All You Need To Know About Amazon FBA Aggregators

Amazon FBA Aggregators - What Are They, How To Cope With Them, And How To Profit With Them

Hey, guys! 

In this article, we will be talking about Amazon FBA Aggregators and all you need to know about them.

A few things that you will learn in this article are;

1 - What is an Amazon FBA Aggregator

2 - Why it is necessary for you to know about them

3 - How you can work with them

4 - How to compete with them

5 - And a bunch of other stuff about Amazon FBA Aggregators. 

Curious to know who will be with us today?

Well, today, I will have guys from the Accel Club who are accomplished Amazon FBA aggregators themselves.

My guests are Klim Sotnikov and Nick Tuzenko, and I’m sure it’s going to be a very interesting conversation here.

A storm of information is about to strike this blog, so buckle up, guys!

I strongly recommend those interested in Amazon aggregation listen to whatever these two gentlemen have to say.

It will be enormously beneficial for you if you're readying yourself to sell on Amazon.

Now, before I bring my guests in, let me put in a few words for myself about why I do what I do.

My name is Vova Even, I am an active Amazon seller, having been selling since 2016.

I sell because it's my passion and because it allows me to explore my other passions, like traveling, meeting new people, etc.

Besides that, I also offer my Amazon FBA courses on Udemy, which now has hundreds of students across the globe.

As a content creator, I create tutorials and reviews of important tools for Amazon sellers and share them on my YouTube channel.

I have recently started creating YouTube shorts as well, so I am certain you will enjoy them too!

So, that’s me. Now let’s hear from our guests.

Guys, Nick and Klim, can you introduce yourselves to our readers, please?

Nick: Sure, Vova! First of all, thank you for this opportunity to converse with your readers here.

Hey, guys. I hope you are doing great in your life.

My name is Nick, and I'm one of the co-founders of Accel Club.

We started a year ago in the Amazon aggregators space.

Klim is our Business Development Manager and is helping us to grow our business rapidly.

As far as Amazon FBA aggregators are concerned, I could not emphasize more on its significance.

It's really essential for every Amazon seller today to know what's aggregator because Amazon's changing a lot and, with these changes, is bringing tremendous opportunities.

In the last few years, a total of 100 different Amazon aggregators entered the field, which has changed the landscape, competition, and all the opportunities and risks that you have in this space.

That’s why, as Vova pointed out, it's really important to know the role of an Amazon aggregator, and we are excited to talk about our experience, the competition, and the space overall and will share our insights. We will also share some tips that will help you run your business.

Let me provide you with a little timeline of the contents we are going to talk about today.

Starting from our introduction, we will share our thoughts on why you should know about aggregators.

Plus, we will tell you what it means for your business and if you can really benefit from it at all or not. 

Besides that, we will talk about when it's the right time to exit your business and sell it to an Amazon aggregator.

In this conversation, you will find out how to prepare your business for the exit, what are standard and exit terms are, and what the process looks like.

Vova: That’s cool. I can tell you I find myself excited too to know about these things.

But before we proceed, can you please elaborate more to our readers on what is an Amazon FBA Aggregator?

I am sure many of us keep hearing ‘aggregator’ again and again, but it would be great if you could explain more about the term itself.

What Is An FBA Amazon Aggregator?

Nick: I will give a simple example to understand what aggregator means.

I am sure everyone here would know the role of the customer in a business.

He’s the one who buys from you, and as a result, you earn money.

So basically, a customer itself is an aggregator.

Similarly, Uber, or any other online service application that provides similar services, is also, to some extent, an aggregator. 

However, in the Amazon space, there is little change in the scope of aggregators.

Here, the aggregators don’t buy services or products that you offer; they buy the entire business.

FBA Aggregators or Amazon Aggregators are the companies that do rollups.

Amazon aggregators buy successful Amazon-certified sellers to build their portfolio of brands and products.

They do not launch them but do business like M&A strategies.

They buy from all – from the smallest sellers to the biggest ones in the marketplace – to create their own portfolio of products and brands.

Therefore, that’s the reason they are called aggregators, they aggregate in the much-fragmented market and Amazon space. 

Vova: So, to put it in simple words, they take existing businesses on Amazon in different niches and categories, and then they grow them by themselves? 

