Amazon seller acquisitions saw a significant drop in 2022 and 2023, valuations dipped and the secondaries of one of the largest Amazon FBA aggregators are trading at an 80%+ discount. Let’s take a closer look at the e-com rollercoaster ๐ข
๐ 2022 Acquisitions & Multiples: A Sharp Decrease
The number of acquisitions has declined 20%+ compared to 2021. Valuations went from 4-5x SDE in 2021 to 3-4x in 2022 to currently 2-3x.
๐ค More Buyers, Fewer Aggregators
While some Amazon aggregators paused buying, other players entered the market. This diversification includes strategic players and private equity funds investing in online native brands.
๐ฐ๏ธ Longer Buying Process
Buyers became more selective and cautious, resulting in longer due diligence processes. Some performance earn-outs were not paid due to the aggregator’s inability to grow the acquired business.
๐ธ Funding Craze Calms Down
In 2022, aggregators raised $2.7 billion, a 78% drop from $12.3 billion in 2021. Most of this capital came in the form of debt, with much of it yet to be deployed.
๐คทโโ๏ธ Aggregator Consolidation Yet to Happen
Despite some aggregators seeking acquisitions (e.g. SellerX + KW Commerce) or looking to acquire smaller players, consolidation hasn’t materialized. Economies of scale and better financing terms are potential benefits.
๐ฎ 2023 Outlook: The Landscape Continues to Evolve
Amazon FBA businesses as an asset class retain their potential for long-term value, despite huge fluctuations. I’ll expect a strong rebound as soon as macroeconomic indicators improve.
As a strategic buyer, now might be the perfect opportunity to enter the space with multiples at a historic low.
Fueled by GPT, e-commerce companies with a true tech-enabled approach – not only claim – will maximize returns in this ever-evolving space. ๐