With the eCommerce market booming, it is one of the best times to be an eCommerce brand owner in India. However, many brand owners aren’t equipped with the necessary resources to completely fulfill their brands’ growth potential. In many cases, Amazon sellers have the motivation and imagination to create a new product, introduce it, and build it on the marketplace. But as their company grows, they often find that they need a very different range of skills to carry revenue and earnings to take the brand to the next level. Restocking and distribution are points of contention, promotional prices fail to fall, and efforts to outsource exacerbate the situation.
This is a typical problem for business owners. They achieve traction but then hit a snag and find it difficult to expand the market. They are sitting on something that constitutes a significant portion of their net worth, but it is surrounded by confusion and risk. Can they remain small, expand, or go public? The latter choice, receiving a huge amount of money and walking away, is a dream for many Amazon sellers.
While the number of third parties is ever-increasing, an interesting business model has come into the picture – the eCommerce marketplace roll-up play. eCommerce roll-up companies acquire eCommerce brands from eCommerce sellers, usually in exchange for a lump sum cash payment and, in some cases, potential profit-based bonuses. Since these companies operate several brands rather than a single brand, they get to leverage mutual learnings, economies of scale, and deep optimizations in promotions, listings, and supply chain to expand the company at a pace much faster than it’d have normally grown.
Ultimately, this allows company owners to have a financially lucrative exit from selling their products, enabling them to go on to new ventures/investment opportunities and also assisting the business to grow even larger, much quicker.
Meet India’s First eCommerce Roll-up Business: Powerhouse91
Gurgaon-based Powerhouse91 was founded with a single mission: to help eCommerce brands grow according to their true potential. Powerhouse91 is India’s largest and earliest movers to acquire brands on the eCommerce marketplace, promising more economies of scale to handle and expand brands. With a combined experience of more than 30 years in eCommerce, the team at Powerhouse91 has developed deep expertise areas like Marketing, Technology, and Supply Chain to help skyrocket any acquired brand’s growth.
In a sense, Powerhouse91 is building something like a Unilever or P&G of the eCommerce industry. Funded by Titan Capital, the company is currently in the process of acquiring 20 brands across 14 categories ranging from health & personal care to tools & home decor. Powerhouse91’s process is Simple, Transparent & Fast Process and their deals usually close between 6-8 weeks.
Is your brand suitable for Powerhouse91?
Powerhouse91 seeks brands that have primarily sold through eCommerce marketplaces like Amazon and Flipkart, with most of their revenue from these channels.
The company is interested in acquiring brands with category-winning products, excellent reviews and ratings, and high organic search rankings for relevant keywords. The ideal products are potentially private labeled goods that have a stable demand. Products that are faddy or have very short-lived demand are probably not suited to Powerhouse91’s thesis.
Good profitable businesses with healthy margins are the most attractive brands for businesses like Powerhouse91.
What to expect when dealing with Powerhouse91
Sellers should expect a straightforward, fast, and upfront process. Expectations are well defined in terms of what Powerhouse91 requires, when it needs it, what it can do, and what sellers may expect from the team. Powerhouse91 cares for marketplace vendors and is constantly focused on helping the Amazon ecosystem grow.
The process includes a mutual introduction, sharing the relevant information, initial evaluation based on business metrics, sharing the letter of intent, and closing plus necessary transfers after due diligence. The company is known for its quick decision-making, ensuring that the owner has to invest the least amount of time to get a complete picture of their brand’s valuation and deal structure.
Why sell your brand?
Owners can have a variety of reasons to sell. Increasing competition, worrisome marketplace tactics, need for cash-in-hand amidst uncertainty, or just a desire to move on to other things in life.
Often, even in a profit-generating business, only a limited portion of earnings that brand owners get to take home because most of the profit has to be reinvested in just operating and growing the business.
What businesses like Powerhouse91 do is offer multiple years of profit in one go and an opportunity to share profits as your brand grows exponentially. Essentially, this helps the brand owners get a financially rewarding exit for all the hard work they’ve put in to grow their brand from scratch.
If you own a brand and want to explore the next steps for your brand or take it to the next level while making a lucrative cash exit, Powerhouse91 is the company for you. You can also get your brand assessed for free by reaching out to them at [email protected] or filling the ‘contact us’ form on their website www.powerhouse91.com.