Nick: That’s spot-on, Vova! 

Vova: I see! That’s very interesting indeed.

So to put it simply, aggregators offer their experience and talent to established sellers, saying that if they sell their business to them, aggregators will grow them to new heights.

Nick: Yeah, and if you are curious to know how it works, let me explain.

There are certain measures we take before buying a business.

For instance, when you have a business with a high number of SKUs, you can operate them much more smoothly only when you have enough talents or tools.

You need to have some processes in place because the more SKUs you have, the more workforce you will need to operate your entity.

However, you can only do that smartly if you have some experience in building businesses.

You must have economies of scale, efficient logistics, and marketing.

Only then will you be able to attract better talents and invest in your own software, or in any other stuff that you need to invest in, in order to expand your business.

Now, that’s something small sellers cannot do because they are bound by some financial restrictions.

When you have that ability, you can invest and grow your acquired portfolio faster.

You can even launch your products in new countries and open new channels.

Today, a lot of industry professionals know that external traffic really matters, and sellers need to take that into consideration.

They can easily generate traffic from TikTok, Instagram, Pinterest, and Facebook via different strategies like the latest news, giveaways, etc. 

Also, launching new products is also not as easy as it was two years ago.

Amazon space, like any other market in the world, is getting more and more mature.

And as that maturity is going on, you need to have more sophisticated processes and talents to really succeed in the marketplace.

Therefore, that’s the reason we believe in the significance of Amazon aggregators.

There are now around 100 different players in this space across the world, but we know that 80% of them will not be successful.

Maybe 10 or 20 of the aggregators will stay and perhaps will succeed, but 80 of them will be bankrupt or will default.

Those 10 or 20 aggregators that will survive will really have all the opportunities to succeed because, as I said, Amazon is getting more mature and sophisticated, and to succeed in that, you will need some extraordinary efforts. 

What is Accel Club?

Let’s now talk about Accel Club.

We are originally from a CIS background and operate from Ukraine.

All our companies are structured in the US, so it would be better to say that when we make the deals, we are more recognized as a US company.

Before the Accel Club, me and my partner Max, who has now become CEO, had some great e-com experiences.

I used to work at Busfor, the largest bus ticketing marketplace in Eastern Europe.

Then we were acquired by BlaBlaCar, which is a French unicorn with a revenue of 100 million euros. 

After that, Max built the food delivery company, the biggest one in the CIS, which is now worth one billion.

Hence, we had great success in building marketplaces on our own.

I know the startups I mentioned above mostly fall into the e-commerce category, which is different from Amazon, but there are definitely some similarities.

It was a year ago when we joined forces and believed that we could build something great here on Amazon as well, given our operational experience and our skills to build great teams and tools.

Obviously, being here and doing something in this space requires you to attract a lot of funding, which is also something, we believe, we can, and have successfully achieved.

At the moment, we are young and passionate, and we've done some deals, and we are right now in the top 500 Amazon sellers.

We haven’t launched our product as of yet, but we counted the best sellers for the products that we acquired and grew exponentially.

That’s why it’s convenient for sellers/businesses to talk to us because we know all the stuff going on in this space really very well, and also because we are not just financial guys or investment bankers.

We are sellers ourselves.

We know all the issues and opportunities that are in the marketplace.

We have a team of 100 people, mainly in CIS, that is simultaneously operating from Amsterdam, China, and the US.

So, that’s our introduction.

I will return to what we are at the end of our discussion with answers to questions like why Accel Club, and why should you work with us, and more about us.

But let’s just talk about the Amazon aggregators space to understand it completely.

It is essential that we know what Amazon aggregators are and why Amazon sellers should know about them.

And also, more importantly, why are we talking about it right now? I have tried to talk about the basics above, but let's go further into the topic. 

Do you know that around 10-11 billion dollars were invested in this space in the previous two years?

This fact validates the significance of this fast-emerging space and makes it important for everyone to understand its dynamics.

Two billion dollars is a huge chunk of money, and it sends us a message to take Amazon aggregators as a serious business. 

Currently, in the world, there are two of the biggest investment fears; the first one is dark stores.

They are based on assets worth 20 billion dollars and comprise delivery services or other similar kinds of businesses.

