The Amazon aggregator market is rapidly expanding and becoming one of the top eCommerce opportunities for ambitious entrepreneurs. Nearly 80 businesses participate, and they’ve raised nearly $16 billion to date.

However, the expansive nature of Amazon brands means managing operations can be challenging as their aggregator. Some resign themselves to the overwhelm of multiple dashboards, strategies, and suppliers, but that doesn’t have to be the case.

In this post, we’ll uncover the top problems Amazon aggregators face while scaling and discuss managing Amazon aggregator fulfillment. We’ll also explain how MyFBAPrep can help you tackle these issues head-on for great returns.

Stressed out trying to manage multiple supply chains? Discover how MyFBAPrep simplifies operations for painless fulfillment.

Managing Amazon aggregator fulfillment: 8 Top challenges and how to overcome them

From attempting to replicate past successes to projecting each brand’s growth, growing a profitable business as an Amazon aggregator brings various obstacles.

1) No established fulfillment strategy

Every brand you add to your portfolio will usually possess legacy 3PL relationships, each with its own rules, procedures, and pricing (not to mention the fulfillment requirement methods needed, depending on the product).

Perhaps the eCommerce brand you’ve chosen started small with haphazard fulfillment, like impromptu post office runs and pickups from carriers.

That setup may have worked in the early stages, but as the brand scales, managing orders without official processes becomes increasingly difficult.

On the flip side, some aggregators pick brands that have been too proactive in their fulfillment setup; they use multiple carriers daily and miss out on the structure and deals gained from having one or two reliable shipping providers.

Even if your new brand contracts with only a single 3PL, their needs will become more complex over time.

You can quickly end up with an overwhelming number of fulfillment service contracts to manage. That’s multiple dashboards, invoices, and meetings to oversee per month, assuming there are no fulfillment hiccups.

This approach isn’t scalable and will drown you in admin instead of expanding your business.

To resolve these issues:

• Build one to three fulfillment strategies based on product category, weight, or size.
• Create an onboarding process to migrate new brands to an existing fulfillment solution as part of the purchase.
• Outsource all fulfillment tasks to one reliable, full-spec fulfillment provider.

2) You pay more for fulfillment than necessary

When your Amazon brands’ fulfillment channels and strategies are fragmented, it’s tougher to profit from economies of scale.

This setup can weaken your negotiating power as an aggregator and cost you favorable deals from carriers, warehouses, and 3PLs. Further, you’ll drag down your margins as you pay more for fulfillment services.

You can avoid overpaying for fulfillment by taking the following steps:

• Shop around for services and rely on criteria like quality and pricing to evaluate your options.
• Once you’ve allocated a fulfillment strategy for each brand, estimate a total order volume for all the brands under that specific strategy to establish your bargaining power.

3) Developing contingency plans becomes tricky

Having a disaster recovery plan is essential for every eCommerce business. However, it becomes more difficult to create contingencies for all brands in your portfolio when they each have different fulfillment strategies.

That setup can leave some businesses without a good backup plan, making your brand aggregation vulnerable.

To strengthen your investments’ positions:

• Group brands based on commonalities (e.g., products, categories, or territories) and create a backup plan for each one.
• Forge a relationship with another dependable 3PL as a fallback in the event your primary fulfillment service becomes inoperable.

4) Complexity breeds frustration

A plethora of fulfillment strategies and services increases the risk of costly mistakes and stressful work environments in your business.

Team morale and productivity can dip significantly, leading to damaging ripple effects like absenteeism and employee churn. You can minimize fulfillment complexity and save your personnel hassle by:

• Leaning on tech tools when possible (e.g., inventory management, creating POs, freight ordering)
• Streamlining products to as few fulfillment strategies as possible and keeping those in mind when adding brands to your portfolio
• Outsourcing manual fulfillment tasks like prep and packing to an experienced service provider

No need to wear multiple hats in your Amazon aggregator fulfillment. Team up with MyFBAPrep to simplify your logistics.

5) Buying the wrong brands

Some brand aggregators are distracted by “shiny” characteristics like great publicity and high revenue, while others fall prey to super-niche products that fail to yield a worthwhile return.

But that “cool” aesthetic hides items with small markets that can be difficult to scale and weak branding that diminishes the company’s perceived value.

In both scenarios, surface-level qualities lead aggregators astray and ultimately force them to course-correct by improving vital metrics like profits, ROI, and margin.

Investing in branding

A developed brand enjoys continuous sales and strong consumer loyalty. By establishing your name and credibility, shoppers will seek out your items among the vast catalog of other options to make repeat purchases.

So, propel your brands above their competitors by investing in assets like:

• Global trademarks
• Brand Registry
• A+ Content
• Sponsored Brand and Product ads
• Professional photos emulating the brand’s style
• Branded products and packaging

Prioritize profitability

When deciding whether or not to take an online store under your wing, it’s vital you make profitability a requirement for both the business and its products. Also, look for other telling traits like:

• Business age (must be at least one year)
• Solid sales volume year-round
• A handful of profitable SKUs
• Customer loyalty
• Growing brand presence
• Capital-generating opportunities within the brand
• Consistent sales on multiple selling channels

For example, an Amazon business could have high-ROI products, loyal customers, and consistent subscription revenue, but a costly fulfillment strategy would wipe away all the profits.

