Are huge marketplace seller aggregators a good thing for Amazon and retail?
Many Amazon Aggregators have arrived in the past couple of years, acquiring third-party Amazon sellers and growing them to an unimaginable extent. These Aggregators receive funds from the biggest investors who believe in them to generate profits.
One of the gigantic leaders of Amazon Aggregators, namely Thrasio, has raised 1 billion US dollars in fresh funding at the valuation of up to 10 billion US dollars. Thrasio buys and scales up the third-party businesses on Amazon and turns them into a strong brand. Currently, Thrasio has around 200 brands in its portfolio. These brands include famous Amazon FBA sellers like Sdara Skincare, Circadian Optics Therapy lamps, and Vybe Percussion massage guns.
With the help of supreme marketing and analytics knowledge, Thrasio claims that the brand under their acquisition witness 30 percent increase in their sales within 2 months. They also promise to enable your business to reach economies of scale.
CEO of Thrasio Josh Silberstein told yahoo finance that when you realize that you are running a business with millions of dollars' worth, a day comes when you know that you need to manage the global supply chain of your business, tremendous marketing efforts, and handling your team, operation and legal action. And to manage the complexity of handling such a huge team is not as easy a task that a group of just three persons can compile.
To tackle your business's management problems of team and operation handling, Amazon Aggregator team experts provide their services. They manage every business operation, and their team of experts offers constructive strategies to strengthen your brand position.
Currently, there are 89 active Amazon Aggregators in the market. These Aggregators are trying to raise revenue for their investors by acquiring potential brands and making them successful. Other top-notch Amazon Aggregators who have raised excessive funds include Perch, Heyday, Boosted Commerce, Razor Group, and Heroes.
The CEO of Branded Ecommerce, Pierre Poignant, stated that their team could provide unmatched marketing operations, ideas of business development, and supply chain experts by partnering with entrepreneurs worldwide to scale their business on Amazon and beyond. These active Amazon Aggregators came up with successful business models and revolutionized the E-commerce platform growth.
Most E-commerce businesses don't have enough capital, tools, and resources to understand the full potential of their brand. The team of Amazon Aggregators has enough capital resources to understand your brand's capability and scale it accordingly. They will break the hurdles of growth that come underway to resist your brand growth.
What else can Amazon Seller Aggregators do in the Amazon and retail marketplace?
Undoubtedly, the rise of Amazon Aggregators has produced some beneficial results for Amazon sellers. Brands acquired by Amazon Aggregators are witnessing immense growth within a few months of their acquisition period. However, some other things must be considered arising due to the rise of Seller Aggregators.
Amazon and retail brands operating on their own are facing intense competition due to the rise of these Aggregators. Independent brands don't have enough financial resources to compete with brands acquired by Amazon Aggregators.
Aggregators are heavily funded by their investors, and they reinvest this money on their acquired brands to scale them and create revenue streams. Independent brands reinvest their profits on their brand marketing and upgrading their products. It takes so long for these independent sellers to develop a strong brand position. However, brands under Amazon Aggregators feel strong growth in the short term.
Hence, these independent sellers can face competition and may lose market share if Amazon Aggregators acquire more potential brands.
What can be done under this condition?
It is said that "if you can't beat them, join them." Suppose you cannot compete with businesses acquired by huge Amazon Aggregators, then you can sell Amazon business to these Aggregators. If they see the capability and potential in your brand, they will acquire it.
However, there are certain requirements of Amazon Aggregators to acquire your brand. The essential points that they value are:
- They are looking for registered brands operating under Amazon FBA Private label or self-manufacturers of their products.
- Prefer FBA business to avoid dealing with supply chain problems.
- Amazon aggregators look for a business generating annual net profits of 200k US dollars to 500k US dollars. In addition, there should be a minimum of 15 percent net margins.
- A business having few SKUs but a higher margin of revenues.
- Another factor is sales through Amazon. Some Amazon aggregators will demand a minimum of 80 percent sales through Amazon, while few will ask for 30 percent. It all depends upon the acquirer.
- Loyal customer base.
- They are looking for niche products that match their expertise.
- The business should promise long-term growth that cannot be a fad.
Or, if you don't want to hand over your business to Amazon Aggregators, you can scale it yourself by applying innovative strategies. You can use the latest SaaS tools to effectively manage your inventory, pricing, and team. Doing it on your own will enhance your marketing skills and make you more competitive to sustain market competition.
Amazon Aggregators became a fundamental part of the Amazon world because of their potential strategies to elevate brands. They have generated huge funds through their investors and acquired potential brands. Aggregators scale these brands and expand them globally. The leading players like Thrasio, Perch, and Heyday have scaled up hundreds of brands through their marketing experts’ team, tools and investment.
They have also created an environment of competition in the Amazon world. Independent sellers can collide with them if their business stands on their expectations. Otherwise, as an Amazon seller, you can scale your brand by purchasing the latest SaaS tools for business automation growth. They will make your business able to stand against your competitors.