How To Sell An Amazon FBA Business

How to sell your Amazon FBA business

So you’ve built up a successful business using Amazon’s platform and now you want to cash in and enjoy the fruits of your labor? Firstly: congratulations. But secondly, it’s important to be aware that there are many more things to consider than simply listing your business for sale and waiting for someone to come along and click a ‘buy’ button.

This is a guide on how to sell an Amazon FBA business. 

You’ll have to think about whether you actually can sell your business, you’ll have to settle on a multiple that will reflect all the hard work you’ve put in, then there’s finding the right time to sell and to the right buyer, and of course where to sell it.

Latona’s can help you with all of that and make the sale of your Amazon FBA business as simple and straightforward as possible, whatever the size of your operation. We have years of experience in selling Amazon FBA businesses, large, medium or small, and we have over 20,000 globally-vetted buyers who are waiting to buy yours. 

Can I sell my Amazon FBA business?

Before you begin the process, you will want to ask yourself the question: can I sell my Amazon FBA business? To answer that, you will have to think about a number of things that are likely to impact how attractive it is to buyers.

The first and most important factor is whether it is performing well, or at least is showing signs of growth or promise so that your buyer knows it has the potential to perform even better in the future. If your business is actively growing then you will be in a great position to sell, if it is merely “stable” then you could still be an attractive proposition, but even if times are a little tougher then there could be buyers out there who specialize in turning things around. 

Linked to this will be your customer base: do you have a solid number of repeat customers who keep coming back and coming back? Are you attracting new customers? Are those customers satisfied with your offering? Are your Amazon reviews strong and positive?

The reputation of your business, and perhaps more importantly how you can demonstrate that reputation, will be key to maximizing your sale price. Your business will have to be at least a year old, and ideally will have been around for longer than that. 

This doesn’t just apply to your customers either: a good relationship with your suppliers will be very important, as your buyer will want to know that they will be taking over an effective supply chain. 

How individual your business is will also be a contributing factor: if you have a unique and successful USP, it’s probably more likely that your business will be sellable. 

You will need to be able to demonstrate that you have been compliant with all of Amazon’s policies and practices: you will be much less likely to find a willing buyer if there are likely to be problems with the platform you will be operating on. 

Finally, one thing you should consider is how easy it is to explain your business to a prospective buyer. If you can clearly articulate the business model, what you sell and how you make money, then whoever you are looking to sell to will be able to easily and clearly comprehend what they are buying. 

There’s a lot to weigh up here, but Latona’s are here to make the whole decision-making process clear and easy. 

Valuing your Amazon FBA business

There is no exact science behind the multiples for your Amazon FBA business, but it will depend on a wide range of factors. 

The most obvious is revenue and profit. Buyers will look at how much profit you have generated, and will be able to generate in the future, and base their decision on that.

There is not a hard and fast rule, but this is where Latona’s can help you. Using our experience and expertise, we can guide you through the process of assessing all the various factors and settling on multiples that will reflect your hard work, and be attractive to the market. 

How you achieve your revenue and profit will also be important in determining the value of your business. The volume of sales required to reach those figures will have to be taken into account: if your business requires a large amount of time to run and reach your revenues, then it may be less attractive to a buyer and thus decrease its value. 

Whether you are particularly reliant on a single product will impact your business’s value as well: prospective buyers may have more confidence, and thus be more willing to pay a higher price, for a business that achieves its revenues from a wider range of products, which protects it from supply chain problems, manufacturing issues and a number of other factors that might be out of your control. 

Your cost base will also be important. If a buyer can see a business that doesn’t require large amounts of investment to actually acquire your products before selling them, they may see the possibility of increasing revenues and profit in the future, meaning they might be happier to pay a higher price for your Amazon FBA business. 

You can include marketing spend in that too. If a significant amount of your revenue goes on marketing, then prospective buyers might take that into consideration when settling on an amount they are willing to pay. 

