It’s fair to say the Direct to Consumer (DTC) model of e-commerce is a difficult nut to crack.
Trust me, I speak from experience.
In fact, since publishing my very first WordPress site in 2006 all the way up to 2021, I tried monetizing products on WooCommerce, Magento, Shopify, and everything in between.
What did I learn in the process?
Launching a private label brand on Amazon FBA was an absolute breeze compared to DTC.
And 99% of sellers would agree.
Until recently*, that is.
* See – Amazon restock limits, PPC costs, seller performance, ASIN hijacking, Chinese competitors, and so on.
Amazon vs Shopify Revenue
With all that being said:
And as we have stated many times.
Amazon aggregators look for different things in a private label business.
Whether it’s the number of SKUs, product category, marketplace sales, geographical location, revenue, margin, or SDE.
Richard and I are often amazed at the types of deals aggregators pursue, and the ones they pass on.
Needless to say:
No matter what type of brand you have created, buyers will come to the table if the business profile and – crucially – the financials hit the buyers’ pre-determined sweet spot.
Now, on that very subject.
An interesting trend appears to be emerging in recent months.
And that is a preference amongst many Amazon aggregators for brands with strong DTC financials.
To put that another way:
If you have managed to crack the code of making your Shopify (or equivalent) store profitable, your business is in great shape to be acquired this year.
Particularly if you have weaned yourself off the 100% Amazon teat and can boast a more diversified split of revenue streams.
Amazon Aggregators vs DTC Ecommerce Aggregators
This brings us neatly around to your selling options.
- Amazon aggregators
- DTC Ecommerce aggregators
At the risk of (once again) offending our friends in the broker world, I’d like to focus more on the latter two.
Since the subject of Amazon aggregators has already been comprehensively covered on this website, let’s dive into DTC Ecommerce aggregators, and why you might want to sell your business to one.
Okay, I know what you’re thinking.
What is the difference between an Amazon aggregator and an Ecommerce aggregator?
Well, consider this.
The e-commerce ecosystem is enormous.
And although it might come as a surprise to some FBA-only sellers, an entire world of online riches exists outside of Amazon.
The strategies for operating a true DTC brand are more complex in nature compared to FBA.
But the rewards, many would argue, can be infinitely more lucrative.
Because although Amazon does a lot of the heavy lifting (customer service, fulfilment etc) in an FBA-only business, they ultimately own the relationship with the customer.
And this is where the real value lies.
Amazon aggregators acquire and add value to brands predominately selling via FBA.
These brands ‘piggyback’ off Amazon’s core USPs of price selection and convenience. They are, however, heavily reliant on marketplace sales.
Ecommerce aggregators, by contrast, seek out brands that exist independently of third-party marketplaces like Amazon, eBay and Etsy.
They understand the complexities of the DTC business model but consider it a longer-term play, with fewer downsides.
Whilst the market is flooded with Amazon-only aggregators, there is still plenty of buyers for DTC businesses trading via Shopify.
If you brand pulls in orders across several platforms, you’re potentially in line for a higher exit multiple.
With both e-commerce aggregators and Amazon aggregators competing to acquire the business you have created.
This website was created by ex-Amazon sellers, Martin Smith and Richard Turnbull.
To learn about our story, our private label FBA brands, and our first-hand experience selling to Amazon aggregators, click here.
You may also wish to check out our 2022 Definitive Guide to Amazon Aggregators.
Written for FBA sellers, this simple, easy to follow document takes less than 5 minutes to read and represents the culmination of over 100 hours of research into the Amazon aggregator space. To access the guide today, click this link.