How To Sell Your Amazon FBA Business Easily & Profitably in 2023
COO at Margin Business
Table of Contents
Selling a business can be daunting, especially if you haven’t done it before, so it helps to understand the process and prepare in advance. Planning and preparation is the only way to ensure you get the best price for your business.
Fulfilment by Amazon or FBA makes running an online business easy, so buyers find these businesses appealing. Still, you’ll have to convince the buyer that your business is as valuable as you believe it to be.
We’ve compiled a guide explaining how to sell your Amazon store to gain the best returns on your investment.
“In recent years, aggregators have entered the market. These investors look for successful Amazon FBA businesses worth more than $1 million.
Why Consider Selling Your FBA Business?
Many people dream of owning a business. Yet, business owners face many stresses. You may handle many specialised portfolios like marketing, sales, logistics and finance. The stress of running a business may have become a drain on your reserves.
Perhaps, you’ve reached the point where you want more time to enjoy family or leisure time, or you may have another business venture you want to finance.
The reasons for wanting to sell a business are as distinctive as the people who own them. If you’ve reached the point when you’d like to try something new, the time may have come to sell your FBA business.
The Right Time to Sell Your FBA Business
There isn’t a particular time that stands out as the right time to sell your FBA business. E-commerce businesses sell well throughout the year. This is good news because it means that you can choose the time that best suits you. You’ll need some time to prepare for the sale to get the best price for your business.
Who Are The Potential Buyers Of Your FBA Business?
If the value of your FBA is less than $1 million, it will likely attract the attention of buyers wanting to expand their eCommerce business or enter the market for the first time.
In recent years, aggregators have entered the market. These investors look for successful Amazon FBA businesses worth more than $1 million. Aggregators, like all buyers, want a business with good growth potential and solid financial statements.
How to Sell Your Business for Maximum Valuation
You’ve spent time and effort building your business, so you want the best price when you sell your Amazon eCommerce business. Take the time to prepare for the sale, and you’ll reap the benefits.
🚀 Have An Exit Strategy
A well-developed exit plan will ensure you get the best price for your business. If, for example, your FBA business valuation is less than you had hoped for, you can make corrections and improve the business before you place it on the market. You may have to take some actions to enhance the value.
🚀 Register For Brand Registry
Avoid the perils of counterfeit product offerings by registering your brand on the Amazon brand registry. You will gain the trust of buyers who know your brand is genuine.
Brand registry registration also helps to knock counterfeit products off the listings. Amazon Brand Registry tools allow you to detect and report infringements so they are blocked before they affect your sales.
🚀 Diversify Your Store & Revenue Sources
Any good investor will advise you on the importance of diversification. It is no different in business. Diversification reduces risk. Diverse products, income streams and services make good business sense and make your business more attractive to potential buyers.
- Add carefully chosen products to your range. Complementary products make sense as you can bundle them and cross-sell them.
- Find content writers looking for affiliate marketing opportunities. Finding leads through connected content makes you less dependent on a single traffic source, extending your reach.
- Consider opening storefronts on other platforms like Shopify or Etsy.
- Spend time on social media and consider using an influencer to attract new traffic.
🚀 Product Reviews
Products with good customer reviews generally sell well. Customers who purchase online must rely on others to endorse the products they’d like to buy. Actively work on getting customer reviews by sending a follow-up email requesting a review.
🚀 Optimise Your Supply Chain
Your supply chain management skills will ensure that you always have stock of the right products in the right quantities. Without a well-oiled logistics system, your business can’t grow. Customers with unfulfilled orders will lose faith in your brand and move on to your opposition.
If logistics planning is not your strong point or requires too much time, it may pay to hire a third-party logistics company to transport your products from the manufacturer to the FBA fulfilment centre.
🚀 Get Your Finances in Order
Any buyer interested in your business will want to see a solid set of financial statements, including a balance sheet and income and cash flow statements. If you don’t already produce a set of monthly accounts, you’ve got some work to do. If accounting isn’t your strong point, find a bookkeeping company to assist.