And the second fear is everyone is buying Amazon businesses.

People often wonder why it is happening, and the simplest answer is there's a shift from offline to online markets, which has been going on at a slow pace for the past few years.

The COVID-19 pandemic specifically provided it a much-needed boost, and 2020 year proved to be a golden one in the context of the market switch.

There was much more infusion of capital because customers preferred sitting at home and doing online shopping rather than going outside and risking their lives.

This aspect of the pandemic era attracted the attention of investors who were estimating the online market to be worth 10 billion dollars at the time.

Hence, there is around two and three billion of equity money.

If this is the chunk the investment companies will get to invest their stake in the company, they will take that capital to use for investments.

And 70% means $7 billion, which is like credit money and not like academia.

All the aggregators usually have their funding and credit line or credit money, which means they need to pay some interest payments on those credits.

That is why it's very important to understand it because it also gives more understanding of what the prices could be and how aggregators usually work.

Let me present you a graph for some important stats and what I tried to explain above:

Kilm: What's worth noticing here in this graph is it was made a few months ago.

It's already outdated, but you can see how passionately aggregators are raising billions of dollars.

That’s really awesome!

Talk to Accel Club here

Nick: Thanks, Kilm, for your important input.

It's really interesting to compare that with the size of the market.

I guess everyone knows that Amazon itself generates around $500 billion a year, so 10 billion on that scale doesn't look strange.

But definitely, this is something in absolute numbers and proves that we're really big.

This is why when everyone's asking us, “Guys, there shouldn't be a high inflation in the prices.”

So every seller wonders, just like us, that if there's 10 billion invested, why pricing has to go through the roof?

A 10 billion raise is like 10X or 20X because this 10 billion in the overall space, compared to the 500 billion of Amazon, is only 5% of the overall market.

So it isn't that much, even though the absolute number looks enormous.

If you compare that to the size of the space and take that into account, like definite prices that you can get as the seller is growing, the business will prove more and more beneficial for you.

They are not like 3X or 10X, which they were two years ago. It can be even more than $10 billion! 

So, what are your options here right now?

What we believe is you only have three options; ignore, compete, or exit.

There are around 100 different teams that are searching for great brands to buy, including us, and you can always sell your business at any time to Accel Club or to any other aggregator.

Undoubtedly, the Accel Club would be a better option for you, but I will come on that later.

The other option would be for you to ignore them, or you can choose to compete with them.

I believe in the fast-changing e-commerce landscape, you cannot ignore aggregators completely.

Exiting would also be a bad option, and you will only be left with competing.

Why do I believe that, eventually, you will be competing with Amazon aggregators?

Because we are analyzing all the niches bi-weekly and seeing how deeply the aggregators are in different niches.

There is rarely any niche where you won’t find an aggregator. 

As I said earlier, we are also sellers, so we definitely know that great competition is coming from China.

But other parts of the world aren’t way too behind.

Whether it's Europe, Asia, or any other part of the world, you will have aggregators almost everywhere now. 

So, from the three options that I told you, when exactly do you need to ignore Amazon aggregators?

I believe you should ignore considering Amazon aggregators when you are a small business, making less than one million in annual sales.

You don’t need to worry that much about it. 

Why?

Because right now, we and other aggregators are more focused on bigger niches and sellers and are looking for a big market share.

If you are small enough, you can easily work there, run and grow your business and there is enough space in the marketplace for you to grow. 

However, if you have a business worth two, five, or ten million annually, you are definitely going on the radar, and you are already competing either by price, product, or any other metrics with aggregators.

So, as I said in the beginning, there are two parts of the funding coming from aggregators.

The first part is equity, and the second part is credits.

This means that all aggregators have push and pressure from the investors to make earnings, EBITDA, and margins.  

Hence, it isn’t easy, sometimes, for us to focus on and target market share or revenue.

We do that in the mid-term, but in the long-term, we are more interested in increasing revenue and market share than targeting short-term earnings, EBITDA, and short-term margin. 

You can see aggregators everywhere, anytime.

But how can you know them upon seeing them?

Let me tell you.

Usually, all the aggregators use the same address for all their sellers and brands.

