🐞 Bug Millionaires on Amazon.com

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SUIT UP! WE’RE ABOUT TO SWIM IN THE SEA OF “Aha!” MOMENTS
  • 😥 Aggregator gold rush long over - now what?

  • 🏭 Alibaba ramps up image search for finding manufacturers

  • 💳 Using rebates to drive sales? Amazon Visa gift cards are best

  • 🤯 The AI tools for e-commerce you should know

  • 🕷️ Bug millionaires on Amazon.com

👙 I was once “sort of” an aggregator.

In the mid 1990s, before the internet took off, I made a lot of money selling baseball cards.

But not baseball cards with photos of Pete Rose or Roger Clemens.

These baseball cards featured images of girls with names like the Barbi Twins, Leeann Tweeden and the Texas Bikini Team (below).

Big business in the mid 1990’s selling trading cards

It was a huge business. All the comic book shops in the USA and Canada could not keep them in stock. An entire sub-industry of print magazines and directories emerged (and later AOL chatrooms) helping everyone keep up with all the new releases and card values.

We were the top rated company in the industry. We had the best photography, prettiest models, highest quality and great marketing.

We sold traditional foil packs, and we had cards with 24-karat gold replicas of the model’s signature encased in crystal. Every Christmas, we released a special edition signed and numbered card with Santa and a bikini model.

We mailed it to our customers for free as a thank-you (I saw one of these cards recently sell on eBay for $450). They absolutely loved it. We also did cards with a nostalgic Route 66 theme, fairies, angels and body painting.

Just like we do today on Amazon, our company and most every other company used product inserts. We would place an extra card in each pack that the buyer would physically mail in (remember, this was pre-internet) to try to win a prize, get discounts, etc.

I knew the value of a name and address. But the other 100+ companies didn’t. The cards that collectors sent in to them just got thrown into the proverbial shoe box.

So I reached out to all my competitors. I said I will have their insert cards transcribed and send a list of all the names and addresses on a floppy disk. The only thing I wanted in return was the right to mail my own offer to those names.

As a result, I built a massive list of pretty much everyone in the world interested in these types of trading cards.

Then I went back to all of the manufacturers and arranged to buy their products wholesale. I created a full-color glossy mail-order catalog called “The Pin-Up Factory” and sold millions of dollars of trading cards.

I operated a warehouse with 10 full-time employees taking orders over the phone, processing checks and shipping orders via UPS and USPS.

Aggregation can be a powerful strategy as long as those operating it know what they are doing. Unfortunately, as we see in today’s Billion Dollar Strategy, things can often go wrong.

But there is still massive opportunity.

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AGGREGATOR GOLD RUSH OVER - NOW WHAT?

The gold rush to launch and fund new aggregators has been over for 15 months, but the remaining players are pivoting, maturating or simply surviving.

Last week, Bentigao became the latest aggregator in a long line to declare bankruptcy with liabilities of $50-$100 million. They have 15 brands that sell over 300 products, including health supplements, office products and beauty items.

Earlier this summer SellerX acquired Elevate Brands to create a company with 80 Amazon brands, 40,000 products and a $431 million run rate.

The most famous aggregator, Thrasio, acquired more than 200 brands and raised more than $3.4 billion in funding before radically cutting back with layoffs and the departure of key executives.

Source: The Fortia Group Insights Report - July 2023

This Thursday in London, the eCommerce Acquiror Conference is happening with 20+ aggregators in attendance. Topics include “M&A amongst Aggregators” and “The future of the aggregation space.”

The Fortia Group’s Q2 2023 Quarterly Insights report dives deep into eCommerce brand valuations and is worth a gander.

Quietlght brokerage recently published a blog article called “The Rise and Fall of Amazon Aggregators: What It Means for Your FBA Exit Strategy.”

The article details the swift ascent and decline of Amazon aggregators and its implications for FBA sellers. As Amazon aggregators experienced a sharp increase, especially in 2021, they impacted the valuation of Amazon businesses.

