FBA are the acronyms for Fulfillment by Amazona system or program that allows anyone in the world. This system was launched in 2006, with the aim that any company could easily use this marketplace as a showcase to sell their products, without worrying about logistics, from product storage, returns, to customer service. to the client.
Specifically, the FBA service groups all these tasks:
- Delivery of the goods by the merchant
- Packaging and labeling of articles
- Distribution of the products to the different FBA warehouses
- Placement in warehouses and possible transfer of stocks
- Pick, pack and label
- Returns Management
- Scan and post all movements of goods/stock
At first, it was brand distributors or resellers who benefited from this program. Subsequently, it was the already consolidated brands that began to sell directly through this channel.
Niche hunters on Amazon FBA
However, in recent years, the marketplace has witnessed the arrival of a new wave of entrepreneurs “niche hunters”. Sellers of products, based on brands conceived to be distributed directly on Amazon, who establish themselves in empty market niches becoming leaders in them.
Throughout the year 2020 approximately 4,200 sellers signed up for Amazon FBA per day. Joining more than 9.3 million sellers registered in Amazon FBA, of which 2.5 million are active sellers. To give visibility to the magnitude of this business, already in 2019the reference site of the Amazon FBA universe, published that there are more than 24,000 sellers worldwide that invoice more than $1M.
At the end of last year,. Taking these data into account, several companies around the world have joined the idea to buy and improve these Amazon businesses, since, in 85% of cases, Amazon FBA sellers have a profitable business, but with a lack of resources: few people, little infrastructure, and few economic resources to withstand the demands of selling such quantities with such little structure.
The benchmark in the category for funds raised is. That began its operations in 2018 and is focused on buying businesses of this type in the United States, although it has already begun to acquire “sellers” both in Germany and in the UK at the end of 2020. Other European examples would be companies such as Yfocused on the German market or in UK.
Yaba, the Spanish company dedicated to buying Amazon FBA businesses
offers this type of services in Spain. It was founded by youths entrepreneurs in the technological world that are not only dedicated to the purchase of European Amazon FBA businesses, but also, and in the case of those FBA sellers who do not want to sell 100% of their business, it enables the seller to access financing so that they continue doing grow your business before taking the step to sell it.
David Bartech, CEO of Yaba, told us how, in his opinion, the key to a successful business on Amazon FBA is focus. To have, first of all, a short catalogue, easy to manage and control. Second, keep product costs under control by having a good relationship with your supplier or manufacturer. «If you want to go fast you have to go alone, but if you want to go far, it is better to do it accompanied. And if you want to minimize the risk and that your product source does not let you down, you should build a good relationship with it.«. Finally, you should always seek to sell differential and differentiated products, always trying to avoid price fights, where the only one who wins is the supplier or Amazon.
Something big is happening around the Amazon marketplace, and it seems that many sellers will finally be able to see a way out of so many years of efforts in the form of a sale.
How did the idea of creating Yaba come about?
as he told us David Bartech: «i know Ruben Ferreiro for many years: he was one of my first investors in Ulabox. One day Rubén came to me with an idea and his face was shaken: «David, I can’t sleep a wink, look at this». Ferreiro told Baratech about a company, from the United States, that what they did was buy Amazon sellers, one after another, and give them scale. David immediately recognized that it was Thras.io. I knew them because, a few months ago, Albert Armengol had happened to him that talked about the idea of buying small (and not so small) profitable Amazon sellers. said post «It emphasized the idea that the business hypothesis had already been validated and that, therefore, these businesses entailed less financial risk, although not for that reason operational, since these companies had to be scaled if what you wanted was to make them big»
David Baratech continued this story by explaining how Rubén Ferreiro sold him very well on the idea of the project to set up a team with him, thanks to his experience in the world of marketing. Over the next few days he gave the idea a lot of thought, thinking about «not buy one but 100 companies, leveraging them to streamline the M&A operation, mechanize and order all their processes, remove them from Amazon to take them to other marketplaces and diversify the risk, generate a product laboratory where to develop and launch the product with an execution of “. That is, build aProcter & Gamble from the digital, but without giving up the offline».
A few weeks later, with three other entrepreneurs, with extensive experience in both eCommerce and M&A, they founded the company and are already immersed, closing the first acquisitions.
How to work with Yaba?
The process to start a project with Yaba, it is simple, fast and transparent. It consists of four steps:
- Sell or grow? In this first step you must make a decision. Let’s imagine that you have been investing great efforts in your Amazon business for some time, but that your resources are limited. Well, you should ask yourself what you would like to do. Selling can be a good reward for all the effort invested. But if this idea does not convince you, because you are very excited about the project, you should indicate it and they will help you make the best decision.
- Revision. Whatever your decision, sell or grow, Yaba professionals will help you value it. The next step will be the request, on their part, of more information so that they can make you an offer. Some of the questions they may ask you will be: How much do you bill? What margin do you have? Where do you buy the products? How much stock do you currently have and where?
- Offer. With all this information compiled, the professionals will value it and make you a offer in 48 hours.
- Closing. In this last step, all the legal documents will be formalized. Once signed, either the sale or the formalization of aid, for the growth of the business, will be official. Next, it will be necessary to carry out the migration process of the seller account in Amazon (or the marketplace in which you operate) to Yaba in case of sale.
Objective and equipment
The professionals in charge of providing these services are highly qualified professionals in the sector: co-CEO of Yaba; Chief Technology Officer (CTO); , Chief Financial Officer (CFO); Y President.
The objective that they set for themselves, at this start of the project, is to acquire around 20 brands in the first year, demonstrate that they can scale them, and build a top-level team. «Everything else we will build as we go» stated David Baratech.
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