So we can easily see if they are from New York, Delaware, or any other state.

This way, it is easy to know and understand what your position is and who you are competing with.

If you see an aggregator in your niche, you need to understand that there can be pressure by price or by targeting more revenue and market share.

Moreover, you need to be smarter in your competition, i.e., guessing what is the biggest challenge for aggregators and for you.

You can scale creativity when you have thousands of different products and when you are a small seller and have one million in sales and 20 SKUs.

You can care about each SKU proportionally and also about the customer.

But when you have 20,000 SKUs, it is not easy to care about each SKU and scale the founder’s vision and creativity all across thousands of SKUs. 

That is how you can compete and be more entrepreneurial and customized in terms of your package, marketing ideas, and some touch that you can create with the customer.

It is harder to do any inserts of giveaways.

However, if you are talking about external drives without anything else, you can easily compete this way because all the aggregators can’t pay much attention to the details in every business, but you can.

Because you have that ability and opportunity which you can use in your favor. 

Vova: Nick, if I have understood it right, you mean to say that aggregators are not primarily interested in small niches where sellers are enjoying their time making some money.

Aggregators are more interested in bigger markets where they can enter and scale these markets to a higher level.

It is because you have funds, knowledge, and experience and have all the other resources at your disposal to grow businesses. 

Aggregators usually have more money than regular sellers, whose income might go up to seven or eight figures, but aggregators have more capital than that which allows them to compete.

It’s not like small sellers can never compete, but it will be really harder for them if they are making five million in a year in big niches where there’s room to compete.

Also, they lack knowledge which is another reason they might not be a perfect fit for competition in bigger niches.

Successful and competitive sellers like you are more interested in bigger markets because you have the capital to grow them faster. 

Talk to Accel Club here

Nick: Yeah, absolutely, Vova! It's very easy to understand what we can bring.

We can bring a more systematic approach to the business.

We have a team in China, which is something other sellers don’t have.

It works when you have a scale and gives you more opportunities to manage your disk efficiently, build some software, have Chinese guys on your team, and work closely with manufacturers.

However, what we're definitely missing is very micro details in the business and also maybe some micro niches, which definitely exist there because customers with the Amazon marketplace are willing to have a more customized market.

There are always some small niches where opportunity definitely stays.

And if you are there and if you love doing that, this is a great time to do that even more.

Because as I said earlier, more systematic players are missing the opportunities.

So, you can definitely ignore, compete, and exit for the reasons I have explained in the paragraphs above.

If you feel like you are small and do not fit the competition, you can simply ignore or exit. 

But here, I would like to talk about exiting.

As I said before, just like a summary, there are a lot of aggregators who are trying to build what we are.

We are building our strategy on buying great and successful sellers who have at least $10 million in annual sales.

This size is our sweet spot, and this is what we really want.

We can go up to a $20 million seller, but we will not prefer a seller who is selling less than one million in a year.

We need some traction and size, and if you have these things in your business, you can easily sell that.

Another biggest question is, what's the right time to sell your business?

This question always lurks in the minds of Amazon entrepreneurs, and we know it because we have been through that phase as well.

And please don’t feel confused because this is a completely valid and right question.

And the answer is yes, we do believe that there is always a right time for selling your business. 

Every business has different stages, such as launching, growth, maturity, and decline.

In order to find the right time, you somehow need to assess whether you are in the maturity stage or in any other.

This is probably easier for you than us because we need to understand how we will bring this business to another height.

But assessing the stage of your business is something that you would have to do by yourself.

Once you assess and find that your business is in the maturity phase, it's a great time to sell it.

Because a business with good health will give you more income.

The buyers have different preferences.

We at Accel Club are trying to incorporate that in terms, but a lot of buyers will not do the same.

They would say, “The size of the business right now is not up to par,” or you would hear something similar to that.

So, to make it easier, one of the criteria for you should be to find the phase your business is currently in.

If you are certain your business is mature, I would suggest going ahead and selling it confidently.

Besides that, as I mentioned at the start since Amazon is getting more and more sophisticated and since you are increasing in volume from two, three, or five billion, you need to operate as a CEO and not only a founder or seller.

Just as CEOs have teams, you will need to have one as well.

