The last phenomenon happend in the company acquisitions world is “The Amazon Seller Acquisition companies”. But what are Amazon Sellers Aggregators and how to be aquired? This is not quite a new kind of business, but it developed in the past few years till boosting a lot in 2020. Investors aquire successful Amazon brands – in exchange of an upfront payment – which sell winning products with the purpose of scale them up. But, let’s have a closer look at how this strategy works.
Most acquisition companies tend to operate through buyouts and offer a revenue-share model with the seller, or sometimes the seller will exit the picture entirely. From there, the company takes full control. What they simply do, is to create a portfolio of the best aquired Amazon seller and manage them. Some acquisition companies make some changes, they put the products under a compliance check to avoisd legal trouble. They can also redesign the packaging, add a new color option to the product, rewrite the listing, or do a professional photoshoot so that the images on Amazon look higher-quality and sometimes sell the products at a lower price. On the other hand the consumer keep looking the same; the name of the original company and the Amazon storefront.
Of course not all seller are eligible to be acquired. One of the main aspect Amazon seller acquisition companies take into consideration is the amount of annual revenue seller generate, which must be between 1 and 5 million Euro. This means you have a considerable market value and presumably you’re so big that your original team of sellers can’t hold the company together. That’s the moment a Amazon seller acquisition company wants to jump in.
As they try to buy top category products, there is one heaping risk factor: Amazon. Sellers and brands constantly fear the impacts of Amazon revamping its algorithms, and how that could change product rankings. The solution they dopt is to create a portfolio of diversified products so that only specific c ategories would be affected by an algorithms change.
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