The Phase of Acquisition in Amazon FBA: Join Us In This Chapter

Michael MicheliniBlog, Business, Ecommerce, Podcast0 Comments


Let us call this, Acquisition Chapter.

It is the process of an industry – Amazon FBA, eBay, retail stores and hard drive manufacturers, that goes in waves. There is the startup phase with the blue ocean. Then, there is growth, maturity, and then consolidation.

Anyone involved in the Amazon FBA space now knows that we are in the consolidation phase of the industry.

Here at Global From Asia, we have been riding the wave over the last few years of this transition in the industry and today, we have some exciting news.

We are going “all in” on the consolidation phase with the community and in our extended network of the cross border industry.

Massive Investment Money Pouring Into Buying and Rolling Up Amazon FBA

So what exactly is happening (for those who are hiding under a rock!)?

What many of us saw in the ecommerce space decades ago, once you start to sell 1 product online, the process is pretty similar when you sell another. Even in the eBay and shopping cart days, it was pretty streamlined.

Well, Amazon and the FBA program made it even more “vanilla” allowing basically any product to be sold in the same way – buy it, make sure the quality is good (important step many of us slip up on), ship it to Amazon FBA warehouse, collect money.

(I know, much more than that.)

But once you reach a certain level in the business and become an owner, not an operator, you realize that you can use the logistics team, the marketing team, the influencer team across all your products and yes, across multiple brands.

Amazon just made it so much more streamlined to scale up an ecommerce business.

So, investors have been learning this over the years (took a little while in our opinion) and are now dumping money into this.

The math is 1+1 = 3, or even more (if you have access to cheap capital, which is plentiful nowadays).

The Big Get Bigger, The Small, Well…Have a Choice

I talked to my friend Matt recently and he shared a story about hard drive manufacturers in the 1980s and how there were at least 223 companies that were manufacturing hard disk drives. Most of those in that industry has vanished through bankruptcy or mergers and acquisitions. Only three manufacturers have survived: Seagate, Toshiba and Western Digital (WD). All of which grew at least in part through mergers and acquisitions. Source: https://en.wikipedia.org/wiki/List_of_defunct_hard_disk_manufacturers

Will they play out in the Amazon and ecommerce space?

I would say in some form or another. Maybe there are still many brands but there will be conglomerate operators / brand portfolio owner/operators that will control a wider range of brands.

And I’d say COVID-19 has only accelerated that trend. Shipping costs, operation costs, risks and overall business stress are much higher for a smaller business than a bigger one.

A bigger seller has scale, has diversification across product lines and factories. A smaller seller (mom and pop entrepreneur, ones I love) have a small group of products and therefore higher risk. They get higher shipping rates. They are at the bottom of the priority list from factories for production backorders. Amazon doesn’t reply to their lost shipment seller central cases.

You get the gist.

So, here at Global From Asia, we hope to help those in our network, and make this transition in the industry fruitful for as many as possible.

Join Us In This Consolidation Phase (Sellers, Service Providers, Friends)

So what is the pitch, you say?

Here at Global From Asia, we are a media group and community. Over the years, we have seen many in our community being acquired and we ourselves have been on both sides of the table in various situations (Ecommerce Gladiator).

Now, it is a stage to truly scale that and be a broker to accelerate this for our community.

Criteria We Are Looking For In Sellers

This is what kind of sellers we are looking for and how the deal is structured.

Type of deal:
Asset deal (share deal only on an exceptional basis)

Type of company (target):

  • Online, E-Commerce or Amazon brands with proven track record on online marketplaces
  • Revenue share of own products / private label products needs to be higher than 85%
  • All categories except Fashion, Jewelry and Perishable Goods

Target company location:
North America, Europe, Asia

Target markets:
Europe, North America, Japan

Target financials:

  • Revenues (latest financial year):
    min. USD 1,000,000/year, preferably USD 4,000,000/year or more
  • EBITDA margin: min. 10%
    Track record or strong growth path of sales performance required

Business figures:

  • Focus: B2C (70% of total turnover or higher)
  • Sales channels: Amazon 60% of turnover or higher, remainder in other global/regional online marketplaces or own web-shops

Products:

  • Number of SKUs: max. 500
    High revenue concentration of top selling products required
  • Average selling price: min. USD 12.00
Here’s a handy PDF copy of the above criteria

We Would Love Your Referrals and Alliances

If you are:

  • An ecommerce seller, we hope to help you get a $$ check. If you fit the criteria above, it should be an easy process. If you’re not ready, but know others who are or keep us in mind when you are ready. With that inflow of cash, we also have ways you can invest that in new business ventures (speak with Mike privately).
  • A service provider or a “networker” in the Amazon / FBA / ecommerce space, we’d love to discuss referral agreements and arrangements where we can all make some money and win together.
  • A media company or community like GFA, we totally understand how much work and time it takes to create content and events. We would love to make deals to support your creativity and hard work and ensure your community is supported.

