GeekWire Podcast Recap: Inside the booming market for buying Amazon sellers: Insights from our co-CEO and founder Ruben Amar
Our co-CEO and founder, Ruben Amar, sat down with John Cook, GeekWire’s co-founder, to talk about the Amazon seller landscape, share his expert opinions, and explain what makes Forum successful. Below are three key takeaways from Ruben’s appearance. Be sure to listen to the full podcast here.
Experience and Technology Set Operators Apart
As this industry progresses, buyers are realizing more and more how difficult it is to operate these businesses. The only way to manage a very large online, multi-channel consumer business at scale is if you have a stellar technology platform that fuels everything you do, from the moment you acquire this Amazon-only brand, to the moment you sell through all the e-commerce channels that are available around the world. It is also critical to uncover any black hat tactics or operational hazards that would put you at risk post-acquisition. This is where our technology plays a key role in executing proper due diligence to expose these tactics, zero in on high-caliber deals, and close strategic deals quickly. We employ tools that scan a company’s reviews, evaluate in detail the P&Ls of these brands, review the trademark registries, and assess any Amazon violations in the past couple of years. Our technology can find out everything ahead of a sale.
Our team’s extensive expertise includes managing 9-figure Amazon P&Ls, advising the world’s most significant CPGs, and executing more than 45 M&A transactions. Our co-founder Alex Kopco has seven years of experience at Target and Amazon, and built some of the tools that millions of FBA sellers are using today to manage their brands on Amazon Seller Central.
The combination of our background as investors doing diligence, our Amazon experience, and the Technology team leads to a very detailed diligence process that we do in approximately 30 days, between the day we sign and the day we wire the money. This allows us to scan everything about the brand and protect ourselves from things like black hat tactics. We know how challenging and important it is to have a very clean, safe, and robust brand that operates on Amazon.
Sellers Care Deeply About the Brands They Have Built
What’s interesting about these competitive acquisitions is that the highest bid is not always the winning bid. People tend to forget that the brand these sellers have built is like their baby. The majority of FBA business owners are not spending 100% of their time operating these brands. Sellers often start brands for extra income, oftentimes to pay down student loans and mortgages, start new projects, or build a new house.
What the brand means to some sellers is as important, if not more important, as the exit multiple or the dollar value to their account.
Our success in these very competitive deals comes by showing sellers that with Forum, they get the team and the technology that will take the brand to the next level. One day they will be able to find the brand that they built six, seven+ years ago and tell their family, “Hey, I built this brand.”
It Is Day 0 of a Multi-Billion Dollar Opportunity
In 2020, Amazon generated $475B of GMV (gross merchandise value), with 63% of that coming from third-party sellers. That means millions and millions of small entrepreneurs worldwide are selling products that billions of people around the world are buying online, thanks to the FBA system and platform that Amazon has built. The space is so enormous and so untapped that there's room for many winners in this space. It seems like many players are doing the same thing, but eventually, and very quickly, companies will have to separate from the pack with their own strategy. Our strategy for success is to have the best people in every single step of the value chain.
Success comes only when you have people that are excellent at what they do, and feel that they are part of a big mission. When you recruit five or ten new people every month, it’s not easy to do. However, at Forum, we spend so much time and effort every day to be able to build an environment that attracts the best talent to stand out from the rest. We believe that’s the way to be one of the winners in this ecosystem.
For more insights from Ruben’s interview, listen to the interview here:
https://www.geekwire.com/2021/inside-booming-market-buying-amazon-sellers-secrets-insights-acquirer/
