Podcast transcript
Introduction
Hi everyone, and welcome to Marketplace Masters, the show where we showcase the latest thinking, insights and strategies from leaders shaping the future of e-commerce marketplaces.
Paul Sonneveld
I'm your host, Paul Sonneveld, and today we're diving into one of the most talked-about topics in the Amazon agency space right now, mergers and acquisitions. Whether you're building, buying, or just trying to stay ahead, understanding what's happening in the M&A world is absolutely critical.
And that is why I'm thrilled to be joined by Chris Fryburger, founder of Enreach and the author behind a comprehensive report on Amazon agency investments and acquisitions. We're going to talk trends, buyers, multiples, growth leavers, and the real story behind DealFlow.
Plus, you'll get the opportunity to ask your own questions during our live Q&A. So make sure to pop your questions in the LinkedIn comment section or on the YouTube comment section if you're joining us via those two platforms. All right, let's jump in. Chris, welcome to the show. I think you're still on mute, Chris.
Chris Fryburger
There we go. Excellent. Thank you, Paul. Thanks for having me on. Thanks for having me on Marketplace Masters. You have quite a guest list. I'm honoured to be part of it.
Paul Sonneveld
Great, too. It's as we were chatting a little bit before the show, it's a very topical conversation. Many, many agencies owners, certainly in the Amazon space, have been at it for a number of years. They're all starting to think, OK, what's next? How do I maybe exit? How do we go from there? So let's dive in and really start with the top line here. And I want to go back to this report that you recently released, the Q2 2025 Amazon Agency Investor Report. I mean, at a really high level, what are the key takeaways for agency owners?
Chris Fryburger
Yeah. The report itself was really a reaction. One of the other things I do is track the industry for data, for the size of industry, of agencies, capabilities and like my specialties around tracking those agencies, helping them grow and ultimately find an exit through reach. And so I did, there's a number of things that I track on that. And really also my own self wanted to really learn Chat GPT as well, as far as a research tool and the new deep search had just come out.
So I really did a deep dive using my data, some industry journals and things like that into the space and out came really a document that I then fed back into some other M&A, GPT, some other chatbots as well. And out came a 50-page report out of that was polished. I'm still honestly trying to get my arms around it myself. It's chock-full of information as far as the things that agencies should be focused on at the 12-month-plus mark, and if they're looking to sell really in the next year, things to focus on, and then really the process thereof and what the market looks like now.
But really the key takeaways for me, really the focus, one of the focuses of the report, which is raw, what we're focused on is the economy, the effects of tariffs on evaluations of agencies. And then really I was prior to that also focused on AI and the future of that and its effects on agencies as well. And so there's a lot of moving targets in there and that report really talks about a lot of things affecting, you know, agencies today, if that makes sense.
Paul Sonneveld
Yeah, yeah. So how would you characterise the industry at the moment and the level of activity. There's certainly, I think, a perception that maybe some of the M&A activity has slowed down somewhat. What are you seeing?
Chris Fryburger
And so I think in all fairness, I think one of the things that the first M&A experience of this whole space was really around the aggregators and activity around brands. And so I think investors, even owners, we all sort of have taken a step back from the investment world, if that makes sense.
And so, I think it's fair to say that there was a plethora and a growth of agencies. I think we have a graphic you can pull up as far as the number of the agencies that exist sort of over the last five years. But really, there was an explosion really coming out of COVID. You can think of it really just sort of as that one there.
You can see out of coming out late 2015, again, I'm tracking the number of agencies out. There's about roughly about 750 agencies of certain criteria in the world right now. But what the interesting thing out of this graph is really is that not only was there an explosion or increase in agencies, really a number of sellers, and thus the number of agencies, number of brands coming on, the amount of need, and thus the number of agencies really coming out of COVID was an explosion.
But really, we're seeing that the number of agencies has dropped off for a number of reasons. It's really hard to get into the space. It's really hard to deal with Amazon. I don't need to tell an Amazon agency owner what they have accomplished. I refer to them as unicorns versus sort of horses, like a normal digital agency that doesn't speak Amazon, maybe focused on Shopify.
So in the last 20 years of google is really in horse whereas these are these are unicorns and as you can see from this graphic, really the number of unicorns is kind of set and that thus gets to some of the multiples we'll talk about that we're seeing as well but i'm not sure if i answered your question or not in that whole thing but but yeah.
