One of the largest and fastest growing emerging industries in recent years has been the acquisition by aggregators of high-growth potential businesses who either sell through Amazon or use Amazon’s FBA (Fulfilment By Amazon) platform to sell products they design, manufacture and market, which are then packaged and distributed by Amazon.
The aggregators are able to acquire a business with fairly modest profit, safe in the knowledge they can massively reduce the cost of sales and push the marketing – if modest-sized businesses is able to successfully sell the product as a lifestyle business, then aggregating many of these businesses can result in significant profits.
The aggregators are also usually very well-funded. Conservative estimates suggest that there are north of 75 separate aggregator businesses with in excess of $12bn of funding, and those are just the businesses that openly advertise their involvement and funding models.
Further companion businesses have also sprung up around this industry, with brokers and intermediaries both finding target businesses for aggregators, and acquirers for high-growth potential Amazon sellers.
As specialists in the tech and digital sectors, Berwins have advised and assisted various Amazon/FBA businesses, usually on the sale side, and are very well-acquainted with both aggregators and intermediaries, and with the issues involved in these transactions.
We have also developed an innovative pricing structure where acting for sellers, both in this sector and in other corporate transactions, which reduces the risk to sellers and is closely aligned to the nature of the sales, both in structure and sale values.