5 Things Amazon Aggregators Need to Realize

Amazon aggregators are an essential part of the Amazon ecosystem. And, as such, they are highly valued by the company.

To be an Amazon aggregator is to have your finger on the pulse of the ecommerce world. You are constantly monitoring industry trends and major players in the market.

In addition to this, you are also responsible for maintaining a high level of customer satisfaction by responding to queries and complaints in a timely and professional manner. This can be a demanding job, but it is also highly rewarding – both financially and in terms of job satisfaction.

If you’re looking for a challenge, then becoming an Amazon aggregator could be the perfect career move for you. There is no doubt that it is a demanding role, but if you are up for the challenge then you could be in for a very successful career.

What All Amazon Aggregators Should Know

Whether you’re looking to become an Amazon aggregator or have been in the business for a while, here are a few common trends you should be aware of. Not only will they affect your sales but also how smoothly you can run your business.

1. Talented Employees Are Few and Far Between.

We’ve heard from multiple aggregators that one of their biggest challenges is finding good talent. It makes sense: maintaining, troubleshooting, and optimizing an Amazon account is an art.

There aren’t many people who are highly skilled in this super-niche arena, and the ones who are either manage their own seller accounts or run their own agencies.

A major observation we’ve made is that aggregators are placing far too much responsibility in the hands of under-qualified employees.

Optimizing a brand’s listings, maintaining PPC, and dealing with seller performance when an ASIN gets blocked is too much to handle – even for a veteran of the Amazon industry. These tasks take enough time to create a full-time job for each one.

Individual sellers almost always outsource at least one of these aspects of operating a brand, especially when it comes to performance issues. Aggregators should be doing the same.

Operators in the aggregator space simply can’t learn a decade of experience so quickly. No amount of funding can substitute the skills required to continue growing the tremendously successful brands they’ve acquired while dodging the usual “Amazon issues” that come up on a regular basis: policy violations, days or weeks without sales due to blocked ASINs, competitor attacks and more.

2. Damage Control is Crucial.

When aggregators began to enter our arena, we couldn’t help but think to ourselves, “There is no way these guys realize that some of the brands they’re buying are going to get suspended. There is no way they realize how tumultuous this platform really is.”

Now, over a year later, we can’t help but notice that we were right. Many acquired brands have gotten suspended, many ASINs of top-selling brands are getting blocked on a daily basis, and many aggregators are struggling to find the right methods of handling these issues because they didn’t plan for them in the first place.

And really, who would? We get it – normally, a product in the “Pillows” category doesn’t get blocked for containing pesticides. But this is Amazon, and in this world, it happens every day. Welcome to the jungle.

Aggregators must shift some of their focus to both proactive and reactive measures when it comes to account health.

It’s not a glamorous topic, but more rigorous Amazon-specific due diligence and an immediate lifeline for suspended ASINs have to be implemented immediately. If aggregators fail to focus on account health, they will ultimately fail.

3. Amazon Brands Are NOT Your Average Assets.

Aggregators jumped into acquisitions of Amazon brands without realizing that these new assets wouldn’t be anything like the assets they acquired on Wall Street.
We’ve heard top-tier M&A professionals from some of the most notable Amazon aggregators discuss their “current assets” – it took us a few minutes to realize they were talking about the Amazon brands they've acquired so far.

Here’s the reason for the disconnect:

Amazon brands are not traditional assets. Amazon brands are nothing like other acquired assets most aggregators have been accustomed to in the past, for better or worse.

Aggregators weren’t at all wrong when they saw a goldmine in Amazon private label brands, and we’re not at all knocking the FBA roll-up strategy – it’s the future of the Amazon industry.

We admire their tenacity and aggressiveness when it comes to acquisitions, but we don’t agree with the fact that they have refused to acknowledge that these Amazon assets are simply a different animal.

Every single Amazon brand on the platform has its own nuances, its own quirks, and its own very particular methods that are required for continued success. This is the part that aggregators missed.

These Amazon brands are not assets that can be acquired and left alone to continue turning a profit. Every single ASIN under every single brand on the marketplace needs constant, daily attention.

Every operator needs to stay updated on policy changes, no matter how outlandish the next Amazon policy change may be. This is the trade-off every Amazon seller agrees to: “You are free to use our platform and make a killing – but you’ll do it under our terms.”

4. Aggregators Need Amazon-Specific Due Diligence.

Aggregators consider themselves due diligence experts. From a traditional perspective, this is most certainly true. Unfortunately, the traditional due diligence process simply doesn’t cut it in the jungle.

Traditional due diligence analyzes things like Corporate Records, Financial Statements, Employee Hierarchies and Bios, Real Estate, Legal Records, and Written Agreements.

Aggregators probably didn’t realize how few of these due diligence factors actually apply to Amazon brands.

They probably didn’t realize that the only Written Agreements many Amazon sellers have for their brands are a one-page trademark registration and the Amazon Business Agreement.

You know, the one that includes outrageous statements like, “We [Amazon] will not be liable for any delay or failure to perform any of our obligations under this Agreement.”

Aggregators probably didn’t think so many successful Amazon brands do not even use the real name or entity owner on the associated Amazon account.

They probably didn’t realize there would be so few employees and real estate properties to research – many top sellers still operate with just a few freelancers and a supplier who ships directly to Amazon.

Skeletons are hidden deep within Amazon seller accounts. When aggregators don’t know where to look for these skeletons – or the infinite forms these skeletons might show up in – it becomes very easy for sellers to hide crucial risk factors that would change the outcome of a potential acquisition.

The nuances of an Amazon business are vastly different from a traditional asset, and the due diligence process for an Amazon brand needs to be adjusted to cater to every single one of these nuances.

5. Sellers Are Watching Too.

Sellers have always been quite willing to share information and updates with one another. Despite the cutthroat “competitor wars” within specific categories, most Amazon sellers are not in constant competition with the next seller.

This is not the case with aggregators, who are constantly competing with one another in an increasingly small space.

It’s no small feat to navigate the ups and downs of the Amazon platform without communicating with other sellers facing the same problems. Amazon sellers talk.

The corners of the internet where the heaviest hitters of the Amazon platform talk openly are not always easy to find, but within these digital communities, there’s plenty of talk about aggregators.

Some sellers have zero interest in ever selling their brand at all – many sellers make hundreds of millions every year and simply aren’t willing to take a payout.

Others are sharing insights on which aggregators will offer the highest, fastest payout with a sloppy due diligence process that won’t catch all of the black hat reviews they’ve bought over the course of their selling career.

Some sellers are intrigued, and many sellers are still confused at this influx of outsiders into their traditionally outsider-free industry.

Regardless of the billions in funding aggregators have put together to buy out and roll up top Amazon brands [Marketplace Pulse], it’s the sellers who maintain the upper hand. At the end of the day, aggregators need brands to acquire, so they need to be mindful of keeping a positive reputation with Amazon sellers.

Conclusion

As the ecommerce world continues to grow, so does the need for reliable aggregation services. Amazon aggregation is a hot industry right now, and there are plenty of companies vying for a piece of the pie.

If you’re competing for the same, keep the pointers mentioned in this post in mind to get ahead. By following these tips, you can be well on your way to success in the Amazon aggregation business.

Do you have any questions about Amazon aggregation? Please feel free to mention them in the comments section.