I think the answer is there's plenty of agencies. It's still early, honestly, the spaces, you know, I know it's hard. A lot of sellers have been working with it, you know, Amazon for 15 years, but really, I really equated to the almost, uh, you know, really, uh, you know, really 2005 Google days when you still had SEO agencies, like that there's still a lot of maturation to go on.
Paul Sonneveld
Yeah, look, absolutely. I mean, we'll get into sort of more kind of who are the buyers and sellers shortly, because I think there's some nuances there, too. Like maybe the buyer profile is changing somewhat, too. But yeah, let's just go to the headline question, right? I know there's agency owners that just jumped on. They just want to know one answer. You know, what are the multiples doing? Are they up and down? And it's never as simple as that, but we'd like to kind of simplify our lives, right? What are you seeing on multiples? And I think you've got a slide on here as well, so I'm just going to bring it up and let you talk to it.
Chris Fryburger
And so, you know, what the slide will show is we're really seeing sort of four buckets of types of agencies, right, or sizes of agencies right now. I think it might be at the bottom of this page.
Paul Sonneveld
Oh, yep. Yep. Yep.
Chris Fryburger
And the next, there we go. So, you know, again, keep in mind that I come from a world where a traditional agency world where an average agency really had hundreds of employees measured often the revenues measured in billions, in some cases, and very large consolidation has gone on, whereas this space is still very young. And the largest agency in the space really has about 250 employees. Now there's a big mix as far as overseas and the like going on, but revenue really crossing more like 20 million or so. It's the largest agency in the space. And really there's only a couple dozen that are even approaching that sort of that top smallest bucket up there of really multiples of six to eight X is what we're seeing for those largest agencies.
At the bottom, sort of, you know, the other bookend of this is really the tiny agency that's really a million less or so in revenue, maybe half of zero to half a million in EBITDA, of which the bulk of agencies fall in this bucket. We're seeing somewhere between maybe half to 2x of their EBITDA in that case. But the average agency, and I think I've got another slide for that, what an average agency looks like, really falls in that second criteria. where you're looking at roughly this agency, and again, I would say almost a quarter of the agencies fall in this bucket, maybe less, maybe more like an eighth fall in this bucket, where they were established, again, more of like 2016 or so, revenues crossing somewhere around 5 million, really somewhere around 45% margin in that. So again, about two to three in EBITDA, depends if they've made big hires and things like that, how they've arranged themselves. 35 employees really is around the average as well.
Again, most of, I would say about 40% of those employees are remote on average, say Indonesia or other places of contract work. And then, do speak some other languages, a little bit of Walmart, probably a little TikTok, things like that as well. And this kind of just is what a normal agency would look like. And you're looking at a multiple of this type of business around four to six X, where again, if it was all things aligned, clients aligned, teams aligned, founders, everything looks good. You're looking at around this kind of multiple.
Paul Sonneveld
Yeah. And just to clarify for you, when you're talking multiples, you're talking EBITDA multiples here, right? Just to make sure that, you know, different industries will.
Chris Fryburger
Yeah. And everything here is in US dollars as well. To clarify that also.
Paul Sonneveld
Yeah, absolutely. Absolutely. So, so let's talk about, you know, I guess we know who the sellers are, right? Or we tend to, but buyers, I mean, I've seen a range of buyers, other agencies picking up agencies because of maybe footprint reasons or client reasons or not always even strategic reasons. Obviously, then you've got your large holding companies that are acquiring capability in that space. And then there's a couple of people out there trying to put multiple agencies together and build a super agency presumably then to flip again. A bit like, I'm trying to, I won't name any names.
Chris Fryburger
A bit of a roll-up model. Yeah, absolutely.
Paul Sonneveld
Yeah. So, but I mean, that's just sort of my anecdotal perception. I mean, what are you seeing in terms of types of buyers? And I guess more interestingly, which type of buyers are most active at the moment?
Chris Fryburger
Yeah, great question. You touched on, I think, three of the four buckets. There are definitely strategic buyers out there, of which there are different types, both inside and outside of the bubble, that need to solve for Amazon still. I would say the most activity I find are with traditional digital agencies that these are really the agencies that are 100 million plus and outside of this bubble, nothing like that exists outside.
