complications. Businesses that sell exclusively on Amazon are particularly attractive.
It is expected that acquisitions will increase even more in 2022, so let’s walk through what you should consider before purchasing a business and the steps you should take throughout the onboarding process.
1. Decide On the Best Business to Acquire
Be sure to pick a seller or a business that can provide you with something you don’t already have. Is your primary concern having a company with a successful built-out social media page, successfully maintained buy box position, a certain number of flourishing SKUs, or purely a revenue target?
Most aggregators stick to a specific revenue target, but there are many other aspects to consider, including:
- Registered Brands and Private Label Sellers
- Profitability and Reliable Profit Margins
- Sales on Amazon vs. other Platforms
- Number of Successful SKUs (more does not always mean better)
- Popular and Evergreen Products
- Customer Loyalty
- FBA Approved (makes logistics simpler)
- Low Competition
- Location (selling in the U.S. market if that is where your primary location is)
Never assume demand. Do your due diligence to ensure the business is a good fit by considering the abovementioned aspects. Do not assume there is demand. Dig deeper into keyword research and in-market competitive analysis to back your final decision.
Aggregators have a lot riding on their purchasing decisions but also have the experience and financial support to make the right decisions.
2. Prepare Your Reasoning & Make the Sale
Be sure to share your expertise. Some small businesses may need some persuading to feel comfortable handing over their business. This is your time to shine by letting them know what you can do to benefit their business, not only with cost savings and investment funds but also with expertise in SEO and Amazon knowledge.
Don’t move into a new market just because you are feeling pressure to be the first. Data-backed decisions will be the most successful in the long run.
3. Decide on Legal Agreements and Advisory Roles
It is common practice to keep the COO and e-commerce pricing manager after acquiring a business to stay with the company in an advisory type of role. Some Amazon aggregators will also include a non-compete agreement for specific categories and niches. Be sure you are clear with the business you acquire your expectations on advisory roles and legal contracts and have those expectations written up.
4. Cost-Effective Listing & Advertising Optimization
There are some metrics you know before the purchase, but as soon as the sale goes through, it’s time to dig deep.
If you are doing advertising and repricing in-house, there can be a lot of manual data to dig through. This is where technology comes in to save your team time and energy, as well as the ability to make decisions faster. Technology like Feedvisor360 gives you a holistic view of your newly acquired business performance allows you to move forward with your business decisions much more quickly, like getting rid of certain SKUs or optimizing lower-performing listings.
Further Reading: Amazon PPC and SEO Strategies to Optimize Paid and Organic Search Rank
5. Pricing, Logistics, and Acquisition Marketing
It’s time to apply your logistics experience and knowledge to adjust pricing and shipping costs. The SEO work and advertising strategies that you analyze in step four will be a good basis for these adjustments. If you are acquiring a new business, the best thing you can do is to scale the business and turn profits quickly.
Operationally, it can become more efficient if you acquire multiple companies rapidly to invest in technology that gives you a view into both your listing and advertising metrics. This is where Feedvisor comes in. As you add more stores, you want to avoid “tool sprawl” and use best-in-class software that will help you get visibility across brands in one place. Aggregating multiple Amazon accounts into a single login is super helpful and probably the critical value-add.
You Might Want to Know About This: Feedvisor offers a holistic, AI-driven pricing technology for brands and private labels, driving demand and accelerating revenue and profits and Amazon.
Challenges that can come up with logistics are often due to expanding internationally. There can be many roadblocks when it comes to expanding across the globe, including taxes, shipping, and supply chain constraints. Be sure that your reason for expanding is following customers’ needs and wants, and not the pressure to grow just to grow.
As an aggregator, you have the size, funds, and experience to better handle selling on Amazon than many of the small sellers. This is especially true when you invest in the technology that helps you scale. Feedvisor360 can help you validate profitable products, find the right price point, and advertise your product effectively and efficiently view and manage all in one place across a variety of Amazon businesses.
With a growing and fierce competition in the aggregator space, helping third-party sellers realize their full potential much more quickly can happen with Feedvisor’s dashboard giving you access to sessions data, conversion rates, and more in easy-to-pull reports. Learn how Feedvisor can grow your businesses on Amazon.