Let’s Get In Touch Today!

Fill out the form below, or talk to our community managers today, in China, on Wechat, or overseas.

Let’s make some deals!

Episode Length 11:05

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Show Transcript

gfa-announcement-broker

[00:00:00] Hey everybody. So this is a special edition of the Global From Asia podcast. A little bit shorter today. Check it out at globalfromasia.com/broker. It’s a new chapter, the new focus we’re doing, and I just want to catch up, make sure everybody knows it’s going up – audio podcasts, video podcasts, YouTube vlog. Check it out.

[00:00:21] And we want to engage with as many people in the community. I can’t believe it’s almost been eight years since we started this podcast. So let’s just dive right into this episode. Welcome to the Global from Asia podcast where the daunting process of running an international business is broken down into straight up actionable advice.

[00:00:45] And now your host, Michael Michelini. Thanks for watching as always or listening. So what, what am I talking about? There’s been a huge change. You know, we’ve been always involved in it. How do we call it, cross border industry. We started as the Hong Kong podcast and we went into Amazon e-commerce over the years.

[00:01:04] And I know some people say the show is always changing a little bit of kind of styles. We like to mix it up, but I’ve always thought international business or international trade. And as we talked about in our cross-border matchmaker Events. And there’ll be more of those recordings coming onto the show in the future.

[00:01:23] There’s been a huge change due to COVID and trade wars and just general business and as one. So yeah, within the Amazon and e-commerce space, there’s been a huge change. You know, we went through e-commerce gladiator. I don’t know. Some of you checked out that series. We had an issue and a lot. That was a roller coaster ride.

[00:01:46] You know, we, we also got into the acquisition space after, after that book and then COVID hit. And I’ve been here in Shenyang, China as many of you know.  It’s not a bad day today. It’s spring day today. And, you know, we’ve all been adapting and changing, and I think there’s even more changes in the e-commerce space. So what do you think that means?

[00:02:12] What is your thinking of that? So what we mean by all these changes over to, to the COVID and acceleration of e-commerce tons of investment. Money’s been going into the Amazon FBA acquisitions and e-commerce acquisitions is something we’ve been seeing. I, I don’t know, maybe you’ve not noticed it. But for us here at Global From Asia, we’re getting emails all the time from people raising money and

[00:02:38] Wanting to buy Amazon businesses, E-commerce businesses, brands, private labels, and asking us to help. So why do you think that is? Why do you think that is? We think in any industry, there’s the beginning, you know. The Blue ocean, everybody starting up. Like we, we covered in global from asia, we were talking about Amazon in the earlier days.

[00:03:00] We’ve started in 2006, 2007 in the, when I was in New York city. And, over the years we’ve done different businesses, E-commerce, talked about Amazon and it was blue ocean. Now, I don’t want to say red ocean, but what it is now is it’s getting to be more, more of a serious mature industry where lots of huge investment money’s going into it.

[00:03:25] And that means they want to do something called roll-ups acquisitions. They want to basically take multiple brands, multiple different businesses and put them in together under one management under one. Holding company. Okay. And that’s been really what’s happening and here we’re, we’re getting involved in that even more.

[00:03:47] And that’s, we’re talking about today. So with all this investment money going in, why is that possible with Amazon FBA businesses? They’re somewhat vanilla. I don’t want to disrespect sellers, you know, I’ve, I’ve done it myself, but you know, once you start to sell product at Amazon, another product is not that much different.

[00:04:07] You know, it’s not like with shopping carts and even eBay days where there was a little bit kind of different systems. Here, they made it such a, I guess really smooth process where you can really just sell anything. And it’s almost the same, same system. You can have your same team, same, you know, logistic styles.

[00:04:28] And, and processes that really can just scale almost independently. And so with this money going in a lot of times, one plus one equals three or one plus one equals five. And you know, I’ve talked to others in the industry changes, you know, somebody was talking to me about in the hard drive spacers. We all have these different brands selling hard drive.

[00:04:50] And later it just became three different brands. I don’t want to say it’s gonna happen within the Amazon e-commerce space. It will be different. It’ll be multiple brands, but I think there’s these massive conglomerate management companies, investment companies are going to be managing all of these from one central operation.

[00:05:12] What does this mean? What are we, what are we talking about? Why are we bringing this up? What’s what’s the, what’s the big deal? What am I, what am I trying to share today? So today we are just diving head for acquisitions or becoming a broker where you’re getting really decent, too deep into the deal flow.

