As a successful Amazon FBA or Shopify seller, I suspect you have set blueprint for creating new products.
This includes everything from the initial research phase to sourcing suppliers, packaging, and finally, launching.
The process you follow has been tried, tested and refined over many SKUs.
But here’s the thing:
Whilst not all products hit a home run, they ALL take pretty much the same amount of time, energy, and money to launch.
Amazon aggregators undergo a similar set process when performing due diligence on smaller private label brands.
And get this:
It takes roughly the same amount of time to execute due diligence on an Amazon FBA business doing $1m in annual revenue as a business doing $20m.
With this in mind, during our many conservations with aggregators, we have observed the following.
1. There are very few aggregators that will look at businesses with less than $500k in annual revenue.
2. If your revenue is between $500k and $1m, you (or your numbers) need to prove that the business is growing, not declining.
3. Some aggregators are extremely picky with the deals they pursue, closing fewer (but significantly larger) acquisitions than the rest of the market. That being said, if your revenue is between $5m-$20m, you are in a strong position to hold out for a higher multiple.
And perhaps unsurprisingly:
4. If you have built a business generating $20m+ in annual revenues and your financials are solid (e.g impressive year on year growth), we have seen valuations of 8, 9 and even 10 times your Seller’s Discretionary Earnings (SDE).
Interested in finding out more?
Click here to compare over 150 aggregators in 3 simple steps. We will then reveal the select few companies that are most likely to offer you the highest valuation.