WebsiteClosers® presents an INC 500 AMAZON AGENCY that helps large brands find a foothold on the Amazon platform. For nearly 6 years, they have offered valuable agency services to clients, such as marketing, brand recognition, listing management, supply chain fulfillment, and customer engagement.
They have rocketed up the ranks and are now among the TOP 1% of Amazon 3P sellers. Not only that, but they have also been recognized by Inc. magazine as one of the 500 fastest-growing companies in the US.
Their rapid growth has allowed the brand to consistently release unique and exclusive product offerings, adding to a catalog that covers a wide number of popular product categories. The variety and quality of their offerings stand out from those of their rivals, attracting the 30 brands they work with that now includes some very large, well-known brands on the Amazon Marketplace.
Business Broker Takeaway
Our analysis of this Amazon business indicates a major opportunity for a buyer interested in an Amazon-based company, and we believe buyers will recognize that this one has operated very successfully on multiple levels that competitors simply can’t match. We are excited about this company and its clear value for 3 important reasons:
1. Flexible Business Models. From their inception, the brand has worked to ensure their clients can thrive on Amazon. As no two companies are the same, they handle each client individually to improve their online presence, polish their pricing, and manage logistics. By helping their clients improve their sales and profitability, the agency also sets them up to be a strategic partner in their future growth.
2. Problem Solving. The agency has recognized the many hurdles that vendors face on Amazon’s Marketplace, and countered them by offering unlimited support, resources, and strategic expertise to their 3P brands. By working with them, their clients can achieve a more sustainable business model than what they would achieve by operating independently.
As more online brands are seeking experienced 3P partners to help them navigate Amazon, the brand has flourished, building a strong reputation as a trusted partner for proactive shop management.
3. Multiple Channels. While Amazon is their primary platform, the brand works with clients across multiple sales channels. Outside of Amazon US, Amazon Canada, and Amazon Mexico, they also help brands on eBay and Walmart. Additionally, the brand sells technology products on Newegg’s Marketplace, diversifying their revenue.
The Company
Since their launch in January 2019, the brand has been reselling products that help their clients excel on Amazon. They offer vendors an Amazon-as-a-Service (AaaS) solution, which allows clients to leave their Amazon sales channel in the hands of experts while they focus on building and scaling their brands.
They work with each vendor to develop custom solutions tailored to their brand’s unique challenges. Their pricing is based on the specific profit margin profiles of each manufacturer, as well as their ability to negotiate favorable pricing.
The brand was founded to tackle the daily challenges 3P sellers on Amazon face, which often require expert teams to manage as companies grow. These challenges include, but unfortunately aren’t limited to, rising fees, increased competition, margin guarantees, freight allowances, marketing, funding, returns, and penalties.
These issues are made worse by Amazon’s unpredictable inventory management, which swings between overstocking and shortages and often causes lost sales, channel conflicts, and price reductions.
The agency aims to solve these problems with a full-service, end-to-end approach that improves brand acceleration, and is also available through 2 flexible payment options. The first is their Reseller Program, which has the agency buying products directly from their client to act as their Authorized Strategic 3P Seller. In the second, their Agency Program, clients pay the brand to act as their comprehensive Amazon service partner.
Both programs offer clients a wide range of services to help them succeed. These services include logistics, brand management, case management, advertising, price monitoring, industry research, review management, and listing optimization. These services are organized into 5 key divisions: Brand Protection, Supply Chain & Fulfillment, Customer Experience & Back Office, Marketing, and Account Management.
Though the Reseller Program offers strong growth potential for a buyer, it requires a significant amount of capital to maintain, as the agency purchases the inventory upfront. The agency is contractually protected if the inventory doesn’t sell, but they must still maintain the cash and credit needed to pay these upfront costs.
Operations and Marketing
Outside of their standard trademarks, the brand boasts distinct Intellectual Property (IP) that set them apart. They have developed a proprietary system for managing ASINs on Amazon, which has been a tried-and-true method of managing listings. They also own a Dynamic Pricing and Inventory Management Software, which cost $3 million to develop and is unique to them.
The brand advertises their services through a multifaceted digital marketing plan that includes PPC ads on their marketplace platforms, content marketing that involves their website’s blog, social media marketing on Facebook and YouTube, podcasts, and email campaigns. A buyer could improve their advertising by implementing enhanced marketing tools, such as an affiliate marketing campaign.
Their operations are handled by 72 experienced employees and a Senior Management Team. The team is automated and efficient enough that the agency’s day-to-day operations require no input from the current owner. The team, especially their Senior Managers, are well-versed in how Amazon operates, and know how to drive sales and how shops should be run.
They also employ contractors to oversee back-end account management and brand alignment for their brand partners.
The light workload the owner enjoys will leave a buyer able to focus on scaling shortly after purchase. The ideal buyer for this brand would have the skills necessary to raise capital for expansion projects, and the ambition to take the agency to the next level of growth.
The reason the agency is in search for a suitor is based solely on access to capital. The company’s clients are requesting that they purchase more and more inventory to expand their SKU count with the agency, but the agency has tapped out their available capital with the current client and SKU count. A well-funded buyer with access to capital can take this business to far new heights by opening up the client and SKU count and using the 72-man team to offer professional left services to a much larger audience of large 3P Amazon Sellers. The sky is limit with the property funding.
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