Building a $100 Million Amazon FBA Portfolio
Updated on March 16, 2020
We’ve all heard this famous Wayne Gretzky quote: “Skate to where the puck is going, not where it has been.” This advice applies to a lot of situations, not just hockey.
In business, success depends on being able to see where trends are headed and opportunities lie. Good instincts are needed to know where to look and what to look for, but if your insights are accurate, then your rise to the top can be swift.
The Move to Amazon
Identifying trends is in the DNA of Thrasio founders Joshua Silberstein and Carlos Cashman. After speaking with multiple successful business owners, all signs were pointing towards Amazon. They repeatedly heard first-hand experiences from people that were absolutely “crushing it” on Amazon.
The founders had a hunch that Amazon was going to be the next big thing in e-commerce, and they were right. Today, Thrasio is the largest acquirer of Amazon FBA (Fulfillment by Amazon) businesses, obtaining two to three brands each month. Many of those brands have been purchased from our marketplace, and as of this publication date, Thrasio has bought approximately $10 million in businesses from us.
Thrasio started entirely from scratch and now owns 25 FBA businesses. What’s even more impressive is that all of their acquisitions have taken place in the past 15 months.
John Hefter, Thrasio’s Director of Brand Strategy and Creative, freely admits that no one at the company had any experience buying Amazon businesses before they decided to adopt this strategy: “We didn’t know how to buy an Amazon business when we were first looking.”
Once Thrasio’s founders pivoted to buying Amazon FBA businesses, they quickly discerned their mission: to become the largest and most profitable seller on Amazon.
Today, they have more than 1,000 best-selling products on Amazon across several different categories. Their portfolio currently has $100 million in committed capital and is continuing to grow fast. Thrasio’s top niches include household goods, pet products, fitness equipment, and baby products. If you’ve shopped for these types of items on Amazon recently, there’s a good chance that you might have bought from Thrasio.
A Profitable Partnership
Before any of these deals could happen, however, the team at Thrasio first had to figure out how to buy an Amazon FBA business. To find the answer, they turned to Google to begin the discovery process. A quick search led them to us, and the rest, as they say, is history.
Starting from zero and scaling to 25 successful brands in just over one year is an impressive feat, and Thrasio has developed a reliable system for identifying the businesses that are a good fit for their portfolio.
They quickly understood that the process of acquiring an Amazon FBA business is different from acquiring a traditional business. Hefter explains: “Often, you’re not buying a brick and mortar asset, something that’s tangible, that you can really hold. You’re buying an idea that’s executed well, or you’re buying a process that works.” He adds, “It can be hard to determine what’s real.”
To ensure that they’re making solid investments, the team at Thrasio first validates that the businesses are viable, which is where we step in to help. The Thrasio team says, “They [Empire Flippers] do a really good job of understanding the market and understanding pricing in the market. Working with Empire Flippers has been an integral piece in what we’re building here.”
The validation process includes getting thorough and accurate financial data about the company that’s being targeted for acquisition. In addition to requiring this information, Thrasio also needs a partner than can act quickly. The process of finding a potential company to buy, evaluating it for fit, and closing the deal all happens within a couple of weeks.
The Future is Limitless
Thrasio plans on continuing their “insanely fast” scaling, and the team is optimistic about the future. Hefter says, “Whenever we have an Empire deal, I know that things are going to go relatively smoothly.” He continues, “The communication is good between the seller, our diligence team, and our legal team. Overall, the process is streamlined.”
Because Hefter aims to maintain this pace of acquisition for years to come, he stresses the importance of working with a broker that has a long-term vision: “My experience with Empire Flippers is they’re playing the long-term game. They really care about doing business the right way.”
Are you interested in acquiring an online business and building your own portfolio? Feel free to schedule a free buyer consultation by clicking here.
