Do You Plan To Sell Your Amazon Business?
Last week we talked about delaying Prime day and whether this holiday was good for small businesses at all.
Early numbers are in and unsurprisingly stats like spend per household and spend per order are both down more than 20%.
With that said, even in this uncertain retail climate, there is still an appetite for profitable Amazon businesses.
Yesterday, a company called Perch that owns and operates more than 10 profitable brands raised $123.5M with the goal of expanding that portfolio to 50.
If you are planning to eventually sell your brand the private equity market might be hard to ignore.
Every couple of weeks there is a new story like Lennox and their tableware brands including Dansk and Reed & Barton selling to private equity.
With third-party sellers reportedly making up $200B of the $350B GMV that was processed through Amazon in 2019 it’s no wonder these deals are happening so frequently.
So what does it take to get one of these 7 or 8 figure acquisition deals?
An executive at Perch was quoted saying, “products need to have a proven track record of product-market fit, as evidenced through at least 18-24 months of profitable sales, great customer reviews, low return rate, no evidence of consistent product quality issues, and a trademarked brand that is recognized and enforced by their channel partners / marketplaces”.
This person goes on to say that while they do have brands doing sales through their own website the vast majority of their focus on is on the marketplace and he expects that to continue for the near future.
If you’re already well on your way to selling your business I congratulate you!
If you’re still building that 24-month+ track record of sales growth I’d love to hear more about your company and whether I can help.