With the eCommerce businesses flourishing, this is one of the ideal periods in India to be an eCommerce company. Unfortunately, most brand owners lack the means required to fully achieve their business’ growth potential. Many online retailers have the ambition and ingenuity to enter new markets, offer a new product, and grow it on an eCommerce platform. But as their company grows, brand owners face a lot of new challenges that limit their growth such as working capital, rising competition, rising digital marketing costs, complex supply chain, etc. These challenges make it very difficult to continue growing the brand according to its full potential. This is a common issue for many brands. They gain traction, but then strike a roadblock, making it tough to grow into other markets. They are holding on to something which accounts for a sizable amount of their net value, but it is enveloped by uncertainty and risk.
This is where eCommerce roll-up businesses like Powerhouse91 come into the picture. eCommerce roll-up firms buy eCommerce brands from sellers in return for a lump sum cash payment along with future profit-based incentives. Because these businesses manage multiple brands instead of a single brand, they make use of mutual learnings, economies of scale, and significant optimizations in marketing, listings, and supply chain to help the firm grow at a faster rate. Finally, this permits company owners to profit monetarily from selling their brands, allowing them to pursue other ventures while also seeing their brand expand exponentially.
About Powerhouse91
Powerhouse91 is a Gurgaon-based eCommerce roll-up company that was formed with a single mission: to assist eCommerce brands to grow according to their true potential. Powerhouse91 is India’s leading eCommerce roll-up business and the first-players in acquiring brands in the eCommerce sector, providing greater economies of scale in handling and expanding them. The team Powerhouse91 is headed by Aqib Mohammed and Shashwat Diesh who have over 30 years of combined eCommerce experience and have developed significant expertise in areas such as Marketing, Technology, and Supply Chain to assist the growth of any acquired business.
Funded by Titan Capital, Powerhouse91 is emulating Unilever or P&G in the eCommerce market. The company is in the midst of buying 20 brands across 14 different categories from beauty and personal care to electronics. Powerhouse91’s approach towards acquiring brands is simple, transparent, and fast, and their deals typically complete in 6-8 weeks.
Brands suitable for acquisition
- Marketplace Focused
Powerhouse91 seeks brands that have primarily sold through eCommerce marketplaces like Amazon and Flipkart, with most of their revenue from these channels. The brands which have high offline sales volume are also considered in case they present an exceptional potential for growth in the eCommerce industry in the future.
Profitable brands with solid margins are the most appealing brands for companies like Powerhouse91. Very big seller accounts with moderately ranked ASINs are often not preferred by roll-up businesses. The brand which has generated a revenue of under 10 Crores INR in the past 12 months is favorable for Powerhouse91.
- Top-Rated and Ranked Products
Powerhouse91 is focused on brands with hero ASINs which have at least 500 strong organic reviews. This provides social substantiation that the brand has category-winning products. Similarly, a rating of more than four stars demonstrates the product’s quality and indicates the brand’s ability to maintain its market position for a long time period. Reviews and ratings that have been pushed or paid are not considered.
The brand’s products should also rank high on organic searches for them to be suitable for Powerhouse91. If a seller can rank highly in a competitive environment, it frequently suggests that the brand is also doing other things effectively, such as promoting its products, controlling inventory, and listing optimization.
- Attractive Category
The ideal products are possibly private labeled items with consistent demand. Goods that seem to be fads or have relatively short-term demand are unlikely to fit Powerhouse91’s premise.
Everyday goods in categories ranging from kitchen and office supplies to beauty and personal care fit the portfolio perfectly. Powerhouse91 does not focus on products in trends-based categories such as fashion and low-shelf life categories such as grocery.
The process
- Mutual Introductions
Powerhouse91 puts a lot of emphasis on the brand journey. During the first few calls, they try to understand your story and give you an idea about the process, the timelines and resolves any potential concerns. These calls are highly efficient and are meant to create a mutual understanding between the parties to make it a comfortable experience for the sellers. In the first few calls, they will normally like to know about the age of your brand, the sales volume, and the product and market challenges.
- Data Review and Letter of Intent
After coming to a mutual understanding, Powerhouse91 generally requires data on the brand’s monthly sales as well as advertising to proceed into evaluation. This information is required to understand the brand’s profitability and present a valuation in accordance. Once the valuation is done, Powerhouse91 presents the brands suitable for their portfolio with a Letter of Intent, which presents various terms underlying the offer, including (i) a valuation/purchase price, (ii) payment terms, (iii) a timeline, (iv) additional due diligence requests and (v) next steps.
- Due Diligence and Documentation
Based on mutual agreements in the Letter of Intent stage, the parties proceed into a due diligence phase. In this stage roll-up companies generally require supplier agreements, audited financial statements, trademarks, rental/lease agreements, amongst other documents. Simultaneously, the contract is drafted in consultation with the brands and a purchase agreement is formulated. After the due diligence and documentation, the deals are generally closed within 2 weeks.
Powerhouse91 has a simple, quick, and upfront approach. Expectations are fully expressed in terms of what Powerhouse91 requires, the timelines, and the structure. Powerhouse91 makes sure that the brand owners have a hassle-free experience and are always looking for ways to assist the eCommerce ecosystem to expand. The company is recognized for its fast decision-making, which ensures that the owner needs to devote the least amount of time in order to obtain a clear image of their brand’s value and contract framework.
Why sell your brand?
Owners may decide to sell for a variety of reasons. Increasing competition, unsettling market techniques, a need for cash-in-hand in the face of uncertainty, or just a desire to change course in life.
Even in a profitable firm, brand owners sometimes only receive a percentage of the profits because the majority of the profit must be put in merely operating and developing the firm.
Businesses like Powerhouse91 provide numerous years of profit in a single transaction, as well as the ability to share income as your brand expands rapidly. Essentially, this allows brand owners to earn a financially beneficial exit from their brands while ensuring the brand is in the right hands.
Conclusion
If you own a brand and want to explore the next steps for your brand or take it to the next level while making a lucrative cash exit, Powerhouse91 is the company for you. To reach out to them, you can mail at contact@powerhouse91.com or fill this form https://docs.google.com/forms/d/e/1FAIpQLSfW3gZ4nsA0V27B2iRjbY3BRol65kzJlWL6pe0SBMjchIOxaw/viewform?usp=pp_url
Please mention that you get to know about them from AMZ India Profit for faster response.
