When the term Mergers and Acquisitions is mentioned, many people often think of large conglomerates or Wall Street companies with long years of experience. They may picture suit and tie grey-heads with lawyers in a conference room inking out a deal to be announced. The conglomerate is about to buy out the little man, and someone is about to get rich. In recent times, however, this has changed. With improvements in technology and the proliferation of eCommerce platforms like Amazon, M&A no longer belongs only to the “big guys.”
For Chairman and President of the Pearl West Group, Jason Kwan, mergers and acquisitions are the order of the day. The company, which was formed as a strategic acquirer of Amazon brands, has grown into a force to be reckoned with. The concept of M&A in Amazon brands is not novel. However, there some who may not know how to get started. Jason Kwan shares his blueprint for creating an Amazon M&A company.
Get to Understand Amazon Businesses
If you are not already an Amazon third-party reseller, then you may want to do some research to understand the nuances involved. This will put you in a better position to grow the brands you intend to acquire. “Our competitive advantage is that we started as owner-operators of these types of businesses. There’s been a lot of attention on new people coming into the space with the same thesis of buying and aggregating Amazon brands, but we’ve been in the Amazon space for over three years,” shared Kwan. He highlighted that there is a vast learning curve when it comes to operating Amazon businesses, and there can be frustration and headaches that an unprepared company may be unable to face.
Create Proper Systems for Optimization
Even when a Wall Street conglomerate completes an acquisition, they have checks and balances to ensure the transaction will be beneficial. If you plan to get started in the Amazon M&A arena, then you will also need to implement proper systems. According to Kwan, “doing anything at scale is a real change, so we’ve created the proper systems to help with that.”
His team has put together necessary checklists to optimize the brands once the acquisition is complete. “We look at everything from optimizing the supply chain, improving pay-per-click performance, new facelifts for the product, keyword ranking, international presence, branding, optimizing the listing quality, and much more. We essentially build a road map for the brand and rebuild things from scratch if necessary.”
Make It Easy for Companies to Sell to You
If you’ve ever watched the movie, ‘Pretty Woman’, then you may remember how Alex Hyde-White and Ralph Bellamy, who played David Morse and James Morse respectively, made it difficult for Richard Gere’s character to acquire their company. That’s because they didn’t trust him. In an Amazon M&A, third-party sellers must trust you. “We want to make it as easy as possible for the business owners that want to sell. It can be challenging for any seller to have to sell their business, and we try to make it as frictionless as possible, and more importantly, we try to make it as pleasant and fun as possible. We are continually building that trust that we can optimize the brand more than the competition can so the seller can have a bigger earn-out.”
These are just a few tips to get started in the Amazon M&A space.