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What is an Amazon FBA Aggregator?

Feb 21

You may observe the Amazon ecosystem quite simply on the surface: sellers and vendors selling their products and services on the international E-commerce platform to global online shoppers. However, this Amazon world includes much more than just sellers, vendors, and customers. 

The origin of Amazon Aggregators is another significant addition to the ecosystem of Amazon. These companies became major players not only in Amazon cosmos but also in the general E-commerce sector. 

Knowing about Amazon Aggregators 

Amazon Aggregators look for small businesses both off and on Amazon to acquire and scale for generating revenue. Aggregators are becoming an essential part of the Amazon ecosystem. They enable the acquired Amazon brands to offer products at the best possible prices and gain instant market share that wouldn't be possible on their own. 

They provide excessive funding to the acquired businesses for making these brands profitable and successful that can even expand globally. 

Amazon Aggregators have a lot of funds provided by their investors to acquire brands. They do smart work with the availability of E-commerce experts and the brightest minds in the industry to scale brands and make buying decisions. They use data and their marketing and logistics knowledge to drive revenue and scale small businesses. 

Top Aggregators in the market prove their expertise by turning the acquired brands into global businesses. The experts of these Aggregator companies select the right businesses through their SEO and Amazon knowledge and experience. 

What are Aggregators looking for?

Aggregators will not just only buy small Amazon businesses intending to generate profits. They completely analyze the purchasing process by ensuring that the acquired business will be successful and have the potential to generate profits for the long term. 

Mostly, Aggregators purchase Amazon third-party sellers to expand them within the Amazon ecosystem. Their goal is to use Amazon as an initial point for growing their business. The huge customer base of Amazon and their international access provides a solid foundation for businesses for massive expansion under the wing of Amazon Aggregators. 

Aggregators go through many steps in determining valuable business vs. those businesses having much potential but will hit the ceiling after a few months. Aggregators receiving billions of dollars from the world's biggest investors ensure that they don't invest in those businesses that could disappear after a few months of acquisition. 

It's easy to think of investing in small popular brands, but aggregators look for the steadiest and solid small businesses rather than those selling fad-products. 

Aggregators use different tools in combination with the trained eyes of employees that enable them to acquire the best-qualified businesses. They completely go through in detail procedures from scanning reviews to the examination of trademark registers and anything that indicates violations of Amazon terms and conditions. After this procedure, they will acquire that business having the greatest potential. 

For receiving the highest price for your Amazon business, you need to know what aggregators value the most. 

Registered Brands 

Amazon Aggregators are generally looking for sellers having their own Amazon FBA private label merchandise or manufacturing their products. 

Profitability 

Under this category, your profit-making ratios are under consideration. Every aggregator has its own requirements regarding profitability. Most of them want to see annual net profits of 200k US dollars annually from your business. 

The next step Aggregators will look for is profit margins. Most of them will demand at least 15 percent. 

Number of SKUs

Aggregators will never be attracted with more SKUs and fewer revenues. They will emphasize that business generates 1 million US dollars in revenue through only four to five SKUs than 1 million US dollars in sales generated through 50 SKUs. 

Sales Percentage places through Amazon. 

Amazon sellers can benefit from selling their products across multiple platforms like eBay and Walmart. That's not bad at all. However, Aggregators are interested in the percentage of orders specifically generated through Amazon. 

75 percent of the sales generated through Amazon is the requirement of some aggregators, while others can demand 30 percent. 

Demand of products 

Amazon Aggregators will not go for those businesses that incorporate seasonal or fad products that can lose their demand after some time. They are looking for those products having consistent and long-term demand. 

Loyalty of customers 

A loyal customers base is what matters most for any business success. The more you have a loyal customer base, the more you will have bargaining power. 

Niche 

Most of the aggregators are looking for specific businesses to scale and grow. They look for specific and niche products that match their expertise. 

Fulfilled by Amazon

Amazon Aggregators prefer FBA businesses. It is because they don’t have to deal with supply chain management issues. Moreover, Aggregators want to be qualified for Prime status that is easy to achieve in FBA business. 

Following Terms and Conditions 

Amazon has the right to deactivate those accounts that are going against their terms and conditions. So, Aggregators are looking for businesses following Amazon terms and conditions within their operational journey. 

Location 

Almost all of Amazon's biggest sellers are selling within the US market. However, some of them have also expanded their markets internationally. 

Aggregators are happy to acquire those brands selling in multiple marketplaces and enjoying a good brand reputation. If you have a good customer base outside the USA and run a strong brand, Amazon Aggregators can acquire your business. 

The above mentioned are the list of important points that Aggregators will demand while buying your Amazon business. So, you much adhere to these points. 

Conclusion

Amazon Aggregators have brought a revolution in the world of Amazon. They invest in potential Amazon businesses to scale them and turn to global brands. Aggregators have excessive financial funds provided by their investors, and they use them to acquire brands, scale them, and generate profits for their investors. However, there are a few requirements that you must adhere to get your Amazon business acquired by Aggregators, which are enlisted in this article.