You will need to understand how to work with external service providers, and how to build processes since Amazon is maturing, and you will need cutting-edge tools and sophisticated approaches.

So in order to carry out these approaches, you will need to create talents and have a proactive team with great tools.

And I believe it can only be possible when you consider yourself a Chief Executive Officer (CEO) and not a founder.

There are a lot of entrepreneurs who don’t like it.

They don’t like to invest in people and gather a team of professionals.

They say it's more corporate work than real entrepreneurship. 

Therefore, we believe that if you don’t like teamwork, you need to think about exit because, with a team, talent, funnel, and hiring professional who would help you build the processes, it really would be harder for you to succeed on Amazon, just like any niche that is getting more and more mature.

Even if you are at the maturity phase but don’t want to take the rough road of entrepreneurship, there is no harm in exiting.

Because when you don’t know something, that’s not a problem at all, and if you haven’t got any talents, that’s entirely normal.

The biggest problem is when you don’t have the energy to be a CEO.

If you don’t feel it is right, just don’t do it.

Consider it a great moment to think about exiting.

And it’s really cool that in the Amazon space, you get the opportunity to sell that business.

This is not the case with other businesses.

It's really great that you worked on your Amazon business for one, two, or three years but then realized that you could not give it enough attention, so you told yourself, enough is enough, I will sell my business now. And that will be it.  

Vova: Okay, so just to sum it up, and to see if I have understood it right, the best time to sell is when your business is in the maturity stage.

I would say from my experience of selling my products that if a product is earning a revenue of $20,000 per month but it doesn’t go further than that, it is an appropriate time to exit.

We increase the revenue by working on our external traffic and using many other tactics.

But I believe that a product that earns $20,000 can be called a matured product, partly because it's not declining as well. 

So, before it starts declining, which is almost inevitable no matter what business you do, it will be great if you think of selling it.

As per my experience, if you are an Amazon seller or Amazon entrepreneur, you usually get to the stage where you have to build a team because you can’t do it alone anymore.

Even if you have a shared business or work with a partner, you will definitely need a team.

But if you don’t feel ready for it, or maybe you just don’t want to become a CEO and take on responsibilities such as hiring a team and managing more people, you can simply exit.

I understand because it feels like dragging yourself back to the corporate world, which might be the reason you joined Amazon in the first place.

If you are having an ideal life and if you are earning millions every year, just keep on doing that.

Did I say it right, Nick?

Nick: You are absolutely right, Vova! What we usually try to do is talk to hundreds of sellers monthly and try to understand whether they would really like to exit.

It works really well because we all are aligned and understand each other.

It helps to properly negotiate terms for exiting and just go for it. And we don’t really compel sellers to exit.

Sometimes, you tell them straightforwardly that we don’t think you are ready to sell, so you don’t have to ponder on it.

We tell them that we can help on terms or on anything else where they do need some help, but we convey it to them clearly that it is not the right time for them to exit.

We tell them to stay with whatever they are doing, try to grow a bit further, and implement all the great ideas that they have because we feel that you are really excited about that.

So, we insist that they should just keep on doing that, and when they feel ready to sell, we will be just one message away.

It is important to hear that from a seller because it works perfectly then.

How To Prepare Your Business For Exit?

Put Your Trademark Registration, IP Rights, And Patents In Order

Let’s now talk about terms that I believe are something really very interesting for sellers.

I will be explaining terms in the context of how to prepare your business for exit.

If you believe that you are somehow approaching a plateau or just feel like concentrating on something else in your life, there is definitely some professional hygiene that needs to be in place.

That is something that will increase your terms and valuation, so there shouldn’t be any problem with IP rights, trademark applications, and IP infringements.

It’s hard to have your trademark registered in China because, usually, all the trademarks are out on a register in China.

But if you are selling, you can definitely register with USPTO, which will certainly put you in a good place.

Talk to Accel Club here

Increase Profitability (Size, Margin, And Growth)

The second thing is if you understand that you would like to sell, you just try to work on your profitability.

You cannot possibly increase it exponentially in a short period, but there should be a growth of at least 10 or 15%.

If you have 18% of the margin, you can easily make it 20% with some PPC optimization and packaging optimization.

It’s more like a fulfillment optimization, 3PL with logistics.