But outside the bubble, we're looking at high-growth agencies that are still doing Super Bowl commercials. They're competing with the Oglesbys and the, you know, the Omnicoms and the larger agencies. They're really that mid-tier, 100 million to a billion size agencies. Believe it or not, they have not solved for Amazon. In some cases, there have been acquisitions that have failed. But moreover, usually they tried to hire for it. And really, Again, getting to the unicorn metaphor, it's really, really difficult to grow an agency, to grow a team and have clients and the like and do what these owners have done.
And so in some cases, these larger agencies are coming in for their second, third attempt to build a team to solve for Amazon, because guess what? They just lost a pitch for, I'll use a bad example, Nike, maybe a piece of Nike's business because they can't execute on Amazon. And so that would have paid for any acquisition of these little smaller entities that would solve these F1 raising teams that they can solve for. So that's the most, where I see the most activity for the most part.
And then really the other activity really is other agencies looking to grow. There have been like a lot of had a flat year. In some cases, they're having to grow for sale for the first time. It's getting harder and harder to execute on Amazon. So in some cases, they're looking to solve for that by through a rollup, get three or four of these together and the result is a $50 million agency that can then sell for a lot more.
Paul Sonneveld
Yeah, yeah, that makes sense. I just want to acknowledge our audience is fielding quite a few questions. So I just want to say, Arthur, Phil, Jacob, thanks for all your questions. We will get to it. I promise you, we'll leave some time at the end to do that. So please, please keep your questions coming.
So Chris, I want to go back to the valuation multiple of four to six times for kind of a I guess the most common profile of agencies. That's certainly something that kind of resonates with me. And so I want to sort of hone in on that because, you know, chances are people tuning into this are most likely to fall into that pocket. Four to six EBITDA or EBITDA multiple. What are some of the differences between a four and a six, right? So what are the characteristics about your agency or the things that buyers are looking for that's going to push it closer to the six mark than the four mark?
Chris Fryburger
Sure. So, first and foremost, it's going to be your financials, right? What is not only the, you know, what do the books look like? How clean are they? You know, you'd be surprised at some, you know, and first agency, a lot of these owners, it's the first time they've ever run an agency. So, in some cases, there's some opportunity within their books as well. But we want to look for stability there. That also gets to kind of contracts. What do contracts look like as far as, you know, do you have one-year, two-year, three-year contracts in place? That could be a higher multiple.
Think about risk, right? When I buy you as an agency, I want a couple of things to happen. I want your clients to not go anywhere. So first of all, do they match to my portfolio? Do I serve those categories? Is that a match in that respect? Also, we're interested in your team. Does your team complement my team? Because the most expensive thing for people. So if that team's cohesive and a running machine that doesn't need a lot of maintenance, that can be a multiple. What does the executive layer look like? In these small agencies, a lot of owners have not put in their management team yet beneath them. So they call up a lone man or have a bus problem or the owner gets hit by a bus, the agency ceases to exist.
So is there a number two appointed or a three or four, like the C-suite kind of flushed out of it? That's another multiple. So it kind of goes on and on, but that four to six is just a rough range, but really it just depends on how many of those check boxes that they check off to determine whether they're higher or the lower of that range.
Paul Sonneveld
Yeah. Two specific questions from me, and that is around business mix. I've come across at least two different kind of scenarios. There's more, but like, let's keep it simple two. One scenario is an agency that has a fair amount of content work. So not just the management of Amazon, the advertising or other channels, but creating assets, copy, all of that.
Typically, I mean, we used to run a business like that, very profitable, used to be, maybe not so much anymore. I guess the other scenario that I hear a lot is, agencies have a desire to build their own software platform, right, have their own SaaS. Certainly driven by a belief that if they have some technical IP, then that's going to drive the multiple higher. So those two scenarios, I mean, what are your perspectives on those two?
Chris Fryburger
Yeah, which which actually is interesting is, you know, picking on the IP for a moment, I wanted to the things that came out of the report was contrary to what my experience has been. For instance, there have examples, again, young agencies, the tools that exist back then so often a lot of these agencies. Back then where develop their own tools, PPC tools, management tools, operations tools, things like that, because nothing else existed. But in the end, that was often cast aside because they were replaced by a true tech stack from third parties and things like that.
