The Amazon landscape is more complex than you may think. Amazon is no longer just made up of sellers and customers; there is also something known as an Amazon aggregator.
The role of aggregators has and continues to grow in the Amazon landscape, but what is an Amazon aggregator? Read on to find out.
What is an Amazon Aggregator?
Amazon aggregators acquire small Amazon businesses and consolidate them under one umbrella to scale them and grow revenue. They are also known as acquirers or consolidators.
Amazon aggregators tend to be large; professional companies made up of e-commerce, Amazon, SEO, logistics and supply chain experts. They use their connections and expertise to streamline business operations, save costs and grow revenue.
Amazon aggregators have become an integral part of the Amazon landscape, allowing customers to choose from a wide selection of products at an affordable price. This is because aggregators can easily cover business costs and grow small businesses in a way that would not be possible otherwise. They essentially act as investment firms using funds, experience and knowledge to grow small businesses into global brands.
Amazon aggregator firms have a keen eye for selecting the right businesses to drive profit. The theory is that companies can make more money selling a wider range of products under a single entity rather than under multiple different stores. Due to this, aggregators may select businesses that sell complementary products to build a cohesive brand.
For example, an aggregator may try to acquire a company that sells hair care products and another that sells skincare products to consolidate them under one beauty brand.
As a small Amazon business owner, you may be wondering how you can sell your business to an aggregator. Whilst there may be an opportunity to sell, there are certain things aggregators will look for to determine potential.
What are Amazon Aggregators Looking For?
To receive a top-selling price from Amazon aggregators, you need to make your business look attractive. Aggregators must be able to see the potential to grow and make money from your business.
Registered brands are the most attractive to aggregators. These are Amazon businesses that sell private label or self-manufactured products. Those with a high-quality brand are more likely to receive a better sale price.
Think about your brand reputation, consistency, and tone of voice. Is your brand cohesive? Does it represent your products?
Potential and Profitability
The end goal of Amazon aggregators is to make a profit, so it’s no wonder they use previous profit data to determine potential. Aggregators look for an annual profit of around $200K and a profit margin of about 10-15 per cent before they consider buying a business.
They will also look at market data when making their purchase decision. They may look at factors including industry