However, the decline in their prominence has brought about challenges and changes in how Amazon business owners should strategize their exits.

Source: The Fortia Group Insights Report - July 2023

  • What went wrong for Amazon aggregators:

    • 2022 saw a return to brick-and-mortar shopping, though ecommerce still stayed above pre-pandemic levels.

    • Revenues decreased, competition rose, and Amazon seller fees increased, affecting profitability.

    • Aggregators began layoffs and mergers, and investments in them plummeted to $68 million by May 2023.

  • What You Need to Know to Successfully Sell Your Amazon Business in the Post-Amazon Aggregator Boom:

    • Amazon business valuation in 2023:

      • Valuations of Amazon businesses have dropped due to changing consumer trends and the retreat of aggregators.

      • Even with decreased valuations, successful exits are still achievable.

    • Who Is Buying Amazon Businesses in 2023?:

      • Despite the decline of aggregators, they only made up 30% of buyers at their peak.

      • Potential buyers include individuals and partnerships, private equity groups, and other businesses.

      • Strategic buyers look for businesses that align with their existing strategies, offering another pool of potential buyers.

  • Things You Need to Know to Navigate a Successful Amazon Exit:

    • Now is still a great time to sell: Current valuations are on par with historic standards, waiting for another 2021-like peak may be futile.

    • There is always a market for strong businesses: Focus on internal improvements to make the business more attractive.

    • Know how to position your business correctly: Highlight potential growth opportunities to stand out to potential buyers.

    • Find an experienced advisor and get a valuation: Engage a qualified business advisor to guide through the selling process, from valuation to final transfer.

      Quietlight will be in Kauai, Hawaii at the next Billion Dollar Seller Summit May 18-23, 2024.

      For those looking to sell in the next 12-24 months, BDSS and Northbound Group are hosting the Billion Dollar Exit Summit to help businesses achieve a maximum exit.

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💰 SPARE CHANGE immediate impact

Alibaba Adds Smart Assistant and Upgraded Image Search

Alibaba.com has introduced new features to assist small businesses in enhancing their sourcing and supply chain operations.

The updated platform now offers:

  • A smart assistant for order tracking and identifying new opportunities.

  • An advanced image search allowing simultaneous image and text-based product searches.

  • Predictive sentence completion and image generation for an easier request for quotation (RFQ) process.

  • Real-time translation in 17 languages during live video chats with suppliers.

  • A logistics marketplace with 24/7 customer service and B2B shipment tracking.

The goal of these features is to address the specific needs of small businesses, including risk mitigation, supply chain optimization, streamlined payment methods, and improved supplier communication.

Alibaba.com wants to be more than just a part of the supply chain, but also to be part of the "creation chain" for entrepreneurs.

🛒  MONEY NEVER SLEEPS → real products … real sales … real reviews

Newport Jerky Company Edible Zebra Tarantula

Consuming insects isn't a recent phenomenon. Many cultures value them as gourmet treats, offering them in numerous styles, from fried and grilled to candied and dried, through both street stalls and established eateries.

But you can also sample these multi-legged delicacies by simply heading over to Amazon.com. You’ll find cooked and dried insects, resulting in a crispy outer shell with minimal inner flesh. They provide an interesting mix of protein and novelty.

Turned off by tarantulas? No problem, Newport Jerky also does a brisk business selling other jerky’s, including scorpions, earthworms, chocolate covered grasshoppers, beetles, and crickets. They even have a trail mix and bug kebabs (yummy!).

Helium 10’s Xray tool shows 246 tarantula units are sold monthly for $9,837 in revenue - yep six-figures a year selling tarantulas on Amazon.

$85,000+ per month selling bug jerky on Amazon (that’s a bug millionaire).

🥃 PARTING SHOT

“The aim of the game is identifying what people need, and selling it back to them as what they want.”

✌🏼 Peace out. Holler at you again Thursday

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