Signals #31 – Rolling up FBAs


This week, we’re talking about roll-up companies that focus on buying third-party sellers in the Amazon FBA (Fulfilled by Amazon) ecosystem. These roll-up companies like Thrasio, Heroes, and Perch, target businesses on Amazon doing half a million and up in revenue per year. The roll-up companies then improve copy, run analytics, determine pricing, and bring economies of scale to the acquired businesses to increase net cashflow. Surprisingly successful, roll-up companies have raised record amounts of VC and debt-equity as they consume more and more FBA businesses. In this issue, I talk about why these roll-up companies exist, opportunities for smaller entrepreneurs, and a couple of interesting business case studies in the market. Enjoy!


Before we understand the roll-up companies, we need to first talk about what FBA (Fulfilled by Amazon) means. The best way to describe FBA is that it’s a warehouse as a service. Amazon will take care of storing, packing, and shipping orders and handling returns and exchanges. For the merchant, FBA means that they only need to focus on two things, finding customers on Amazon and making the product.

FBA has also translated into a new type of opportunity for roll-up companies. Now, when buying a business that’s doing half a million per year in revenue, roll-up companies only need to focus on understanding the supply chain (production) and customer acquisition on Amazon. These companies no longer need to worry about warehousing, shipping, and all the other costs that come with operations.

Previously, a consumer goods business would need a unique formula, distribution establishment, and significant brand power to be considered for acquisition. It could even be argued that once a consumer goods business got to a certain scale, there was no choice but an acquisition. Conglomerates like Nestle and Unilever controlled top distribution channels. However, with FBA, consumer businesses now have a lower bar for purchase or investment and these roll-up companies have come to snap them up.


The roll-up market is quite different from the ones previously covered in Signals. There’s tremendous centralized capital in play simply due to the nature of the market. Companies like Thrasio, Branded, Perch, SellerX and many more have raised millions or even billions in equity capital. These companies have unique problems that are simply impossible for an indie hacker or small startup to address. Instead, on the other side of the table, there are plenty of opportunities that focus on what’s currently missing from the arsenal of small consumer businesses that can play a part in the growth of roll-up companies.

  • Merchant-based financial tools. Half of all sales on Amazon are made by third-party FBA sellers. Yet, most financial tools such as taxes, forecasting, and bookkeeping for FBA sellers are generic and average. Thrasio and the other roll-up companies publicly advertise that they consolidate financial work as part of their strategy.
  • Fresh copywriting. This is the copy in the top amazon result for flower – “Our 24k gold rose perfect manufacturing process. one of the best gift ideas for your loved one. This red roses with Stand, For your love be felt and romantic be heard.” Obviously, there’s plenty of room for improvement that an agency or even tool leverage GPT-3 could solve.
  • Focus on branding. Sorting through the hiring lists of the top roll-up companies, all of them have an incredible amount of open positions for brand managers. That means most of the FBA companies they’re buying are missing out on branding opportunities. An agency could significantly level the odds.
  • [Pro] Audience acquisition. Once again, sorting through hiring lists of roll-up companies, paid marketing roles consistently pop up. While part of this can be attributed to the fact that these roll-up companies have an incredible amount of capital, it also shows that the market is underpricing paid acquisition. Amazon PPC ads and SEO are often a huge painpoint for FBA owners that are much easier to manage at scale.
  • [Pro] Data analytics. Talking with most FBA owners, they have no control over their audience. Since they sell through amazon with FBA, they’re wholly abstracted away from the end audience. That makes it hard to understand what’s working and what’s not. Analyzing sales data in depth through proven methods like sales pipeline analysis.

How to Launch

The FBA market is, for lack of a better word, interesting. It’s populated by sellers selling everything from pet odor eliminators to acrylic paint sets that do millions in revenue each year. The only commonality between all of these different sellers is that they use Amazon’s FBA service. As a result, launching a product for these sellers can often be quite a challenge.