However, if you could make shipping cost-effective, you’d have a winner on your hands.

Tip:
If you’ve mistakenly bought an unprofitable brand, don’t panic. Look for ways to slash costs, increase perceived product value, and build recurring monthly revenue through subscriptions to turn the brand’s trajectory around.

Cutting your poorest performing stock, capitalizing on economies of scale for fulfillment, and optimizing inventory strategies are some of the easiest ways to do so.

6) Taking on difficult-to-market products

From having access to relevant territories to reaching your target customer, many factors go into successfully marketing an eCommerce product.

Some aggregators find themselves in hot water when they choose brands with offerings that are challenging to promote. Some issues that crop up include:

• Legal, regulatory, and cost-related issues
• Product(s) prohibited on specific advertising channels, which decreases the brand’s reach
• Selling seasonal or highly competitive items that cut brand visibility

Brand aggregators are more likely to be able to absorb these costs and risks, but that doesn’t make them a sound investment. If you have these types of brands in your portfolio:

• Look into streamlining legal and regulatory issues by ensuring proper packaging, warnings, and labeling up front.
• Minimize inventory and switch to Just-in-Time or similar inventory replenishment strategies to reduce warehousing costs for products that move slowly.
• Implement strategies to maintain better FBA restock limits for holiday periods, such as keeping your seasonal brand on the same account as a year-round one.

7) Lack of funding

eCommerce brands are notorious for being cash-intensive: Not only do you have to weather slow pay-outs from sales channels, you also need to cover large up-front investments in inventory, ongoing warehousing costs, etc.

It may also require significant cash injections to equip the brand to achieve your aggregator’s growth goals and exceed competitors’ offers.

A lack of cash may force you to settle for less effective strategies and processes, which hold your brand back from the success it’s capable of.

Finding capital

To grow as an aggregator, it’s recommended to leverage external capital to bridge cash flow shortages and increase your buying power.

Luckily, more alternative eCommerce funding options are now available to help you meet your ambitious business goals.

So, don’t settle for traditional options like bank and government loans, which can be inflexible and hard to obtain for eCommerce businesses. Instead, seek out a dedicated funding solution with criteria like:

• eCommerce expertise
• Fair rates and fees
• Simple application process
• Ample resources and readily available support
• Flexible rules on funding usage

8) Unprepared to navigate global supply chain issues

Shipping delays and supply chain issues continue to rock the globe, and the entire eCommerce industry continues to feel the effects. This problem has made it more difficult to obtain goods at a fast pace and without undermining profit margins.

Every business needs a strategy to get and stay in stock quickly and affordably. Failing to do so will diminish the customer experience, sales, and, ultimately, business growth.

Expand your horizons

Cross-border eCommerce is now a huge business, and taking advantage of this trend can strengthen your brand aggregator portfolio and supercharge growth.

In addition, looking further afield for potential brands to purchase reduces the risk of having all your eggs in one basket. So, if disaster strikes in one territory, your other brands stay operational and help offset any losses.

For example, if your aggregator portfolio consists of U.S.-based brands, look at up-and-coming businesses in Asia, Canada, Australia, the UK, and the EU.

Streamline supply chain operations

One of the best ways to save money, maximize sales opportunities, and boost profitability is to upgrade your brands’ supply chains. To ensure they run like clockwork, you’ll need to take a two-pronged approach.

Step 1: Conduct a supply chain assessment

Look at your brands’ supply chains and ask:

• Which steps aren’t essential?
• What is costing us the most money?
• Where are we wasting the most time?

Once you’ve identified unprofitable tasks in your brands’ supply chains, eliminate them or find ways to reduce or optimize them.

For example, after assessing your brands, you may discover you’re spending a lot of time on money labeling and packaging products with prep centers before shipping them to warehouses and Amazon.

To rectify this, you could ask your suppliers to complete these tasks during the manufacturing process.

Step 2: Optimize key contributors in your supply chain

Next, hone the critical areas in each supply chain to improve efficiency, productivity, and error rates. The major factors to tackle here are:

1. Technology:
   Adopt AI-backed solutions to optimize processes like inventory forecasting, PO creation, and freight bundling. Also, take advantage of these tools’ dashboards to identify potential threats as well as opportunities for each eCommerce brand in your ecosystem.
2. Fulfillment:
   Create one to three fulfillment strategies for specific product categories, types, or sizes, then assign items within your aggregator portfolio to them accordingly. Unifying the supply chains you oversee will save time and leverage economies of scale.

To make this shift without increasing your team’s workload, partner with a reliable fulfillment service house that can scale with your business and has affordable rates. (Be sure to maintain a relationship with another fulfillment provider as a backup).

