My Amazon Guy Quiet Light vs Amazon Aggregators - How to Negotiate with an FBA Acquirer
Full list of all Amazon Aggregators: https://myamazonguy.com/amazon-aggregators-fba-acquirers/
HOW TO NEGOTIATE WITH AN AGGREGATOR
Joe Valley join us This week on My Amazon Guy to share how to negotiate with an aggregator.
“Price it right and you will get more buyers looking at it possible multiple offers and you will get to choose your offer. Not always about the dollar amount, it often about the dollar amount and the deal structure.” -Joe Valley
Joe Valley knows the 3 Things Aggregators work for and shares the power of “No, but-“.
0:00 Intro
6:45 - THE 3 THINGS AGGREGATORS WORK FOR:
7:13 - Working capital peg on the inventory
11:04 - Hold back
19:08 - Earn Out
22:55 - GENERAL SELLING TIPS & HOW ELSE TO MAKE MONEY?
Joe Valley says that people should get the value they deserve.
31:04 – IS A MASTERMIND AN ADD BACK?
Yes.
Thank you for tuning in with My Amazon Guy & Joe Valley!
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How to negotiate with an aggregator
Funded in 2007.
3 Things Aggregators work for:
Working capital peg
Aggregators seek 2 months of inventory
No, but - a 3 month seller note
Landed cost of goods sold
Hold back
Might have been invented by Thrasio
Money set aside if the business falls off a cliff.
10-25% released in 12 months if the revenue remains 90% of what it was at time of closing
Recommend sliding scale
Negotiate view access to keep eye on things
In the event if they run out of inventory, out of X period, you get paid for.
How are they going to manage it?
May need an agency (Shameless plug My Amazon Guy!)
Earn out
Aggregator goal is to pay less up front and pay on an earn out.
Being dubbed as a “profit sharing plan” - % of a gross profit of the business.
Needs to be on top line revenue. Not EIBTA (Never do it on EIBTA).
When first doing a deal, and courting, and things are good.
General selling tips
How to avoid ignorance discount
Never work with just one
Price it right
Get the dollar amount and deal structure correct
SDE - Seller Discretionary Earnings.
How else to make money?
Calculate cash back on credit cards
Plan to sell, not sell to plan
Raised prices on Top Seller by $4. Let to $4,000 in increased profit. We did an adjustment in the add back schedule. Took total number of units sold x $4. Get a 3x multiple of $75,000. It gets missed. An aggregator won’t tell you about that.
Is a mastermind an add back?
Yes.
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