And so the thought was that if you're going to go develop an analytics tool right now and you're an Amazon agency, those are really two different businesses. SaaS and agencies are holistically different companies. And so unless you're equipped with the internal resources and the money and the like, it could become a diversion. However, coming out of like the likes of Prosper Show in Vegas, as well as this report, I've actually changed my mind because we have the issue of AI.
And so, one of the things that my new AI report comes out, and by the way, I'll link this all in the show notes, all these free reports that I've been doing, but I did a deep dive into AI and really came out of, validated through Prosper was there's a five, really a five year clock ticking on these agencies and all in all agencies, regardless of who they are. In the sense that a lot of the things that we do see now, obviously we're seeing creative go that way.
We're seeing PPC being automated, things like that with new capabilities that are beyond having humans at the helm. But often, we're going to also see operations and things like that. So really an agency in the end, take it to its fullest extent, is going to be an owner, maybe a small team of one or two or three, maybe that's an ACD or some other operations person, and then your AI. And so your agency is going to be just as good as your AI.
So to answer your question, for a long way, I changed my mind. your question is around, should they have IP? And the answer is yes, you should start solving for AI and IP around that, whether you develop your own AI or leverage another, the tools you use, things that you, how you operate should all, you should be thinking constantly of how can I be applying this to grow my agencies, have new capabilities for now, But ultimately, it's going to end up being, you know, taking over the operations of my entire agency. So I need to start planning for that as well. So, you know, the answer is yes and no, I guess, to your question.
Paul Sonneveld
Thank you, Chris. And that's actually a really good sort of setup in terms of where I wanted to go next, which was, you know, what are the top things that an agent should do to prepare, say, if they're looking to exit in 12 to 24 months? You know, there's preparation, right? And there's a bit of a ramp-up or runway. What are the kind of waypoints on that runway? And what advice would you have for agencies to start preparing?
Chris Fryburger
Yeah, funny you ask, I am also developing an exit guide for agency owners as well. And so I'll outline a lot of those steps, 12 months out, six to 12 months out, zero to six out, and then sort of the process that one goes through, things along those lines, it's gonna be very helpful. But in synopsis, to answer your questions, obviously, again, first and foremost are your books, make sure that everything is squared away there. Things like contracts, if you can start, as they become, under renewal over the next year, you should be thinking about, hey, can I get a retainer in place? Can I get a two-year contract discount? Lock in that client, those types of things.
Again, related to that, you might be able to fire your least profitable or the one that's actually costing you. Make sure you call those types of things as well. I would have somebody audit your financials. If you have a professional that knows agencies, knows Amazon agencies, you don't know anyone, I can hook you up. That's one of the things I do as well. but you have a financial overview. But really, there's a, you know, it goes down a list.
One of the things I also see is I don't see a lot of agencies that really, not in order. One of the things I don't see is agencies really talk about themselves very well. I don't see them, I really forget the expression, but sort of smoke their own weed. You know, you look at their website, you can look at their materials that are coming the client, the interactions, things like that. You can always really tell how big an agency is, by their own materials because they never apply it to themselves.
So I always recommend to people, you know, look that way and believe it or not, it's a multiple. It also drives the conversation with investors. The first thing they're going to do is hit your website and it just sets the mood that you showed up with a tie on versus not. And it's just, and there's a whole bunch of opportunities in there as well. Answer your question. There's a half a dozen things in there that I would highly recommend that people focus on.
Paul Sonneveld
Worth connecting with you on LinkedIn to ensure we get our hands on that checklist when it comes out. It's a great little prep tool.
Chris Fryburger
Sure.
Paul Sonneveld
Let's go to the second most important question of this whole podcast. The first one was, what's the multiple? The second one is, what are the deal structures and the terms? And I think I actually just want to bring Arthur's question up here. So Arthur, thank you. He essentially was asking the same question I was going to ask, which was, how does a buyer usually structure a deal? What's the cash component up front? What's the earn out? And I'm sure the answer is it depends and everything is negotiable, but what do you see commonly?
Chris Fryburger
Absolutely. Well, in my foray into this area, by the way, I am not an M&A advisor. I'm not certified to give advice. I'm not a financial counsellor of any sort. I should say that legally.
Paul Sonneveld
I should probably get a little banner up on the screen now just to put the big disclaimer there. It's going to fill the whole screen and it's going to be up there for five minutes. No, sorry. Go ahead.