Just try to focus on that, and you will see some improvement. 

But we've seen a few sellers among thousands that can't make that 10 or 15% increase in profitability.

So if you focus on that, it will work out, and it definitely will increase your valuation because profitability really matters for any buyers and for us, especially. 

Focus On Hero SKUs, And On Specific Categories

If you have finally decided to sell within a period of half a year, you should focus on your Hero SKUs.

These are some of the very important assets in your business.

So try to work and focus on them because any seller or buyer would definitely be happy if you have a higher number of Hero SKUs.

The Amazon aggregators will offer you more money if you have at least five Hero SKUs with the same numbers. 

Concentrate On Amazon

If you believe that you will be exiting in half a year or in several quarters, you should definitely concentrate on Amazon.

It's better to sell to the aggregators rather than saying, “Guys, you have an opportunity with Walmart, Shopify, or you have an opportunity with any other than these platforms.”

You can have Shopify and Walmart in place, but for us, it’s Amazon that matters.

So only concentrate on Amazon. 

Focus On Growing Your Brand In The US Market

This also is necessary as the US is the biggest, deepest market in the world.

There is no grant, for example, in France with the same market, in the same numbers, that would be valid as it was in the US.

So, the US market is always the biggest and more favorable one. 

Maintain Account Health

Maintaining your account health is also very important for any buyer.

We are investing, and we're giving you cash today and hope that we will return that in several years, so any significant risks with Amazon account health are definitely a concern for us.

Automate And Simplify

Automating and simplifying your business will definitely make any buyer tempted to buy.

Any buyer would like to have a less sophisticated business in place rather than a more sophisticated business. 

Keep Track Of All Your Records

What's very important is to make sure that you have all your P&L and all your records in place so we can easily track your expenses and all other important aspects.

It really helps us to assess the business and then validate that the assessment is correct and go to the due diligence and the execution of the As Per Paper (APA) to make the deal. 

So, that’s it for now.

Vova, do you have something to add to it?

Vova: Well, I don’t think that I have anything to add to it because you have meticulously explained everything.

Conclusion Of This Part

I just want to sum up everything because, after such a comprehensive and intelligent part, it is important to give the audience a quick summary of whatever we discussed.

Nick, please correct me wherever you find me wrong. 

So, the main topic was how to prepare a business for the exit, and if we want to sell our business, what steps we should take.

It is important to do that so that we can come to the aggregator ready, sell faster, and get more money.

And, I guess, that's what buyers would want too.

You guys want to do it faster and technically pay more because it's worth more.

And we, the sellers, want to get more and sell it faster because we want to make a bit more money, so everybody wins. 

So I got everything from trademarks, patents, and not infringing the taxes and all that stuff.

I don’t think that would be too perplexing for people.

And then comes profitability which, if you can increase it a little bit, will strengthen your business.

As Nick mentioned, you can do that by improving a little bit of PPC.

You can hire someone or just lower your prices by hiring a sourcing agent.

You can, and I think everybody can increase the growth, at least to, as you mentioned, 10-15%.

Then if you have a few Hero SKUs, the ones that are doing very well, that will be best for you.

It's better to have a few rather than have hundreds of little ones.

SKUs are all around that generate the same profit. The fewer SKUs are quite easier to manage.

That's true, and I agree with Nick on that. 

And I also agree with Concentrate on Amazon's point.

If you have any other ways of getting some profits from Shopify and Walmart, it's pretty cool, but you want to work on Amazon because it is the main one.

However, if you have others, that will be good as well.

But you have to have Amazon as your primary, strongest revenue, and profit-generating machine. 

Sellers should focus on growing their brand in the US.

If you have the brand in the US, that's great because the US is the strongest market for Amazon.

Also, you should focus on maintaining account health and avoiding manipulations.

Automated and simplified processes should also be your priority, so put automation in place; it really helps.

And kind advice: You just take it easy and start working on it, and everything will turn out just the way you want it to be.  

By the way, I have a good book recommendation for all of you guys.

It is “Built to Sell” by John Warrillow.

It’s one of the good reads that I have gone through so far. It is a little story of somebody who wants to sell his business.

He goes everywhere but fails to sell. His business is not automated and systemized.