  • Focus on one customer first. The first sentence of Anna Karenina is: “Happy families are all alike; every unhappy family is unhappy in its own way.” Start by finding a happy merchant on Amazon and help solve their problems. If you start by focusing on a struggling merchant, chances are that you’ll be working on the wrong problem.
  • Start with an agency rather than a product. Get paid to work one-on-one with FBA sellers and understand their problems while building out a solution. Building an agency is a great way to derisk a startup and validate solutions.
  • Solve multiple problems. This advice runs counter to most other advice around building a product where you want to start small. However, it’s crucial that, as a product, you solve a lot of different problems. FBA sellers evaluate product purchases through feature sets, so if you solve tax + shipping but the competitor does tax + shipping + data, the competitor wins.
  • [Pro] Write case studies. Believe it or not, case studies rule the land in the FBA world. Have you helped a seller grow their sales by 50%? Or reduced costs by 20%? Write about it! Work with the seller to bring both sides of the story and let the internet do the rest.
  • [Pro] Don’t lose sight of the end goal. At the end of the day, a product or agency really only has one of two responsibilities – to increase sales or to decrease costs/save time. When planning out a new feature or working with a seller, constantly ask if the effort will lead to either goal.


  • Thrasio acquired Angry Orange in 2018. At the time, it was generating more than $2mm/year. In two years, that $2mm grew to over $16mm/year in revenue. How? New packaging, new combinations (larger sizes, different sprays), new partnerships, and influencer marketing with Snoop Dogg!
  • FBA sellers can count olympians among their ranks. Kap7 started when Bradley Schumacher and Wolf Wigo started a store on Amazon. But rather than growing through ads or content, they focused on partnering with coaches and organizations like USA Water Polo and NCAA to grow adoption. They do an estimated $5-6mm/year in revenue today.
  • Interested but don’t know where to start in the FBA market? Start by reading this step by step guide on how Rollie Nation grew on Amazon and the intricate details about selling on Amazon. Today, Rollie Nation does upwards of $18mm/year in revenue.
  • [Pro] Jungle Scout was started in 2015 by a single founder focused on helping FBA sellers find niche products. In the past five years, they’ve bootstrapped to 30 team members, helped thousands of Amazon sellers, and built a charity division.
  • [Pro] Selling a $1.9 million dollar FBA business is much easier than you might think. Garnering a 31x monthly revenue multiple, the business sold in a mere 55 days. However, the interesting thing about this article is that this was all done with a single founder. The article, has many exciting opportunities like how the business built a blog, managed SEO, and added charity. All things that could be extended to other FBA sellers through a combination of product + agency.


  • Amazon FBA – What makes everything possible. FBA takes care of storing, packing, and shipping orders.
  • Thrasio – The biggest FBA roll-up company with nearly $1.7 billion raised
  • Branded – Backed by Target Global, Branded is one of the more well funded roll-up companies
  • Perch – Focuses on acquiring D2C companies being sold on Amazon
  • SellerX – The only roll-up company focused on the European market
  • Heyday – Rollup company that partners with Amazon sellers rather than outright acquisition
  • Jungle Scout – Amazon seller software and product research tool
  • Taxjar – Sales tax for e-commerce companies, including FBA businesses
  • QuietLight – An online marketplace of FBA businesses for sale. Avg FBA multiple is 3x revenue


  • It’s an exciting time to be an FBA seller right now. With so many different roll-up companies, it’s easy to exit with inflated valuations and cursory due diligence. As a result, we’ll likely see more and more sellers considering selling their business and may eventually turn into an industry where sellers start FBA with the intention of selling to roll-ups down the line.
  • FBA buyers are a completely different story. Most of the roll-up companies are run by ex-entrepreneurs that have been incredibly successful in their own right and backed by funds that don’t seem like slouches either. So while they might be overpaying for these FBA businesses at the moment, in the long run, it may be that FBA cashflow is truly undervalued.
  • Despite all the activity in the FBA market, no one is talking about these roll-up companies in any meaningful way. I would guess that in 6-12 months, we’ll see a lot more content about these companies. To put things into perspective, Thrasio is worth at least 10x Casper’s valuation and more than even Stitch Fix.
  • [Pro] Most of the current attention for FBA is focused in the US. It likely continue for a while, given that Amazon makes a disproportionate amount of revenue in the US. However, we might see things bleed into overseas markets like China (Alibaba).
  • [Pro] At a high level, there are two ways to make money, bundling and unbundling. With these roll-up companies purchasing a variety of different companies, we might see product bundling. Imagine buying an art kit + swimming goggles for 20% off together. There may be some interesting synergies between FBA businesses.

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Thanks for reading. See you next week! 🤝