Amazon third-party sellers M&A on the rise - Business Insider

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Some Amazon merchants are selling their businesses for more than $30 million as COVID-19 boosts the value of online retail: 'It's a seller's market'

Interest in buying and selling Amazon's third-party seller businesses is on the rise.

There are now a whole industry of buyers and brokers who are solely interested in deals for Amazon's third-party merchants.Idan Barzilay, an Amazon seller based in Tel Aviv, was disappointed when a potential buyer for his business walked away from a deal in late February, citing uncertainty and risks associated with COVID-19.

While some sellers on Amazon have struggled due to the coronavirus-related restrictions, those selling in certain categories, like toys or health, are thriving. These third-party merchants, who sell their own products or resell for other brands, have grown their pie on Amazon in recent years, and now account for over half of all products sold on the site . Amazon owns roughly 40% of the US e-commerce market.

The increased number of deals comes from buyers ranging from traditional investors, including private equity firms, to family offices and even Fortune 500 retailers, who are specifically looking to buy a bunch of Amazon sellers, Cabilly said. But some buyers caution the market has become more challenging due to COVID-19. Josh Silberstein, co-founder of, a company that bought 45 Amazon third-party sellers in the past two years, said the gap in expectations between buyers and sellers have widened as the pandemic has caused more uncertainty.

Industry data is sparse because many deals take place privately, but Woodmass has been publishing a monthly report about the market based on publicly available listings. According to his report, there were 134 listings worth over $500,000 in May, up from the 81 total listings two years ago. In May, 15 deals were signed, the highest number for any month since 2017. The median earnings multiple for pending deals also jumped to 3.7X in May, from March's 3.1X, and the 2.7X from May 2018.

 

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