E364: The Controversy Behind the FBA Rollup Strategy

Between new COVID strains and Reddit revolutions, 2021 has been a crazy year—and we’re only barely a month in!

E-commerce is no exception to all this madness, as there seems to be a crazy trend of huge rollup companies gobbling up small Amazon FBA businesses. 

The rollup strategy is when a company looking to put its large capital to work merges and consolidates a bunch of small companies, aiming to make profits through economies of scale.

In this episode, Dave and I talk about how the rollup model works, its potential benefits to investors and to e-commerce sellers looking to exit, and the risks that come with it. 

Timestamps 

• The current trend of big investors rolling up Amazon businesses - 3:34
• Why Amazon is somewhat easy (even though it’s not) when it comes to running an e-commerce business - 5:20
• What multiple arbitrage is - 7:51
• The potential risks and rewards for rollup companies - 10:46
• Some possibly incorrect assumptions that rollup companies are making - 21:26
• Where COVID fits in all this - 28:26

There’s no telling which way this rollup trend goes, and it would be interesting to revisit this episode with Dave in a few years to see how right (or how off base) we were. For the meantime, stay ahead of the curve with our guide on How To Sell Your Ecommerce Company For Top Dollar.

Speaking of making the most out of your e-commerce business, don’t forget to sign up for our Import From China Like a Pro Webinar this February 17, 2021 at 10 AM (PST). In this free public webinar, we’ll be talking about how to find suppliers without getting scammed, staying ahead of the competition, and everything in between. 

Did you like this episode? Leave us a review over on iTunes so we can make more great content for e-commerce sellers.

Until the next one, happy selling!