Chris Fryburger
Yeah. So, you know, the structures can vary. There's the price of the company. And then there's the, there's the circuit of the deal, the circumstances, the earn out, or I should say typically is an earn out. So because it's an agency, it's not a SaaS, a software solution, you know, there are SAS solution. It's not a warehouse. It's not, you know, laundromat, things like that. It's an agency typically because it's service-based there is always an earn out involved. In some cases, the owner needs to get out immediately would be severe discount for that because of the niceness of the service, but typically is the opposite end. Typically, we're seeing that usually it's one to two to three year earn out depends on circumstances is most common.
So you would get a little bit of cash upfront, you would get then, or potentially it's 50% or potentially more. And then the rest comes based on performance and hitting some metrics to make sure that there's a smooth transition, both in clients and revenue, employees, and things along those lines. So the owner has to stay on board, make sure that that's a smooth transition, which makes perfect sense. Now I would say, depending on the buyer, that there's other opportunities for that owner, not to just get out at that point, but also to take it potentially chair or take a chair at the helm of something larger.
Again, in case of a roll-up potentially with further resources and not necessarily being in charge of the company or the spaceship, maybe in charge of the analytics room or be in charge of sales or things along those lines, you could be part of something larger. And that's definitely a phase I think we're going to see as part of these mergers that are going to go on in the next couple of years is that opportunity. So again, there's a number of exits, but in the case of an earn out, usually it's one to two years. I have seen as much as three.
Paul Sonneveld
Thanks, Chris. I'm going to throw you one more question and then we're going to open up to our audience. So we already have a list of questions ready to go, but if you're tuning in here and you've got further questions for Chris, now's a good time to pop them in the comment section and we'll get into them very shortly.
So last question from, well actually probably not the last question, but question before we open up. Mistakes. What are the mistakes that you've seen agency make that have maybe killed deals or really reduced evaluation? You know, think derailers, right? Watchouts, banana skins. What would you kind of put up there in terms of key ones that you've seen?
Chris Fryburger
Yeah, I mean, first and foremost, I think, you know, going at it alone is probably the one mistake I see the most. I should say the one that's easiest to avoid, right? There are M&A experts at this, regardless of kind of any business that you're selling. Again, it could be that laundromat. I would recommend that they get representation because just the sheer amount of communication that has to happen, negotiation, obviously, then it gets eventually into legal and things along those lines.
But you would think that you would have, hey, I have an accountant. or, hey, I have a lawyer, but you would really want to make sure that you have an M&A agent that's not only has expertise in selling agencies model, which is completely different than selling laundromats, but also has Amazon expertise as well and knows the space and how much you're worth and you can go toe to toe and get that four to six multiple for you.
So first and foremost, I think that's the main avoidable problem I think that people are making. But yeah, I mean, there's a lot of things to avoid. I think it really gets to just prep to make sure that you allow enough time. If you want to sell and keep in mind that the shortest process that I've ever seen, I think that's true of the M&A world, regardless of this, it's really six months.
It takes just from the first meeting and dating to getting divorced three times to then getting married and ultimately signing that deal can be you know, often as much as six months and if not longer in this space. And so, just keep that in mind. But, you know, that said, there's preparation that needs to be done for that as well. So I think six months out from that as well, to avoid some of those problems also.
Paul Sonneveld
So I was going to just saying it's a fairly intensive process and certainly if it's, If you're also sort of a really founder-led business, it's kind of tricky both sort of stepping out as a founder to run the process as well as keeping your business and keeping the revenue line going, because the last thing you want to do is sit in front of investors with a revenue line that points down, right? So, yeah.
Okay, let's open up. I'm going to hand the floor to to Claudio. It's got a long question here. So I hope you can read this, Chris, but I'll read it out to you as well. Thank you, Claudio, for your question. Really appreciate it. Amazon agencies have a strong presence of people and personal management among clients, managers, etc. So people are often key to the success of a business.
How can this aspect be handled to achieve a successful exit? How can employees really be preserved without becoming a limitation when selling the company? I guess he's hinting at people are really your core asset. How do you make sure that the transition piece doesn't go south and a whole bunch of people walk out the door and that kills the deal?
