Secrets to Building Your Brand: How to get noticed by Amazon Marketplace Acquirers
What are Amazon Aggregators?
We all know Amazon is the world’s number one marketplace. It’s gross merchandise value for 2020 was a staggering $475 billion. On top of that astounding number, there were one million new FBA sellers that year. This landscape is seeing exponential growth with no end in sight as ecommerce needs continue to rise and Amazon outpaces other conglomerates. It’s no surprise Amazon aggregators are dominating the acquisition market.
Amazon aggregators function similarly to micro-private equity firms, buying up and consolidating Amazon storefronts under one company and using their capacities to scale the brands. Having an aggregator buy your business means your brand can see accelerated growth and you get the compensation you deserve for the hard work you have done.
What are the benefits of getting acquired?
If you know your business has the potential to keep growing, but you cannot grow it yourself anymore, it might be time to talk to an aggregator. They can immediately bolsterer operations, and have all the tools at their disposal to turn your baby into a mature brand. They can improve your listing and branding, open your products to other marketplaces, employ robust marketing, create more product variations, and ensure a more efficient supply chain network.
Of course, different Amazon aggregators have varied business models. Some run every brand they purchase through the same process, but not every business is the same. SellerX, Europe’s leading FBA aggregator, has a different approach. It treats every acquisition uniquely and tailors every purchase and subsequent growth plan. Sellers stay on for at least three months in the onboarding phase. In some cases, former owners are employed for longer. “This is about being customer focused,” explained SellerX CCO, Charles Bernheim. “The creator of the brand knows it better than anyone, and they know their customer base better than anyone. We respect that fact and want to learn everything about their customers so we have the knowledge to grow the brand.”
SellerX’s recipe seems to be working. In just over a year of operations, it is already becoming the buyer of choice for Amazon third-party sellers. It has raised over a quarter of a billion EUR in funding and employs more than 300 people who are the top talents in their fields in four global hubs.
What Makes a Seller Appealing to an Amazon Aggregator?
- Every aggregator will have its own requirements, but there are some baseline aspects that all acquirers will be on the lookout for:
- FBA merchants: Aggregators want sellers that already have Prime status, to avoid navigating logistics.
- Good profits & margins: Many acquirers will require a minimum profit of $200,000/year, with a minimum of 10% margins.
- Low SKU count with high profit: Acquirers want to see that merchants are skilled at producing one kind of item well, or as the old saying goes, quality over quantity. It’s much more appealing to have 3 SKUs and a $1 million dollar net profit than 100 SKUs with the same net profit.
- Good customer base: If a seller already has a strong and loyal customer base, this is a sure sign that they will only blossom more under an acquisition.
- Timeless products: Acquirers are looking for brands that sell items that are always needed, that surpass any specific trends, to really justify buying the storefront. If a merchant is only producing fad items, there is no room for long-term growth, making it unsavory for an aggregator.
Once an aggregator is acquired, how do they scale a business?
Of course, aggregators will have operational differences, but SellerX specifically targets operational efficiency, regional expansion, channel expansion, and product expansion:
SellerX decreases stock outs by increasing order quantities, leading to lower costs of goods sold and improving inventory allocation and management, which will also increase margins. In terms of content and marketing, their goal is to get their acquirees’ a perfect Item Data Quality score for all ASINs and improve SEO/PPC campaigns to generate external traffic. SellerX also uses all Amazon levers across geographies (B2B, SnL, SnS, Coupons, Deals, FBA Exports) and sets up a customer management process to increase reviews.
For EU Sellers, SellerX leverages available VAT numbers to launch in the PAN-EU and expand to all markets, including the Netherlands, Poland, and Sweden. They can also cross-launch EU to US and US to EU to leverage the transfer of review moats.
SellerX can help brands partner with all relevant marketplaces, such as Walmart, Ebay, Bol, Allegro, ManoMano, in addition to expanding BSB channels and leveraging their verticals to present the full portfolio of SellerX to BSB customers (DIY, convenient stores, etc). They can also create websites per vertical or niche markets.
In terms of increasing SKU count, their short-term goal is to launch new product variants to leverage the review moats of key products. Their mid-term objective is to launch new products in non-competitive niches and to complete a brand portfolio outside of Amazon.
What are the benefits of partnering with a tech-enabled 3PL?
Once an aggregator has helped a brand expand to other channels, it’s important for that merchant to partner with a 3PL that can manage multiple demand channels and has good delivery times. Verte, for example, offers Prime-level shipping, allowing Amazon businesses to ensure that their customers are satisfied, regardless of sales avenue.
Moreover, Verte’s technology, such as the Inventory Manager, allows businesses to easily add demand channels and keep track of their inventory on each one. No matter the season, Verte’s software can adapt to spikes in sales and let merchants know when and where those spikes will occur, ahead of those busy times.
Even if you’re an FBA merchant, growing your business means looking outside of Amazon and ensuring that you have support across the board.
Amazon aggregators are the next frontier in the Wild West that is twenty-first century ecommerce. Knowing what acquirers are looking for can help your brand get recognized by one, thus improving your business and bottomline and enabling you to pursue exponential growth.
The goal of SellerX is to accelerate the growth of already great FBA brands and to establish them as the category leaders they aspire to become.
Its approach to brand building is different, brands and customers already exist – by combining strong industry knowhow around the ecommerce space as well as the Amazon marketplace ecosystem, SellerX efficiently streamlines and improves processes. In short, SellerX acquires FBA brands and grows them into awesome everyday consumer brands that people know and love.
The purpose revolves around providing a truly unique and customized experience to both the customers of products and the sellers of each brand that SellerX acquires. The `X` in SellerX represents the unknown, in the sense of which business will be transformed into a brand next?
As of fall 2021, SellerX raised another round of funding- bringing them up to a total of $250m+ – and have opened 4 new locations, hired 300+ employees, and acquired new 30+ brands.