He then talks to a mentor.

Oh… I guess I am spoiling it too much for you, so I will stop.

But it is a worthwhile book, and I recommend all of you to read it.

Nick also mentioned keeping track of all your records because you will definitely need it to validate your ownership.

He briefly explained all the points in a very easy way.

Good work, Nick!

I'd also like to share with you a cool checklist for buying a small business (it definitely applies to Amazon businesses).

The article is by Gal Barzilay, COO at boosst, boosst can help you buy or sell your small (or bigger) business.

If you'd ever want to work with boosst, use promotional code VOVA_VIP while signing up, it will grant you:

- a free valuation of your Amazon business.

- A 30-minute call with an eCommerce acquistion expert

- A 1-month free trial on boosst's platform

Good luck :)

Standard Business Exit Process

Nick: Thanks, Vova, for summing it up!

Now, let’s go to the process and how does it look like. 

Just as with any aggregator, there's an assessment stage.

In this part, we introduce ourselves and try to get to know who we are dealing with.

We try to extract as much information from sellers as possible.

Then, if the interested party wants to continue with the process, we sign an NDA.

As like everywhere else, the NDA here means that we will not share sensitive information with anyone else, and also that we are willing to buy from you, and that you are willing to sell to us based on the information that you provided.

We particularly decide the terms of our deal at this stage.

Then comes the due diligence part.

It’s really the most important part for us, and we do it really fast.

That’s why we are one of the best in this business.

In this stage, we need to make sure that the information provided by you is correct because it will help us assess your business on the right numbers.

And with Amazon, it's really easy because, except for the cost of goods sold, we can pull everything from Amazon.

We make the process really easy and painless.

The entire process is completed within two or three weeks, and in that time, our main focus is validating the cost of goods sold because such information is not available on Amazon; hence, we need to make sure the information provided by you is correct.

After that, we will check if your Amazon health is good or not.

We judge that on the basis of the cost of goods sold; that estimate will give us enough information to decide if your business is healthy enough for us to buy.

There’s nothing more to this process; we get the rest of the information from Amazon itself because it's really easy to check.

Usually, after one week of due diligence, we start the integration part.

We start taking customer support letters from the seller and everything else that he or she might need help with the integration part.

For us, it is not the due diligence part but it's more like the integration part.

Usually, within a maximum time period of two weeks, you will already start seeing that everything is good.

You will have all the papers on your side, which we made during the Asset Purchase Agreement (APA).

Yes, it is asset purchasing because we are not buying your entity; we are only buying assets.

We are buying your trademark, stock, and Amazon account.

That’s why it is an Asset Purchase Agreement and not a Stock Purchase Agreement or Entity Purchase Agreement.

It was an important point, so I thought I would clarify it.

You will have the papers of agreement on your side within a few months.

You will go through these papers and see if there are some amendments that you would like to make.

After you agree with all the terms of the agreement, we sign the document, and that’s it.

In the next three or four weeks, you will get your money, and we will get your account, or say business, and we will start working to grow it further from the first day!

Vova: Great, and getting everything done within a few weeks is only possible if a seller comes fully prepared for you, as you have mentioned above.

Talk to Accel Club here

Nick: Yes, that’s right, Vova.

In the first week, we do the introductions and try to assess if the business is healthy enough to buy.

And then, in the next three to four weeks, we wrap up the entire process.

The seller gets their money, and we get the account.

It’s really an easy process with no troubles at all.

The credit for that goes to Amazon because, like in M&A, where you need to check all the revenue streams, Amazon Seller Central also doesn’t allow you to manipulate the numbers.

We look in your seller central, and we can see all the numbers regarding your revenue, PPC spends, Amazon fees spent, and nearly everything except the cost of goods sold.

So in the initial week, we do some calculations to decide if the cost of goods sold implies the sound health of the business or not.

If the health is good, that’s all we need.

Subsequently, if we don’t have any problem with the cost of goods and you don’t have any problem with Amazon health, then that’s it, and there is nothing else to check.

This is why it is really, really fast.

Honestly speaking, it's not hard to buy businesses.

It is definitely hard to operate businesses and grow and run them, but speaking from experience, it's not hard to buy them. 