[00:05:28] Obviously, our name is global from Asia. I’m here in China. So we’re working a lot with the Asia and China seller space, but we want to welcome people anywhere around the world. We know the show is in English and people are listening from all around the world. So this is an open offer to everybody listening.

[00:05:45] And we want to really get you involved with this as well. So here’s, here’s the deal basically. I’m going to get my notes out. So we’re looking for it. Doesn’t have to be Amazon FBA, but e-commerce B2C sellers that are well, it’ll be a purchase of the assets, so it can buy the seller account. The brands it’s going to buy that listings basically in a non-compete there’ll be an asset sale.

[00:06:15] It’s going to be, at least 85% of the listings have to be private label. It’s not like retail arbitrage or anything. We’re looking for at least top line 1 million to 4 million US per year in sales for industries. It’s basically any industry, but we’re not looking at fashion. We’re not looking at food and we’re not looking at jewelry.

[00:06:39] So those three. Sorry. If you’re in that one, we’re not, we’re not looking at that one for what market you can be anywhere you can be. You can be a seller based in Asia. You can be a seller based in North America or Europe or South America, basically the location that you are, your company isn’t as, isn’t as important.

[00:06:55] But we are looking at only on, selling on Amazon, Japan, selling on Amazon or in the west Japanese market, North America market, European markets. And that’s mostly the criteria. You can check it out at globalfromasia.com/broker. So if you fit that criteria and you’re potentially thinking about selling your e-commerce brand, your e-commerce business, do we have a form on the site?

[00:07:22] globalfromasia.com/broker, you could fill out and we would be happy to really work with you. It’d be a great way if you enjoy the show. You want maybe to change your business, you know, start a new one. Definitely maybe something to think about. But if you’re not fitting that criteria and you want to get involved, we still want to work with you.

[00:07:41] We have contracts. We can make you a referral agents. If you think you can find these kinds of sellers, we would love to work with you in the community. We could have our agents and our team, our, our community managers talk to you and we have contracts and we can also make a pretty fair offer to you. If you can bring in these kinds of criteria to us, that we would then purchase through our network.

[00:08:06] So that’s, that’s basically our main offer. So why, why should people sell their business? Why, why now? You know, I, I, if anybody’s doing it, shipping costs are getting more expensive. You know, Amazon is really starting to make it harder and harder to send your products in and there’s more and more as investment money going in.

[00:08:23] So I don’t want to be the messenger of bad news, but we just feel like, you know, the bigger is going to get bigger in this industry and the small might be a little bit harder because the processes and the systems are the same. But if you have more investment money, more capital, bigger teams.

[00:08:45] You’re going to be able to weather this storm. So I would think at least you should consider selling. I know somebody people say, oh, we sell outs. We sold our businesses in the past. I don’t think there’s anything wrong with that. And it’s something to consider. So that’s really what we’re focusing on today.

[00:09:01] That’s the purpose of today’s show and announcement, globalfromasia.com/broker. And maybe we can turn, we’ll move you into partners with us working with us long term. That would be amazing. Or we can make you some multiple millionaires. You know, we’ve actually talked a lot of people in our community over the years who have gone to our cross border summit, gone to other events. And they’ve met brokers and acquisitions companies there and they sold and they thanked us. But this was even, you know, we appreciate that, but this will actually really support the show, support the community, support me if you work through us.

[00:09:35] So we would love to consider you to either sell with us or be one of our agents, referrals, even just making introductions. Maybe you don’t even care about any kind of referral fees. This is the time to, to get involved with us, talk to Jan on the team or others in our team, and we want to make this work.

[00:09:55] All right. I think, I think that’s really it. Thanks again. I’m going to enjoy my walking around today too. It’s a nice day. They got a photo there, but I’ll be going around China to talk to a lot of different China sellers.  You know, especially we’re interested in people based in China. But like I said, you can be based anywhere if you’re selling to Japan markets, North America markets or Europe market, private label, and the criteria above.

[00:10:26] And we also typed it out of course at globalfromasia.com/broker. Thanks again for checking me out, the show all the way through and it would be great if we can make this a profitable business opportunity for you and for us. For the long term support, what we’re doing, support the content of our community and support.

[00:10:45] Making some deals. See you guys later. To get more involved in running an international business. Please visit our website at www.globalfromasia.com. That’s www.globalfromasia.com. Also be sure to subscribe to our iTunes feed. Thanks for tuning in.

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Tags: amazon, amazon fba, asia, business, career, china, e-commerce, ecommerce, entrepreneur, FBA, guide, tips

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