Amazon Marketplace Facilitator For 1P & 3P Brands

Business Overview:

Website Closers® presents an enormously successful eCommerce Agency that provides service and support to large brands that are struggling on the Amazon.com platform. For nearly six years, this company has empowered brands on the Amazon Platform, providing them with crucial services that include marketing, brand recognition, listing management, supply chain fulfillment, and customer engagement. 

Having grown rapidly, the company now ranks among the Top 1% of Amazon 3P sellers and has been recognized by Inc. magazine as one of the 500fastest-growing companies in the U.S. 

Their rapid growth has enabled the company to consistently create unique and exclusive product offerings that easily surpass what competitors are offering, while providing customers with a broad catalog covering a wide number of popular product categories. 

As a result, the company’s Repeat Customer Rate just shot up to 30 Brands under management and the company just brought on Chemical Guys. 

The business has come about due to the problems 3rd party sellers on Amazon encounter every day. These problems are multifaceted and often require teams of people as a brand grows. Amazon applies pressure on brands of all sizes through increased fees and expenses, increased competition and more. It is possible to succeed on the platform, but you need experts to deal with things like margin guarantees, freight allowances, marketing, funding, returns allowances, and various penalties. Amazon also has an unpredictable inventory management issue, characterized by both overstocking and insufficient stock levels, further exacerbating the management of these issues, leading to loss of sales, channel conflicts and potential price reductions that impact brands adversely. 

There is an answer to all of these problems – this agency. It deals with these challenges for clients by providing a full-service, end-to-end approach using two flexible, easy payment, brand acceleration options. One model is a Reseller Program whereby the agency will purchase products directly from the brand and become the brand’s Authorized Strategic 3P Seller. The other option for clients is an Agency Program whereby clients pays the company to be their comprehensive Amazon agency service partner. In both scenarios, a lot of the same services are provided to make the brand stand out and accelerate on the Amazon Platform, including logistics, brand management, case management, advertising, price monitoring, industry research, review management and listing optimization. All of this falls under 5 separate divisions: Brand Protection, Supply Chain & Fulfillment, Customer Experience & Back Office, Marketing, and Account Management. 

The Reseller Program has massive room to grow, but with that growth comes a requirement to have access to capital. Because the agency purchases the products up front in the Reseller Program, they must have ample access to cash or credit to manage this up front cost. The agency is covered on the inventory if it doesn’t sell through contract requirements with the client, but there is still an upfront requirement for capital. 

This business also has something many companies don’t – 72 employees and a Senior Management Team, which currently manages all operations for the business. All the tools are in place for a strategic buyer to acquire this business and its amazing team, and begin to scale on day one. 

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: 

Flexible Business Models

From the start, the company has strived to ensure that Amazon works for all brands by giving them comprehensive solutions to drive sales and simplify their presence on Amazon’s marketplace. The company treats each brand individually, working to enhance their online presence, optimize their pricing, and manage logistics so they’re operating a seamless eCommerce shop. Their goal has also been to help each brand increase its sales and profitability, and to become a strategic partner in their future growth. 

Problem Solving 

Recognizing that competing on Amazon’s complex Marketplace presents plenty of challenges to vendors, the company has worked to provide unlimited support, resources, and strategic expertise to its 3P brands. The company recognized that more online brands were turning to experienced 3P partners to help them overcome those challenges. This has allowed this company to develop a strong reputation as a trusted partner for proactive management of their shop, giving them a more sustainable business model for the future than operating on their own. 

Operating on Multiple Channels

The company works with brands on multiple sales channels, including Amazon US, Amazon Canada, and Amazon Mexico, as well as with brands operating on eBay and Walmart. They also sell technology products on Newegg’s Marketplace. Their skilled team understands how to help shops grow their sales without any conflict between these different marketplaces, and they can effectively demonstrate to brands that their sales will accelerate on Amazon because they operate with a highly ranked seller. Brands that partner with them get all the benefits that come from their ranking and experience. 

The Company

Launched in January 2019, the company has been reselling products that help brands grow and succeed on Amazon through the ups and downs of the COVID crises. What they provide vendors is Amazon-as-a-Service (AaaS) opportunity where they can let the experts in the Amazon sales channel do what they do best while the client can focus on what they do best – building and scaling brands. 

The company negotiates with each vendor to provide a custom solution that addresses their challenges and pain points. No two clients are the same. Their pricing depends on the unique profit margin profiles of each manufacturer, combined with their ability to negotiate favorable pricing. 

Inventory is conveniently shipped from Amazon’s Fulfillment Centers, and the company continues to benefit from the massive growth of eCommerce in general and Amazon in particular, where 2.5 million third-party sellers now operate. With such high competition, the company has been able to demonstrate to brands that a full partnership is a smart move strategically, and the company’s business model successfully targets both Amazon 1P and 3P shops that are selling more than $10 million on Amazon. 

Operations and Marketing 

Highly automated and extremely efficient, the company now has 72 seasoned and skilled workers who manage all daily tasks, so the current ownership is no longer required to run any of the company’s day-to-day operations. The company also employs contractors to oversee back-end account management and brand alignment for their brand partners. 

From an Intellectual Property standpoint, the company has a few things that make it stand out, other than the normal trademarks it owns. First, it has a very specific system that it uses to manage ASINs on Amazon – this is a tried-and-true way of managing these listings that works. Another significant advantage for a buyer to consider is that the company owns its Dynamic Pricing and Inventory Management software, which cost $3 million to develop and is not replicable anywhere. 

Sales are driven by a multifaceted digital marketing plan that includes running PPC ads on the marketplace platforms, content marketing (including a blog on the company’s website), social media marketing on sites such as Facebook and YouTube, the use of podcasts, and email campaigns. There are additional ways for a new owner to drive sales higher through enhanced marketing tools, including by launching an affiliate marketing campaign.

Operations and Marketing 

A major benefit for the buyer is that this company’s experienced team has enormous expertise in how Amazon operates, especially its Senior Managers. They know how to drive sales on the platform, and how online shops should be run. A new owner who is also skilled in raising capital for expansion projects would be able to scale this company very quickly with this powerful team behind it. 

The U.S. eCommerce market brought in $1.2 trillion in profits in 2023. Shops operating on Amazon have been able to tap into an audience of 280 million Americans who shopped online last year or roughly 80% of the population. Since the Amazon marketplace continues to reign as one of the leading and fast-growing platforms within the eCommerce industry, this company is ideally positioned to see skyrocketing growth as the entire industry does the same.

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