Are there any other criteria to make the deal? Well, as I mentioned previously, what we really seek is at least one million in revenue.

Other than that, we prefer private labels, so we don’t prefer drop shipping, wholesaling, or any other relevant stuff.

At least for now, these are our basic preferences.

We focus on the US, Canadian, German, and UK marketplaces.

Moreover, we are not doing supplements.

We will do any products that heavily rely on R&D.

We don’t do trendy stuff; we don’t buy spinners because their life is very short, and we don’t believe that it will be enough for us to get the money back.

So, that’s our seller criteria.

Why choose Accel Club?

Nick (continuing): Now, let’s talk about why you should choose to do business with Accel Club.

There are several reasons.

We pay more than average on the market.

We believe that we have a really great operation team in place, so you will know that your brand is at the heart of our operations and that we really care about growing your business.

And it’s also important for you because part of the valuation of the total consideration is earned out, so there is some part that you will get based on their performance.

You really need to care about that. What is also great about us is that though we do know that we are buying businesses, we always realize that we are doing business with people.

It’s for all of us.

That’s why, even though it's our profession, we deal with everything on a personal level.

Max and I are always there to chat and negotiate the terms if sellers feel like it. 

Klim and our other representatives are also always there, in contact with the sellers.

However we believe that direct communication with the founders helps sellers to really feel comfortable doing business with Accel Club and feel that they are making a great deal.

Our deal structure is always pretty flexible; in fact, it is much more flexible than the market average.

Also, as we are a US-based company located in Delaware, it is much easier for US-based sellers to do business with us than with some European or other foreign entities.

So, that is all the important stuff there is to know about Accel Club.

If you are someone interested in talking with us directly, please know that we are only one call away!

Talk to Accel Club here.

Let us know if you came via Vova, we'll help you sell your business, and Vova will get a little commission from us, at no extra cost to you the reader.

Vova: That’s great because, as a seller, I would really be happy to know that my brand is in great hands.

Throughout my career, I have heard people saying that don’t be connected with your products emotionally, and I agree with it to some extent.

However, I believe it is very difficult because we put our heart and soul into our business and build a community of customers who we really care about.

So, when we hand our business to someone else, we really want to make sure that it is now in the hands of professional people who will care about it just as we were doing, and we can talk with them, even the founders, any time we want.

Also, I definitely agree that for US-based entrepreneurs, it will be much more feasible to deal with US-based aggregators rather than reaching out to foreign people. 

I will put all the links in this article, which can help you reach out to Nick and Klim and their amazing team.

If you need any sort of assistance, or if you have any questions regarding whatever we discussed today, you can talk to them about it, and they will quickly respond to you.

Thank you so much, Nick and Klim – it was really great hearing from you about such informative material!

Nick: You are welcome, Vova!

And yeah, we will be more than happy to give advice on exiting your business.

So, if you have questions about selling the business, or the legal implications regarding the business, you are always welcome to talk to us.

Even if you are not considering selling to us, and you just have some questions regarding your business that need to be answered, we will really be happy to help.

We are, and we would want to continue remaining an impactful ecosystem player in this space, which is why we love to help sellers.

We know that they come to us to offer something they have invested their sweat and blood into, so we really care about it.

It makes us feel that we also need to contribute to the sellers' community by not only helping them with great exits but by giving them valuable advice and chalking out terms that would really help them.

Vova: Yeah, man. Thank you again for being our guest today!

I have mentioned all the links about Accel Club – these are affiliated links, so if you ever do business with Accel Club and mention my name, I will get a little commission with no extra charge to you, and I will consider this your support in helping me run my free content on YouTube, Udemy and on this blog.

I would really like to thank Klim for connecting me with Nick.

And also, big thanks from my readers to both of you!

Klim: You are welcome, man, and thank you for inviting us here today.

You are doing a great job with your free content, and we feel really happy to be part of that.

I hope to meet with your readers again very soon!

Nick: I am also very excited to be on this blog again and talk with you on a new topic, Vova!

Bye for now, but we will try to be back soon!

Vova: I really appreciate your kind words, brothers.

Now, if you really liked this conversation, you can find more like this on my blog here.

I will see you in the next article! 

Yours, 

Vova :)