In 2021, the hottest topic in cross-border e-commerce was undoubtedly "Amazon store acquisitions." Overnight, Amazon aggregators seemed to possess the Midas touch, wielding massive capital to scout for premium stores while promising sellers a golden exit. Yet within just one year, this frenzy cooled dramatically. Was this merely a fleeting bubble, or an inevitable market correction? How should sellers adapt to this shift and seize new opportunities?
From Darling to Outcast: The Boom and Bust of Amazon Aggregators
Amazon aggregators were the undisputed stars of cross-border e-commerce in 2021. With funding rounds routinely reaching hundreds of millions, these "acquisition enthusiasts" embarked on a global shopping spree for Amazon stores. Industry leader Thrasio, at its peak, acquired an average of over ten stores or brands monthly. Chinese sellers, as major players on Amazon, became prime targets. Overnight success stories proliferated as sellers flaunted acquisition offers, dreaming of instant wealth and early retirement.
The euphoria was short-lived. By 2022, aggregators' fortunes reversed sharply. Funding plummeted, acquisitions slowed, and valuations contracted. Data reveals aggregators raised approximately $2.2 billion in the first half of 2022, with annual totals reaching just $2.8 billion—a stark contrast to $5.1 billion and $12.3 billion during comparable 2021 periods. The number of aggregators announcing new funding dropped from nearly forty in 2021 to fourteen in 2022. More tellingly, layoffs swept the sector, with Thrasio cutting 20% of its workforce in May 2022.
Funding Droughts and Operational Quagmires: The Challenges Facing Aggregators
This dramatic reversal stems from both external pressures and inherent business model limitations.
External Factors: Pandemic Winds Shift, Capital Markets Cool
The e-commerce boom during lockdowns attracted massive investment, enabling aggregators to raise funds effortlessly. Amazon sellers similarly rode this wave to record growth. However, as Western economies reopened, offline consumption rebounded while inflation and geopolitical tensions eroded consumer confidence. With e-commerce growth projections uncertain, investors turned cautious—directly triggering aggregators' funding crisis.
Internal Weaknesses: Multibrand Growing Pains and Regulatory Gaps
Most aggregators rely entirely on raised capital for acquisitions. When funding dried up, some resorted to debt financing. More critically, many failed to grow acquired brands post-purchase, often requiring original sellers to manage inventory and advertising to meet targets—exposing operational deficiencies.
The sector's youth compounds these challenges. Among the top twenty aggregators by funding, thirteen launched in 2020 or 2021. Even experienced Amazon operators struggle with multibrand complexities: SEO, product marketing, and supply chain management become exponentially harder across diverse categories. Smaller aggregators exacerbated trust issues through questionable practices—inflating initial offers only to renegotiate terms later, or delaying final payments.
Pathways Forward: The Evolving Future of Amazon Acquisitions
Confronting these headwinds, aggregators are pivoting strategically.
Operational Overhaul: From Buying to Building
Many now prioritize nurturing existing portfolios over new acquisitions. U.S.-based Perch, having raised $900 million, reportedly paused acquisitions in late 2022 to focus on brand development. Similarly, Thrasio gutted its acquisition teams to concentrate on owned brands—signaling industry recognition that sustainable growth requires operational excellence, not just deal volume.
Smarter Purchasing: Selectivity and Diversification
Remaining buyers conduct deeper due diligence, abandoning early "growth at all costs" approaches. Sector reports indicate retreats from low-margin categories like apparel and electronics toward evergreen products with higher profitability—particularly outdoor gear, baby supplies, and pet products that thrived during lockdowns. Some now specialize in vertical niches. Others expand beyond Amazon, targeting direct-to-consumer (DTC) brands and independent stores where premium pricing opportunities abound.
Market Consolidation: Survival of the Fittest
Industry observers anticipate aggregator mergers as weaker players seek exits while stronger ones pursue scale advantages. Though no major deals have materialized, consolidation could improve financing terms and operational efficiencies—accelerating a shakeout where only the most capable survive.
Local Challengers: China's Homegrown Aggregators
While Western firms dominate, Chinese aggregators like Nebula Brands (founded 2019, $100 million+ raised) leverage local advantages—better seller communication, supply chain expertise, and cultural alignment. Unlike Western peers prioritizing rapid acquisitions, Nebula emphasizes post-purchase growth, reporting 10x year-over-year sales surges for some brands during Prime Day 2022. Their model fosters deeper collaboration, with former sellers often contributing to other brands' product development—creating mutual value.
Strategic Imperatives for Sellers: Maximizing Value in a Shifting Landscape
To navigate this evolving market, sellers should consider:
- Operational Excellence: Strong products, efficient teams, and loyal customers ensure negotiating leverage regardless of market conditions.
- Channel Diversification: Reducing Amazon dependence through DTC channels or social commerce builds resilience.
- Prudent Partnerships: Evaluate aggregators' financial health, operational capabilities, and track record—not just offer prices.
- Market Awareness: Stay informed about acquisition trends to time exits or partnerships strategically.
The aggregator phenomenon mirrors broader e-commerce dynamics—no business model remains perpetually viable without adaptation. For sellers, success lies in balancing opportunistic exits with long-term brand building.