[Crew Review] Selling? ’Cause someone’s buying

Gotta catch ’em all!

Companies, assemble!

Have you ever dreamed about going on vacation for months with millions of dollars in your bank account?

If you’re an Amazon third-party seller, you might achieve that this year. Just do what you’ve always been doing: sell.

But here’s the catch. It has to be your whole business.

Amazon accounts for almost 40 percent of all retail e-commerce sales in the United States, and private equity groups are taking advantage of this through rollups.

In case you’re familiar only with the food version of the term, a rollup is a business strategy where small companies are bought and merged. This is done in order to reduce the cost per unit by enlarging the scale of operation.

So who are these private equity groups targeting? Companies that focus on selling unbranded but well-reviewed products.

But of course, these investors don’t choose just any company. They’re looking for businesses who have the following:

• A significant number of five-star reviews
• Organic ranking
• High conversion rates
• Low returns

These acquisitions usually take much shorter than others, with some taking just days or a few weeks to complete.

Selling a business is something many 7-figure sellers have done. And with the growth of e-commerce, investors are hopeful about Amazon as a platform although history tells us that it often competes with its third-party sellers.

It’s blowing in the wind

If you’ve read last week’s edition of the Crew Review, you know that activists rallied against Amazon to stop its warehouse from being built in Fournes, France.

The e-commerce giant is not that well-received in Europe, but maybe its next move will help increase its popularity.

Amazon recently announced that it’s going to buy half of the energy produced by a wind farm in the Netherlands.

The farm will feature 69 wind turbines (I wonder who chose that number) and is the result of a joint venture between Shell and Eneco. It’s expected to start its operations in 2023.

This isn’t Amazon’s first green effort, and it definitely won’t be the last. The company aims to run on 100 percent renewable energy by 2025.

Making it big in the Land Down Under

From Europe, let’s move on to another part of the world—to a country whose capital is often mistaken to be Sydney.

Less than four years after its launch, Amazon.com.au has already reached $1.12 billion in yearly revenue in 2020. This number is about twice what it was in 2019.

There’s so much to celebrate about these numbers. But it’s also important to note that while Amazon Australia’s revenue has reached more than a billion, it’s actually in the red with a $3.8 million net loss.

However, this is much lower than its $4.7 million loss in 2019. So everything considered, this is a win for Amazon.

Amazon will continue expanding in Australia and has announced earlier in the week that they will build a new office in Adelaide.

From the streets to the table

Walmart is doing everything it can to rise above Amazon when it comes to online sales, but it seems like it’s about to lose in another category that it currently dominates—auto parts.

According to PYMNTS, Amazon’s auto parts sales continue to rise while that of Walmart has seen a decline. This further narrows the gap between the two giants in the category, with the market share spread coming at just 4.5 percent.

Walmart has also seen share decreases in other categories such as health and personal care, clothing and apparel, and sporting goods.

However, it’s still the king of food despite the decrease in its share in the said category. It seems like Amazon’s $13.7 billion acquisition of Whole Foods in 2017 has not dramatically paid off yet.

But there’s no reason to cry over that, especially after last quarter’s report had shown an Amazon segment blow past revenue from subscriptions. And as a seller, you are partially responsible for it.

How? Read on.

Other

Geekwire analyzed three main Amazon segments: AWS, Subscription, and Other. It found that the “Other” business segment surpassed the Subscription Services segment in the last quarter of 2020.

“Other” consists mostly of Amazon’s advertising business, which means sellers played a huge role in its numbers. It has jumped from a 40+ percent steady YoY increase to 64 percent in Q4 last year.

Revenue from sponsored ads is expected to increase in the coming quarters.

Right now, it still has a long way to go before it can dethrone AWS in terms of revenue, but with the latter facing a steady decrease, we may not need to wait that long.

If you’re not ready to throw in the towel

In one of our podcast episodes, we’ve talked about the freeing feeling that comes from selling your business. It does save you a lot of stress from the constant fear of having millions of dollars’ worth of assets just sitting inside an Amazon warehouse.

But if you aren’t ready to sell yet, you can increase your profits by decreasing costs caused by mistakes in importing.

Here’s a comprehensive book to teach you how. It’s free. Just pay for shipping.

Grab a copy.

Mid-quarter crisis

We’re in the middle of the first quarter of 2021. How’s your business doing?

Like most sellers, you might have promised yourself that this will be your best year yet.

E-commerce is growing. Amazon is growing. And we intend to do the same.

Be part of the Crew.