Chris Fryburger
Yeah, I mean it's an excellent question and I think regardless of it being an Amazon agency I think the answer is the same for any sort of business that's sold, right? In the sense that you would want to make sure that you're communicative up to the point after everything's signed, by the way, you would want to be communicative out and that some sort of process to make sure that everybody's on board.
I would definitely suggest that, you know, your number two and again maybe anybody with a that you would point it as a SVP or CXO probably should have some sort of Google golden handcuffs. That says they should have some interest in moving forward with the next entity that you know for instance it really be you know I doubt in some cases maybe shares or shares in a future entity things along those lines can make the that team stay on board.
But really, it's really, I think, around just communication and making sure that they know. Keep in mind, most of these agencies are often kept open with their same front doors. That is maybe a virtual front door, but for the most part, they're kept alone so that the clients don't see the URL change. They don't see the logo change and things like that. And so in some respects, most of these agencies aren't changed. They go forward even better, but under the same guise as they were before. So there's really not a lot of change from an employee standpoint. In fact, it can be different. They can be given a raise. They can be given more resources from HR. They can be given bigger benefits, things along those lines. And these are the things that are going to keep that team together going forward.
But the picture that you paint for them is critical to them making sure that they don't go anywhere because ultimately those part of the multiple is the acquire aspect of this. And the fact that they're again hiring and getting that F1 racing team that they can win tomorrow and win new business tomorrow, right? So it's critical that for everybody to make sure that that stays as a unit.
Paul Sonneveld
Yeah, thank you. We have another question here. We touched on this briefly, but maybe we went a little fast. The different types of acquirers, we cover this, but do you mind just kind of reiterating? I think you mentioned there are four different types. Be great just to restate those, Chris.
Chris Fryburger
Yeah, absolutely. And so, you know, I think you could maybe use be grouped differently by different types of investors, institutional and strategic and things along those lines. But really the top four, I guess I would see as far as types of buyers I'm seeing, first and foremost, I'm seeing other agencies, other Amazon agencies, acquire through growth and through acquisition, through a roll-up, and through a combination of other agencies, get additional capabilities, but moreover, build a larger entity that can then be sold at $50 million, $100 million, plus that kind of thing. So again, other Amazon agencies, and you can consider that might be a strategic in some respects, maybe more of an institutional kind of investor, So that being one.
I would also then sort of split that into two, another bucket, if you will, and say that there's the outside agencies as well. A hundred million plus digital agencies that haven't solved for Amazon, that may have solved for other marketplaces, probably Shopify, things along those lines that haven't solved for Amazon. So that would make that another bucket. Again, is that a strategic move? Potentially, I think I would put that in that bucket involving the buyer, the sale gives them capabilities that adds to theirs, so it's more of a strategic move that way as well.
The other, another buyer I'm seeing, just by the, you know, the ones I'm actually seeing out there are other, like, for instance, SaaS solutions are looking, one of the things that they're realizing that there's, you know, there's no software without services. A lot of services, a lot of software has been tried, you know, they try to just be software solutions, but the problem is if the ad sucks, if the creative sucks on that, you know, on their, in their ad software, it's not their software's fault. So often they're asked for those services, right? And so a lot of my customers, a lot of my buyers right now have two or three that are actually software companies looking to acquire additional services capabilities. Now, the question becomes what happens to clients, you know, if there has to be matches there and those types of things as well.
And then the last one I would just say is there is the traditional institutional buyer out there that we've seen, if you're an owner in the space you probably have been called on by them. But some of those are just really just looking at whole spaces and investment. They really aren't adding expertise other than maybe resources, internal resources, operations, HR, finances, things like that. But for the most part, they're just looking to buy agencies and just keep them growing as investments. Again, sort of in a roll-up type of situation, but more of a hand-off, if you will, a corral of investments to grow something larger. So it depends how you define those buckets, but those are some of the kind of the buyers that are out there right now.
Paul Sonneveld
Thanks, Chris. Really appreciate you restating those, just clarifying that. And thank you. Sorry, I can't see your name, but I appreciate our LinkedIn audience there for asking that question. A couple of two quick ones before we wrap up. Going back to Arthur's question, he's very interested in the split between upfront versus earn out. Is it 10%? I think later he says it's 40%. It all depends. But what is a realistic expectation? I think you covered it briefly, but it'd be good to restate that.
