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▶ Video account attention cross-border navigation It is learned that in 2021, among the more than 2 million sellers on Amazon's US site, about 89% of sellers use Amazon's FBA delivery service. It can be seen that third-party seller income has become an important source of Amazon's income. However, Amazon remains as "cold-blooded" as ever in its treatment of sellers. Recently, affected by the continued rise in energy and inflation, in order to offset part of its own costs, Amazon FBA announced a 5% increase in fuel and inflation surcharges, which undoubtedly increased the cost burden of sellers. Under such circumstances, in addition to the growing calls for "price increase protests" , many sellers have also begun to withdraw and plan to sell their stores. ▲ The picture comes from the seller communication group However, we learned that recently, regarding the sale of stores, some sellers reported that their information seemed to have been leaked. Received a store acquisition email! The seller's information was suspected to be leaked Recently, a seller reported on the forum that he received an email from a brand acquirer. The email not only stated that the seller's store was to be acquired, but also stated the seller's brand name. The seller was very confused about the information leak. ▲ The picture comes from Zhiwubuyan Many sellers have remained highly vigilant about this: "It looks like there may be some tricks involved, so be careful." "Acquisition? Sure, let's talk offline. Otherwise, let's not talk about it. The information is well protected." "It's probably a scam, so just ignore it." Some sellers also published their own analysis on the issue of brand acquirers, saying that some irregular brand acquirers are trying to obtain information. The main steps are as follows: 1. Quote a high price in the early stage; 2. Conduct due diligence: Ask the seller to provide as much detailed information as possible and take various authorization actions; 3. After the information investigation is completed, they will either bargain hard or simply lose contact. The seller also mentioned that in most cases, the probability of losing contact is higher after the information collection is completed. ▲ The picture comes from Zhiwubuyan In this regard, we also learned that recently in the seller communication group, some sellers also reported similar situations: the capital team would negotiate acquisitions with sellers with good BS sales, requiring the sellers to provide various detailed information. After obtaining the data, they would copy the seller's products through the data provided by the seller and use capital to sell them. ▲ The picture comes from the seller communication group However, some sellers also mentioned that it is not advisable to generalize. Not all brand buyers will perform this kind of "information-collecting" operation. Formal brand buyers will follow proper procedures to acquire stores. Therefore, we would like to remind all sellers that if you are willing to sell your store, you need to do so only after you are sure that you are going to exit the market. And when negotiating with brand acquirers, it is best to communicate offline to avoid information leakage, which will not be worth the loss. As of press time, the seller who posted the forum post said that he had blocked the email account that posted the email. Therefore, it is not known why the seller's information was leaked and whether the brand acquirer was fishing or sincerely acquiring the brand. We will continue to pay attention to it. In addition to the "information-trapping" phenomenon in the brand acquisition market, it is understood that some Amazon acquirers have recently announced a suspension of store acquisitions. Amazon's brand acquisition industry stalls It is learned that according to Marketplace Pulse, as of now, Amazon Aggregator has attracted nearly US$15 billion in financing. Among the 55 Amazon Aggregators with public financing information, 32 have obtained financing of more than US$100 million.
▲ Image from Marketplace Pulse However, it is learned that the recent situation in the brand acquisition industry is no longer as prosperous as it was in 2021, and is moving towards the Trough of Disillusionment in the Gartner hype cycle, that is, performance problems, lower-than-expected adoption rates, or failure to obtain financial benefits within the expected time have led to disillusionment, and people's disappointment with the results has begun to replace their initial enthusiasm for potential value. So far, some Amazon brand acquirers have suspended acquisitions. The main influencing factors are: 1. Amazon seller valuations soar
According to Marketplace Pulse research, Amazon private label sellers are being acquired at 4 to 8 times SDE (seller discretionary income) / adjusted EBDITA (earnings before interest, depreciation and amortization) multiples, combined with earnings that can push total valuations over 10 times. Combined with offers for earn-out payments, a business with $1 million in revenue and $250,000 in SDE profits would typically receive a guaranteed payment of over $1 million (4 times SDE). 2. The epidemic has affected the supply chain
Due to the epidemic blockade and the Russia-Ukraine conflict, transportation costs are rising, truck transportation has slowed to almost a standstill, and global supply chain problems are intensifying and even being disrupted. 3. Acquired brands are not operating well, and growth is difficult For Amazon acquirers, how to operate after the acquisition is the top priority. Therefore, operational capabilities are actually more important than M&A experience. However, compared with Amazon sellers, many Amazon acquirers lack operational management. Although some acquirers choose to cooperate with agencies to solve this problem, in general, the growth of brands after acquisition is not as expected. Compared to the previous two years when it was favored by capital and attracted over 10 billion US dollars in investment, Amazon's brand acquisition industry seems to have stagnated recently.
However, we also learned that although some Amazon acquirers have chosen to exit the acquisition market due to poor capital structure, the financing situation of the top Amazon acquirers is still very impressive. They are not keen on acquiring smaller brands and usually only acquire part of their portfolio. Dozens of investors are doubling down on their portfolio companies and looking for differentiated acquirers (such as those focused on acquiring DTC brands). Today, competition in the Amazon brand acquisition industry is becoming increasingly fierce, but judging by the financing situation, the industry still has certain prospects. I wonder if sellers have encountered similar situations recently? Welcome to leave a message in the comment area to share~
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