Amazon FBA Aggregators & RollupsApril 9, 2021 in Blog
As the ecommerce business is booming, also many acquisition companies have emerged.
In this article, we’ll examine what an FBA aggregator is (also known as an FBA rollup), what they are looking for and a list of all of the FBA aggregators out there.
Related Listening: Episode 364: The Controversy Behind the FBA Rollup Strategy
Institutional Buyers of Amazon FBA Ecommerce Businesses
There are countless rollups out there but we’ve compiled a list of some of the most popular Amazon FBA Rollups in a spreadsheet:
What’s an FBA Aggregator?
FBA Aggregators or Rollups are a group of investors that are interested in buying tons of Amazon FBA businesses willing to both exploit economies of scale by bringing them all together and also capitalizing on low selling multiples.
Entrepreneurs have always talked of selling their e-commerce company at some point in their business journey. If you don’t know how to start we recommend you to read our guide on How to Sell Your Ecommerce Company For Top Dollar.
When you decide to sell your business, you might be surprised how many investors are willing to pay you a good amount of money in exchange for your business, such as FBA rollups or eCommerce rollups.
What are Amazon FBA Business Acquirers Looking for?
Lately, acquisition companies have started buying up Amazon third-party storefronts with the purpose of building lucrative portfolio businesses and with the goal of growing them to the next level.
Each Amazon FBA Business Acquirers has its own criteria, but there are some general requirements that everyone will have to follow, such as:
- Private Labeled Products: You sell your own branded products – most rollups aren’t looking for retail arbitragers or drop shippers.
- Brand Registry: You have registered under Brand Registry your trademarks, i.e. you have a defensible brand.
- Sales: depending on the acquirer, but some will ask you a minimum of 80% of sales through Amazon and some others will ask you a minimum of 30%. It’s one case where diversification isn’t always a selling point.
- Margins: Will depend on each acquirer, some will require a minimum of 15% net margins and some will be agreed with 10% net margins, but definitely not lower.
- Amazon Fulfilment (FBA): Many sellers are still merchant fulfilled but the majority of rollups are looking to avoid brands that rely on in-house logistics. Being part of the Fulfilled by Amazon program will be one of the strong points of valuation since most of the acquirers don’t want to deal with logistics services and because of the simple reason that your product/s will have Prime status.
- No Black Hat Tactics: If you have made a deal with the devil that may result in the deactivation of your account, no acquirers will want to have to do with it.
- Not a fad: acquirers want a forward-looking business, nothing short-lived. Acquirers are looking for businesses and products that have a great scope that sells today and tomorrow.
Have you sold your ecommerce business to any Amazon FBA acquirer? How was your experience? Tell us about it in the comments section below.