Process to Acquire a Brand: Things Aggregator Needs to Watch

There’s a thin line that separates a successful acquisition from a disastrous one and very few aggregators realize this. Slowly with time, their aim has gradually shifted from reshaping the acquired brand to sheerly earning profits. A brand that is acquired isn’t all about profits. It is meant to be nourished and grown. The difference of opinion here arises when an aggregator overlooks that purpose.

Unarguably, there’s a difference in the goals between the two, and that’s where every strategy and tactic fails.
Would you call it a regrettable acquisition? I would rather blame the process.
Process plays a vital role in setting up a strong foundation between the two entities – that is, the aggregator and the acquired brand. Many acquirers today consider the process of acquiring a brand similar to buying a property. They never realize the fact that it’s more than enrolling. It’s about aligning two missions together and creating one vision. The process is moreover about acquiring the right brand and then starting from fortifying its core with a series of logical steps. Here, the ones with the approach to value a strategic intent, vision, and objective win the game.
Stepping up from vague focal points like weightage to documentation and financial calculations, an aggregator should seek to add value in the onboarding process. Therefore, to make you familiar with every step of the acquisition process, I will help you carefully tailor and communicate how a win-win acquisition process looks like.

Establishing Motives and Search Criteria

More than just cracking a “good deal,” the motive behind the “good deal” needs to be clear to aggregators. This step is useful for aggregators who are still in search or want to shortlist the private labels. An aggregator can get more specific and broadly speak on the objective of acquisition. Some common objectives are diversification and full-scale up. Under the old-school method called diversification, the focus of an acquirer is towards looking after a product line. It usually involves increasing the sales of an existing product line or nurturing a new one. The scope is limited cum specific. Whereas in full scaleups a brand is transformed from where an aggregator picks it. The plan for scale-up is prepared for every function, vertical, and business line.

Search criteria are an extension of establishing an objective. Many experts and I, undoubtedly agree on the importance this step carries. Defining the criteria is a filtration process, which indirectly lands an aggregator at its choice of the acquiree. An example of criteria could be the FBA brand. Elaborating on the same point, many aggregators prefer the brand to be a certified FBA seller. Somewhere this is a benefit for them, as there would be no requirement to strengthen the shipment process. A strong shipment process is a plus-plus for the aggregator.

Knowing the Business

This is where I want to spill the beans. At this stage, an aggregator needs to get into the skin of a brand’s business and understand every process of the organization. From business lines to minutiae details, an aggregator needs to capture every detail. The prime focus should be on understanding the industry, business nature, and competitors’ whereabouts. This gives an idea of what scope future plans hold in order to get success.

For instance, a brand dealing in fashion apparel may have a large pool of customers as compared to a brand manufacturing polypropylene zipper bags. Clearly, the product nature recites the demand it has and automatically tells the scope in the future.

Once an aggregator gets to know about the business and scope it can move towards understanding its limitations. You can consider this step as the current SWOT analysis of a brand or private label, where an aggregator can also get to know the internal and external factors that can influence the business.

What We Can Offer

At the offer phase, it is all about building a roadmap for the brand to improve its odds of success. Here, through various approaches, an aggregator gets a chance to communicate its value as an accumulator and as a stand-alone company. The plans presented by an aggregator here cover two key aspects. To start, one needs to devise a foolproof strategy to detect loopholes along the way and fill in the gaps with backup approaches. One such example can be preparing a forward-looking action plan for a poorly structured audit system. Usually, an aggregator here figures out the root cause for the strategic or communication gap and thrives on improving the operational areas of the process. The main objective here is to fill the gaps is to solidify the foundation of a brand’s system and focus on the bigger picture i.e, expansion.

It’s time to throw some light on brand vision, the most crucial thread that ties two entities together. All an aggregator needs to do is to integrate the goals. This is a smart move to win the trust of a brand. Going ahead, an aggregator needs to leverage industry knowledge in designing growth strategies. The focus areas should be more on developing the brand in the e-commerce platform and polishing its marketing approaches to gain sales. That’s how a brand will stand out.

Agreement

One of the crucial steps in the process will determine whether an aggregator and a brand are on the same page or not. When the brand enters into the contract, it is the duty of an aggregator to present a literal negotiation on the table. It’s an ancient myth that negotiation is a cost-saving strategy. It is moreover a discussion on every minutiae service and then presenting it as a package that offers comprehensive tactics of elevating a label. A clear talk helps in lifting the fog of over-expectation from an aggregator. Everything put together, the reason an aggregator should focus on negotiations is to see how productively they can work with the brand in a synergistic manner.

Prior to signing a contract, one last check is of the ROI. This is a final winning move where the two integrate the ways and sign in for the brand’s transformation. With time, it is mandatory for every aggregator to forecast and analyze how much ROI a brand can bring.

At this point, only the “green or red” signal matters. If all these possibilities are checked, then it’s a win-win situation for the aggregator.

Take this Office With You!

The saga of rules and procedures differs from firm to firm, but through this blog, there’s a general lesson that applies to all the aggregators. A process done right results in amazing roll-ups as it’s not just a mere process, but it’s a critical scan for future opportunities on a detailed level. This process is a cheat sheet, which prevents an aggregator from losing the plot and staying focused. The reason why 90% of acquisitions fail lies in their preliminary foundation.

An aggregator needs to map and record all the complex chain of actions. They should pay attention to what can go right or wrong. In the same vein, they should realize that it is imperative to standardize approaches and plan to improve them by regularly monitoring them for success. This future course of action shouldn’t be only in words but should be in the paper. The way you value contract paper and licensing, these critical aspects should also be documented, applied, and acknowledged.

I could continue for hours, and words will fall short in conveying to the aggregators that this process is nothing but a secret to long-lasting success. This will not only make one win the fragmented market but the industry as a whole. It’s high time these aggregators read in between the lines and bring this to action!