The world of E-commerce has grown rapidly in the COVID-19 due to the increase in online retail shopping. Online businesses on Amazon and other e-commerce platforms have seen impeccable growth due to the rise in global customer demand.
Amazon Aggregators entered the Amazon cosmos with the innovative idea of acquiring Amazon FBA businesses and scaling them. These aggregator companies have grown with great acceleration in the last two years. Total fundraising by these aggregators was approximately 13 billion US dollars by the end of 2021.
FBA aggregators receive funds from the world’s biggest individual investors and venture capital firms that provide funding to potential projects. Aggregators use this investment to acquire different FBA businesses and scale them to raise revenues for their investors.
Under the umbrella of Aggregators, the brand experiences a 30 percent increase in sales after two months of its acquisition period. The business model of aggregators is successful in terms of revenue generation for their investors.
If you think of investing in FBA Aggregators, you must know five things before investment: Who are they? What are they looking for? How can they generate revenues for their investors? What challenges can they face? Who are the leading Aggregators in the market?
It will provide you with complete knowledge of these aggregators before investing with Aggregators.
- Who Are FBA Aggregators?
Aggregators use to acquire and scale small and medium-size businesses both on and off Amazon. They provide people with a different range of products available at cost-effective prices and simultaneously provide opportunities to small businesses for growth.
After the business acquisition, aggregators become the catalyst for small businesses’ growth by making brands profitable and expanding globally.
They receive excessive funding from their investors to buy small and medium Amazon businesses. They are smart workers with having a team of professional e-commerce experts. They have the latest analytical tools that help them evaluate business and make the right decisions for growing them.
- What Are They Looking For?
Before buying any business, Aggregators go through a due diligence process to ensure that their purchases of businesses will be successful and brand shows the potential of long-term success.
Mostly Aggregators purchase Amazon third-party sellers for scaling them within the Amazon universe. Amazon has the largest customers base globally, with 200 million active users. Business is boosted with a great acceleration within Amazon world under the hands of Aggregators.
Aggregators don’t go for any small and medium business for acquisition. They are interested in specific businesses capable of generating long-term revenues. If you want to sell your business Aggregators, here are the few points they will consider mostly:
- Registered brands.
- Enhanced profitability.
- Range of products offered.
- The demand for your products.
- Geographical segmentation.
- Customer satisfaction and loyalty.
- Abiding by terms and conditions of Amazon.
- How can they generate revenues for their investors?
Within two years, millions of shoppers turned to online shopping, and demand has become an all-time high. Aggregators have the resources to scale small businesses in the short term. These small businesses could never have the capacity to do so by themselves.
Small businesses benefit from the extensive knowledge of experts working for aggregator companies. They provide acquired businesses excess to the international markets for brand exposure and sales generation, enhance their SEO and provide the funds for growth expansion.
By applying innovative and potential marketing tactics through investment, they make brands largely profitable. Brands working under the umbrella of FBA acquirers experienced a 30 percent increase in their sales after two months of their acquisition period. It proves that their business strategies are perfect for brand expansion.
- What challenges can they face?
Aggregators face a lot of things in their business management and operational procedures. They receive massive funding from investors for purchasing small FBA businesses along with pressure to make these acquired brands successful. These companies face many challenges in the acquisition process, and a single mistake can decline business growth. Jim working in Thrasio, explained some common challenges that aggregators can face along with their solutions.
Jim explains that acquisition of business shouldn’t start from assuming product demand. A brand can appear to be a sure success, but you should dig down into deeper facts. Do keyword research to find the nature of a product with high demand and possesses the long-term potential to grow.
Don’t feel under pressure to enter the new market. Keep watching brands with similar products and when you feel comfortable for your success assurance, make a move.
You also have to think about logistics before making business decisions. If you want to expand internationally, you have to face extra costs like taxes, shipping, and others such as Brexit.
There are different challenges that businesses can face in different markets in scaling businesses and expanding them within international boundaries. The most important thing is to optimize your strengths and make sure you know about the needs and wants of your customers.
If you know to tackle these challenges, you can run a successful business.
- Who are the leading Aggregators in the market?
The top enlisted FBA aggregators in the market looking to acquire your Amazon FBA business are:
- Thrasio
- Benitago
- Seller X
- Alphagreen group
- Berlin Brands
- Perch
These aggregators have raised billions of dollars in funds to purchase FBA brands and scale them. Top investors of the world are heavily funding these companies.
Conclusion
FBA aggregators have transformed the ecosystem of Amazon by nurturing different FBA brands with impeccable growth. They acquire businesses and scale them for generating revenues for their investors.
If you think of investing in FBA Aggregators, you must know five things before investing. This article will provide you with an illustration of these points.
