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AGGREGATOR GOLD RUSH OVER - NOW WHAT?
The gold rush to launch and fund new aggregators has been over for 15 months, but the remaining players are pivoting, maturating or simply surviving.

Last week, Bentigao became the latest aggregator in a long line to declare bankruptcy with liabilities of $50-$100 million. They have 15 brands that sell over 300 products, including health supplements, office products and beauty items.

Earlier this summer SellerX acquired Elevate Brands to create a company with 80 Amazon brands, 40,000 products and a $431 million run rate.

The most famous aggregator, Thrasio, acquired more than 200 brands and raised more than $3.4 billion in funding before radically cutting back with layoffs and the departure of key executives.

Source: The Fortia Group Insights Report - July 2023

This Thursday in London, the eCommerce Acquiror Conference is happening with 20+ aggregators in attendance. Topics include “M&A amongst Aggregators” and “The future of the aggregation space.”

The Fortia Group’s Q2 2023 Quarterly Insights report dives deep into eCommerce brand valuations and is worth a gander.

Quietlght brokerage recently published a blog article called “The Rise and Fall of Amazon Aggregators: What It Means for Your FBA Exit Strategy.”

The article details the swift ascent and decline of Amazon aggregators and its implications for FBA sellers. As Amazon aggregators experienced a sharp increase, especially in 2021, they impacted the valuation of Amazon businesses.

However, the decline in their prominence has brought about challenges and changes in how Amazon business owners should strategize their exits.

Source: The Fortia Group Insights Report - July 2023

• What went wrong for Amazon aggregators:

  • 2022 saw a return to brick-and-mortar shopping, though ecommerce still stayed above pre-pandemic levels.

  • Revenues decreased, competition rose, and Amazon seller fees increased, affecting profitability.

  • Aggregators began layoffs and mergers, and investments in them plummeted to $68 million by May 2023.

   

• What You Need to Know to Successfully Sell Your Amazon Business in the Post-Amazon Aggregator Boom:

  • Amazon business valuation in 2023:

    • Valuations of Amazon businesses have dropped due to changing consumer trends and the retreat of aggregators.

    • Even with decreased valuations, successful exits are still achievable.

  • Who Is Buying Amazon Businesses in 2023?:

    • Despite the decline of aggregators, they only made up 30% of buyers at their peak.

    • Potential buyers include individuals and partnerships, private equity groups, and other businesses.

    • Strategic buyers look for businesses that align with their existing strategies, offering another pool of potential buyers.

• Things You Need to Know to Navigate a Successful Amazon Exit:

  • Now is still a great time to sell: Current valuations are on par with historic standards, waiting for another 2021-like peak may be futile.

  • There is always a market for strong businesses: Focus on internal improvements to make the business more attractive.

  • Know how to position your business correctly: Highlight potential growth opportunities to stand out to potential buyers.

  • Find an experienced advisor and get a valuation: Engage a qualified business advisor to guide through the selling process, from valuation to final transfer.