2021 could be a boom year for e-commerce business owners who want to sell. With U.S. e-commerce sales up 40% in 2020, according to Digital Commerce 360, buyers are circling.
Gary Huang, a seasoned e-commerce seller on Amazon and eBay and founder of the 7-Figure Seller Summit, a free community event now underway, says one of the biggest trends this year is the desire of well-funded institutional investors such as the unicorn Thrasio in buying and consolidating small e-commerce stores. Buyers in this sector have been raising cash to invest since approximately 2018 but the trend has picked up in recent years, he says.
Many are focused on Amazon businesses, he says. Institutional buyers like Amazon stores because they tend to generate steady cash, he says. “Every two weeks, you get a payment from Amazon,” he says.
Why is there so much interest now? “Because e-commerce is booming,” says Huang. “In the pandemic, many shoppers are shifting their spending to online.” That trend is expected to continue, as new groups of shoppers continue to gravitate toward e-commerce. “Americans over the age of 65 are the fastest-growing group of online shoppers,” notes Huang.
And with the pandemic acting as a “growth serum” to businesses on Amazon, which controls close to one-third of online retail sales—buyers recognize that the trend is going to continue.