|Interest in acquiring Amazon brands and storefronts is incredibly high, but it hasn't always been this way. In fact, in early 2020, Amazon private label sellers were significantly undervalued, acquired for SDE/Adjusted EBDITA multiples of 2.5x - 3x. Now they're bought at 4x with an earn-out, bringing valuations past 10x.|
"Amazon sellers typically get acquired for multiples of Seller's Discretionary Earnings (SDE), which is a sort of an Adjusted EBDITA or annual net profit in rough terms, including add-backs of certain expenses." - Marketplace Pulse
In addition, to determine a fair valuation, buyers must consider additional factors such as category, total profit, trend, growth opportunities, and competitive position.
Now, seller valuations are increasing, and the competition among aggregators is heating up, making buyers and sellers more cautious before making any agreements. There have been some definite challenges in this area of e-commerce, and it doesn't help that disruptions in the global supply chain are causing deals to fall flat.
Back in the day, acquirers could purchase low and produce considerable growth after only setting some basic Amazon optimization strategies. Now, buyers are jumping in amid logistical chaos and will need Amazon smarts and the expertise to manage the operations of an e-commerce organization.
That said, While some buyers are opting out due to these types of challenges, the seller acquisition market is still showing signs of growth and is not likely to come to a halt any time soon.
|An announcement from Seller Central declared new benefits for sellers when shipping inventory to Amazon fulfillment centers using the Amazon Partnered Carrier program. The new feature allows sellers to send box-level inventory across the fulfillment network faster, at no extra cost.|
Before this announcement, sellers were charged for multiple shipments to replenish inventory across various FCs. Now, for eligible inventory, they can arrange for the boxes to be sent to 1 FC as a single shipment while Amazon takes care of the rest of the distribution process to other FCs.
- Faster fulfillment, since Amazon will move your products closer to your customers
- No changes to your shipment fees or current logistics
- Complete visibility into the shipment status for each of your box groups
If you want to take advantage of these new features, simply process a shipment as usual and select a partnered carrier as part of your shipping plan. Amazon will declare whether your shipment is qualified for box-level placement, and from there, they will contact your partnered carrier directly to process the shipment.
Learn more here.
We are in the midst of another strong holiday season, and it's not slowing down. Amazon kicked off festivities on October 4th, and since then, customers have been saving big on the latest and greatest in popular products. According to a study by Profitero, an independent analyst firm, Amazon's prices were lowest by an average of 14% among major retailers through every category this year. Moreover, the majority of sales came through third-party sellers.
For Black Friday through Cyber Monday 2021, some of the best-selling items include:
Amazon surpassed their previous Black Friday and Cyber Monday events breaking records with top-selling categories in Home, Toys, and Apparel.