The Amazon FBA Business Selling Process
As with any business sale, there is a process to follow if you want to sell your Amazon eCommerce business.
🚀 Find the Perfect Channel To Sell Your Amazon FBA Business
There are various sales channels that you can use to sell your Amazon FBA business. These include;
- Direct sale – you can personally find potential buyers and approach them with a proposal.
- Auction – use an auction platform.
- Marketplace – list your business for sale on a business-for-sales network.
- Broker – hire a professional to sell your business.
Each of these has pros and cons, so take your time to consider the best match for your business sale.
🚀 Obtain Legal Advice for Your Business
If you plan to sell your Amazon FBA business you’ll need legal advice. At some stage, there will be a contract of sale transferring the business from you to the new owner. You must understand all the implications to avoid problems during or after the sale.
🚀 Business Valuation
Though sales and income are the most important determinants of business valuation, they are not the only factors influencing the value. Valuation factors include.
- Age – If your Amazon business is less than 12 months old, you’ll have a hard time convincing a buyer that your business is valuable. Your business needs time to develop a brand, a customer base and a good reputation before you can claim that it has any substantial value.
- Long-term growth – historical figures should show that your business has grown consistently and still has potential for future growth.
- Business type – Amazon FBA businesses fall under three categories, resellers, private label and proprietary businesses. A proprietary business is the most sought-after and highly valued because it has a unique product offering which can command a premium.
- Clear financial records – These should include an income statement, balance sheet and cash flow statements. Your buyer will also want to understand your sales forecasts and the business growth trajectory.
Well-run business operations – you must show careful control of assets, happy customers and on-time deliveries.
🚀 Find A Buyer
Once you’ve decided to sell, you must find a buyer. An Amazon business broker will connect you with buyers looking for an FBA business but will charge you a commission for their services. If your business is big enough to attract the interest of Amazon aggregators, you could sell directly through their skilled negotiation teams.
Many FBA sellers prefer to keep an interest in their business even after they have sold it. If this is your plan, your best option may be to approach the buyers directly.
🚀 Negotiate a Profitable Deal
For some sellers, the negotiation is the most difficult of all the processes required to sell the business. You’ll need all your financial statements to show the true value of your business.
You will have to highlight the current profitability and your business growth potential, so it is essential to prepare well in advance. Don’t let emotions get in the way of negotiating a fair price.
Knowing the value of your Amazon FBA business and your long-term financial goals should help you to find a fair deal on which you and the buyer can agree.
🚀 Transferring an Amazon FBA Account or Listings
The process of transferring your Amazon account will take a month or two. There are two ways you can do this. You can transfer the entire business or your Amazon seller account.
If you choose to hang onto your Amazon seller account, you can opt to transfer your listings. Listing transfers can take up to three months to complete.
🚀 Due Diligence Process
Due diligence is the process that takes place before the conclusion of every business sale. It is the practice of thoroughly investigating and evaluating a potential investment. The process includes a review of financial statements and records, background checks, and an assessment of the overall health and viability of the business. The goal is to identify and evaluate potential risks that could impact the investment and to make an informed decision about whether to proceed.
If you have decided to sell your Amazon FBA business, you’ll need to plan to make the best of the opportunity. Amazon FBA is recognised as a relatively easy way to get into the business of eCommerce. So, if your business has done well and has the potential to grow, you should find plenty of buyer interest.
FAQs
You can sell your Amazon FBA business if you choose through a private sale or using a broker.
You can buy an Amazon seller account, but there are certain conditions you must meet.
Selling an FBA business can take weeks or months. The length of time it takes will depend on the value that the buyer sees in your business and your negotiation skills. The buyer will also want to do due diligence, which will take some time.
About the Author
Emilie Angri
Connect @ LinkedIn
📢 COO at MarginBusiness. We Don’t Just Translate your Amazon Listing – We Localize, advertise and optimize to instantly grow your amazon sales – Images, Content, and Ads. Building up knowledge in the Amazon Industry since 2011 to consult EU and US sellers.
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