Amazon aggregators (aka “Amazon roll ups”) buy up-and-coming brands that sell products on Amazon. The idea is to buy lots of small Amazon-based brands (FBA or FBM), and achieve growth via economies of scale with more efficient marketing, sourcing, logistics, and back-office operations … in theory, at least.
VC-funded aggregators had been raising lots of money until this year, but problems have emerged, and not just related to advertising and interest rates:
“Macro issues aside, some aggregators turned out to be worse at being Amazon sellers than the Amazon sellers they acquired. Unsurprisingly, capital doesn’t solve this. As sales shrunk, the reality that Amazon aggregators are nothing without being Amazon sellers first set in. Operational skills matter a lot more than M&A experience.”
There must be a lot of variation at the aggregators when it comes to operational competencies, but some issues may relate to the brands they are acquiring as well as the “intangibles” that I talk about in my Lean Media book. These really do make a difference, particularly for brands with big design/creative components, as well as brands with a “voice” that comes from an engaged founder or employee.
