Amazon’s new store acquisition: a quick way to enter the e-commerce market and Walmart’s strategic response

With the booming development of e-commerce, Amazon, as one of the world’s largest e-commerce platforms, provides a wealth of business opportunities and sales channels for many merchants. For merchants who want to enter the e-commerce industry or expand their business scale, acquiring new Amazon stores is a quick and effective way. However, how to acquire new Amazon stores and how much capital investment is required are issues that many merchants are concerned about.

Find the right Amazon store

First of all, merchants need to find a suitable Amazon store to acquire. You can find potential store acquisition targets through Amazon’s official Amazon Marketplace China, Amazon North America and other platforms, or through third-party intermediary services. Focus on factors such as store sales, profits, product categories, market competition, and user reviews.

Conduct due diligence

After determining the target store, the merchant should conduct due diligence to understand the store’s operating conditions and potential risks. This includes reviewing the store’s financial statements, sales data, supply chain status, and understanding the store’s intellectual property and legal issues. You can ask relevant professionals to provide support to ensure the rationality and feasibility of the acquisition process.

Negotiate and reach an agreement

The merchant negotiates with the owner of the target store and reaches an acquisition agreement. The negotiation content includes details such as purchase price, payment method, delivery time, employee placement, etc. Merchants can hire lawyers or professional consultants to draft and review contracts and ensure that the terms of the contract are clear and unambiguous to protect the interests of both parties.

Carry out fund preparation

The acquisition of new Amazon stores requires a certain amount of capital investment, including the purchase price of the store, working capital and subsequent operating expenses. Merchants can prepare the required funds through their own funds, loans, investor cooperation, etc. The specific investment amount varies depending on store type, size, region and other factors.

Carry out transfer procedures

After completing the acquisition agreement and financing preparation, the merchant needs to go through the transfer process to formally transfer the ownership of the store to the new owner. This process includes submitting relevant documents and information to Amazon and conducting the store transfer process as required by Amazon.

Investment cost analysis

The specific investment costs for new Amazon store acquisitions vary based on a variety of factors. Generally speaking, the investment amount includes the store purchase price, operating expenses, personnel costs, marketing expenses, etc. The size of the investment will also vary based on the type and size of the store. Merchants should fully evaluate and plan investment risks and returns before making investments.

Walmart’s strategic response

In the United States, Amazon already accounts for half of e-commerce sales, while Wal-Mart’s e-commerce share only accounts for less than 4%. In order to compete with Amazon in the segmented e-commerce field, Walmart has taken a series of acquisitions. For example, in early October 2018, Walmart acquired the plus-size clothing e-commerce platform Eloquii; a week later, it acquired the underwear e-commerce platform Bare Necessities. In the past year and a half, Walmart has also acquired outdoor sporting goods e-commerce Moosejaw, men’s fashion e-commerce Bonobos, retro-style fashion e-commerce Modcloth, footwear e-commerce platform Shoebuy (now renamed shoes.com), and home furnishing e-commerce Brand Hayneedle.

These acquisitions are almost all for category leaders or e-commerce consumer brands that can bring unique products to customers. Walmart hopes to find a breakthrough through its new site group strategy and acquire a new generation of e-commerce talents. For the clothing category, Walmart, Amazon and other e-commerce platforms have shown strong interest.

Conclusion

Whether it is through acquiring new Amazon stores or through strategic e-commerce mergers and acquisitions, companies are actively seeking the best way to enter the e-commerce market or expand business scale. For merchants, it is crucial to select the right acquisition target, conduct detailed due diligence, reasonably plan funds, and ensure the smooth completion of the transfer process. For large retailers such as Walmart, they are strengthening their competitiveness in the e-commerce field through continuous mergers and acquisitions.