|Chris Bell is the founder of Perch a company that recently raised $123m and has already acquired more than 20 Amazon brands in the last 12 months.|
His unique background makes him uniquely suited to execute on this Amazon FBA rollup strategy.
For context, he spent 6 years working at Bain & Co on more than 40 M&A deals. He also spent ~4 years at Wayfair helping them workout supply chain and logistic kinks to get shipping of big and bulky down from more than 30 days to 2.
Recently he brought the insights from those experiences as well as the more than 20+ acquisitions he’s made under the Perch umbrella to The Jason & Scott Show (a podcast about retail and ecommerce)
Here are the 3 big takeaways or tips from the episode:
1. Don’t get distracted by selling internationally.
Of the brands he works with he said that more that 75% are US only and even many of the companies based in Eastern Europe are exclusively selling on the .com store.
In his experience the marginal benefit of selling internationally isn’t worth the added complexity of getting setup.
2. Winning your niche is table stakes.
Many sellers I meet are at a few million in revenue and will start resting on their laurels, taking for granted the distribution power of Amazon.
If acquisition is your goal, Chris is looking for medium term defensibility. From his eyes that means ~6 years of growth if he’s going to pay a standard 3X multiple on earnings.
To get there, he’s looking for you to be brand registered with Amazon, trademarked, be on the top of organic search, have profitable unit economics, and most importantly, a low return rate/great reviews.
3. Differentiate to avoid competition.
In his experience he saw big and bulky pay off big for Wayfair. He perceives this as one space that Amazon is currently weak in and not eagerly looking to dominate. It’s also a space that takes more working capital than most FBA businesses to operate, therefore eliminating a lot of competition.
Uship reports that 22% of Americans have bought an oversized item online this year.
|Whether oversized shipping is your differentiator or you’ve already got an army of raving fans making repeat purchases, if you’ve “crossed the chasm” and are looking to sell your FBA business, send Chris an email. He mentioned in the podcast he’s happy to chat with anyone.|