The Amazon marketplace is currently valued at $300B with potential to double in the next 5 years.
Amazon merchants make prime acquisition targets
Amazon’s marketplace has an estimated 5+ million sellers and here's 3 big reasons investors love them:
- There is a strong relationship between Amazon and the customers and Amazon is likely to keep growing market share with them.
- Warehousing and shipping is all handled by Amazon, which allows roll-ups to quickly cut costs and boost profits by consolidating supply lines.
- Negotiating better deals with Amazon is possible with enough brands under a roll-up paving the way for better prices or personalized service.
Some companies now involved in Amazon roll-ups started as sellers and therefore understand what it takes to grow an Amazon marketplace brand along with being able to relate to their acquisition targets.
Some other roll-ups focus on specific product categories but with others their strategy is different, for example, having a preference for businesses with patents.
The roll-up market is crowding fast
More competition and more bidders naturally lends itself to bigger deals which is great news for Amazon merchants, but for roll-ups differentiation will be key.
Watch as the roll-up market gains steam - if this is your area of expertise, take note!
Investors are rolling up Amazon stores. And making a killing. The Amazon marketplace is currently valued at $300B with potential to double in the next 5 years.