Chris Fryburger
It really depends. One of the biggest questions before that is what cash is on the table. The deal can have different structures as far as it could be 75% cash and then based on some equity of a larger entity, or there could be a lot less cash and things like that. So that number, what is the first check that you receive or what's the percentage of that? you know, I haven't typically, you know, the ones I've seen is it's closer around 50%. And then there's another two checks smaller, just like 20 50 20 25, kind of thing based on performance, just roughly. But I've seen those numbers all over the place. It really depends, again, how it's structured.
Paul Sonneveld
Thank you. This was a great one to finish on, I think. So thank you for asking this question. So we've talked about all this. It's a great way to sum it up, but let's make it practical. How do you even start this process? And, you know, for me, it always seems to be this challenge of, you know, how do you kind of, you don't really want to put a billboard out in front of your business on your website going, we're for sale, because, you know, what does it say in the right message to clients and prospects? So, you know, how do you get into this and how do you start?
Chris Fryburger
And so the short answer is you enter the M&A world, right, and of which I help in a couple degrees. But to get started, really, you're going to look at three kind of three phases. There is a preparatory process to this. So, again, the sooner you're thinking about it, even if you're thinking about it now, you should start having conversation. Read my report, talk to me, or I can introduce you to some M&A firms that'd be happy to walk you through the process. But really, there's some things you'd be working on now. And depending on how much a window has how compressed and how much time that takes you to do those things, again, putting your best suit on to go forward is the first step in this process.
But to answer your question is then how do I go to market? That's the responsibility of your M&A advisor firm. They're going to have some connections, be able to put you in some of their investment networks. It depends on the firm as to who they can lure in. They may have more institutional buyers. They may be more connected with other Amazon agencies.
But what Nreach brings to that process at that point are the buyers. mainly the function of nReach is to matchmake. Right now, I have dozens of buyers that are looking for different types of agencies. Some are looking at everything that's going by. I want to hoover up and really take a strong look at anything that goes by. So the short answer to your question is through your M&A representative, which again, I can help you with. And then the combination of nReach is really, at that point, then we can have dozens of conversations.
But this is not something you would want to advertise. It's not something you'd want blanket out there for the reasons that Paul, you mentioned is that it's something that you want to custom match. These are very serious conversations that you obviously want to have your best face forward and those types of things. And it's not something that you really want to use a broker for or something you want to kind of go to the open market for unless it's a last alternative and you may, for instance, be too small. You may have issues with your business. You may need to get out sooner than later, in which case those brokers and some other functions can have become useful. But for the most part, you're really looking at handheld introductions.
Paul Sonneveld
Great. Chris, I think we're going to have to wrap it up there. Just to our audience, apologies, we haven't got to all of your comments and questions, but both Chris and I will jump into the comments section on LinkedIn and provide some verbal answers there.
Chris, huge thank you for coming on, sharing all your insights and knowledge around this space. As we can see from the range of questions we're getting, it's a very a hot topic right now. And I appreciate there might be people here who would love to sort of pick up a conversation with you, explore some things, bounce some things off you. What is the best way for them to get in touch with you?
Chris Fryburger
At best, I'm Chris at nReach. It's InReach without the I. And on LinkedIn is always best. We'd highly recommend folks to read some of the reports that have been going out. It's kind of a journey for me, kind industry, getting our arms around what's going on, especially with the last few weeks and the prior months to that and the coming months and things like that. So, you know, there's a lot of answers in there. Happy to follow up that with a range of meeting and have further discussion around all of this and then ultimately help you find an exit as well.
Paul Sonneveld
Awesome. Thank you so much, Chris. Really appreciate your time.
Chris Fryburger
Appreciate it.
Paul Sonneveld
All right, everyone, that is a wrap for today's session. Now, if you are an agency owner and considering your next move, make sure you check out Chris's Q2 2025 Amazon Agency Investor Report. We will put a link on our website with all of the show notes in there as well, probably in the next 24 hours. So it will be there too.
This session has been recorded and anyone who's registered will receive a recording of that. So feel free to share that with your broader network. And of course, head to merchantspring.io either if you're looking for agency analytics or if you're just looking for a wealth of other resources, particularly around agency best practice and topics that agency owners should be thinking about. That's merchantspring.io. I'm Paul Sonneveld. See you next time. Take care.