3. Suppliers:
Audit suppliers to identify your top performers and consolidate production among them. Then, work with these suppliers to increase item quality, reduce production time, and lower product costs. Again, you’ll want to have backups in place in case something goes wrong with your main source.

How MyFBAPrep removes the hassle of fulfillment for Amazon aggregator

If you find yourself struggling to manage your Amazon brand aggregator’s fulfillment, the solution is simple: Team up with a reliable, experienced, and affordable prep and fulfillment provider. MyFBAPrep ticks all of these boxes and more.

Here’s how we can help you get ahead in the Amazon brand aggregator niche.

Agile fulfillment no matter your business size

Large eCommerce companies with a fixed fulfillment strategy can quickly lose flexibility as they scale. That rigidity makes it difficult to gain a competitive advantage from strategic positioning, like distributing stock across territories.

With MyFBAPrep, you can tap into multiple locations based on current market demand to enjoy maximum agility and boost your fulfillment’s profitability.

For example, our company has 85 million square feet across over 100 warehouses globally, which enables us to accept and prep your items as close to their final destination as possible.

In addition, MyFBAPrep provides access to the world’s best 3PLs that can scale with your brand, including SEKO, Ryder, and Maersk.

Typically, only brands clearing millions of orders per month can leverage this setup. MyFBAPrep processed $1 billion in GMV across four million units for our customers in 2023, so we can tap into those 3PLs.

With MyFBAPrep’s extensive client base and business network, we also secure economies of scale that bring game-changing deals to our merchants.

Simplify fulfillment to reclaim time

Another benefit we provide merchants is warehouse consolidation into one easy-to-control network. We’ll streamline your process down to a single invoice and dashboard, making it quick and painless to manage fulfillment while saving time and resources.

For instance, if you decide to maintain multiple 3PL partnerships, we can absorb and manage them within the MyFBAPrep ecosystem. You’ll also have the option to branch out to the big 3PL players to build a new, profitable supply chain.

Capitalize on our Amazon knowledge to gain a competitive edge

A lack of FBA expertise and experience can lead to costly mistakes for 3PLs. You could quickly find yourself with a hefty bill or, worse, without an Amazon account.

MyFBAPrep stays up to date on Amazon’s ever-changing rules and platform product requirements, from pallet type specifications to shipping box size limits and IPI score regulations.

We’ll keep your brands aligned with Amazon’s terms of service to prevent unnecessary headaches. Meanwhile, our processes and knowledge allow us to ship items into FBA quickly, maximizing selling time and avoiding stockouts.

High-quality fulfillment without breaking the bank

MyFBAPrep is on a mission to provide high-quality fulfillment services without eroding profit margins. We believe in keeping our processes and pricing simple and transparent.

Many aggregators expect three pages of invoices per 3PL, plus unexpected charges, but we do away with those hassles.

Specifically, we quote prep and fulfillment services based on only three factors:

1. How many cartons do you intend to send in per month? For example, for inspection, counting, or dock-to-stock?
2. What is the quantity of product you want to store in our warehouses?
3. How many cartons do you want us to send per month? For instance, outbound to Amazon and omnichannel fulfillment?

Spot growth opportunities with high-tech fulfillment

At MyFBAPrep, we understand the success of a supply chain relies heavily on the tools that operate it. That’s why we offer our trademarked solution, Preptopia®.

This solution takes the pressure off your team to reach growth targets for every brand within your aggregator. It provides that information for each one on a single, easy-to-read dashboard.

Preptopia® can help your Amazon brand aggregation move and stay ahead of the pack through advantages like:

• Understanding each brand’s inventory and order statuses
• Identifying scaling opportunities
• Calculating profits with ease
• Simplifying the process of sending goods to Amazon

Build a lucrative, headache-free Amazon aggregator

Whether you’re in the beginning stages of scaling as an Amazon brand aggregator or have many years under your belt, your fulfillment strategy is a defining factor of your success.

Construct a simplified ops strategy to handle every stage, from product manufacturing to fulfillment, so your business can support brand acquisitions at scale.

Build opportunity-spotting into your method of choice as well so your business always has the finances available to help it thrive. Soon, managing multiple supply chains and strategies will no longer feel like a juggling act.

Your team will instead have more time to focus on business scaling tasks so you can take the Amazon brand aggregator market by storm.

Don’t settle for chaotic fulfillment strategies and services. Build a winning ops strategy with MyFBAPrep.

Wrapping up — The secret to major Amazon aggregator wins

Scaling as an eCommerce brand aggregator is an exciting opportunity with huge potential for lucrative gains. But to build a business that’ll stand the test of time and produce sustainable returns, you need to be proactive.

Focus on profits and ensure you have the finances to develop each eCommerce brand’s reputation and sales.

Also, keep an eye out for rising online stores in other territories and look to acquire brands in specific product categories.

This makes it easier to streamline suppliers and logistical processes, and you can take advantage of higher total order volumes as well to secure better fulfillment prices.

From there, your brand aggregator enterprise will be on a solid trajectory toward consistent returns, higher margins, and massive growth.

Published: July 26, 2022
Updated: June 7, 2024