The maturity of your business will influence multiples: you don’t have to have been going for decades, but a strong track record and evidence of some staying power will clearly maximize the price you can expect to achieve. It will also be much easier to demonstrate your earnings, and for your buyer to project future earnings, if there are multiple years of records available. 

And, of course, customer satisfaction. Remember that the people who buy products on Amazon won’t much care who is behind a business, but they do care whether that business is reliable. Having a range of frequent and high-quality reviews will boost your business’s price and attractiveness to potential buyers. 

When is the right time to sell?

If you’ve decided that you do want to sell your Amazon FBA business, whether to simply cash out for retirement, to fund another venture or you have simply come to the end of the line, the timing of when you sell is crucial. 

From your personal perspective, you will want to consider why you are looking to sell. Is it starting to feel like a chore to run? Are you simply not enjoying running it? Is it taking more time than it is ultimately worth? Is there someone else who could take it further? 

Ideally, the best time to sell is when your business is at its peak, or somewhere close to its peak. If revenues and profits are high, then your business will be at its most attractive and Latona’s will be able to get a wide range of potential buyers. 

Is your business seasonal? If so, you may want to wait until your sales are peaking before you actively try to sell. Let’s say you have an Amazon FBA business that specializes in Christmas-related products: trade is obviously going to be much stronger in December than April, so trying to sell at a peak time may make it much more appealing.  

As mentioned elsewhere, it’s important that you don’t try to sell your business too early. If, for example, you have been trading for under a year, then there will simply not be enough available evidence to demonstrate that yours is a business worth buying. In an ideal world, your business should be around three years old before you look to sell. 

Do not despair though: even if some of this advice doesn’t apply to you, Latona’s can help you find a buyer. If your business is not at its peak, there are plenty of buyers out there who specialize in building up Amazon FBA businesses that are not at their peaks, and there are some who are better at scaling businesses. 

Planning your exit strategy

Having an Amazon FBA business exit strategy is key, and Latona’s will be able to help you with the most important aspects of that process, but there are a few things that are important to do and to keep in mind. 

Once you have made the decision to sell, you might want to start by asking other business owners who have sold for advice: things that they wish they had known or done before starting the process. 

Cut any unnecessary expenses. Anything that limits your outgoings will make your business much more attractive. But at the same time, don’t stop ordering as much stock as you would normally: you want your business to run as healthily as possible throughout the sales process, so try to keep the day-to-day running as normal as possible. 

Do an inventory check of the products you sell, and essentially streamline any unproductive or unprofitable listings. If something isn’t selling successfully, then they are potentially just costing you time and may make your business look bloated and unstructured. If it isn’t positively impacting your revenue, you don’t need it.  

Ensure all your financial records are in good shape. Anyone looking to enter into discussions with you will want to see how the money flows in and out, so ensuring that they have clear and up to date information will make the process much easier for everyone involved. 

Write a “user’s manual” for your business. Buyers will often be looking for a business that doesn’t require much time to run, and if you can clearly lay out the processes required, ideally detailing what sort of work needs to be put in, then they will have a clearer picture of what is on offer. This could also speed up the selling process: if you have a comprehensive rundown of what your business requires, then you hopefully won’t have to keep answering questions about it. 

This might include details of any employee and supplier contracts. If you don’t have these, then don’t worry about it, but if you have a network of people and other organizations that help you out, then anyone looking to take over from you will need to know about them. 

If all of these things are in place, then you will have a clear and clean-looking business that will be attractive to any potential buyers. You’re then ready for Latona’s to guide you through the actual sale of your Amazon FBA business. 

Finding a place to sell your Amazon FBA business

It can be a daunting, even emotional process to sell your Amazon FBA business. After all, you have probably put a huge amount of blood, sweat and tears into making it a success, so you will want it to go to the right place, both in terms of the return you will get for the investment of your time and money, but also you don’t want that to go to waste by selling it to the wrong person. 

You could try to sell your business on your own, but it can be a complicated process and without the requisite experience in doing so, things could go wrong and you might not get the best terms for your sale. 

There are many things to consider, including negotiating the sale, getting all the right documents to inform Amazon of the change in ownership, arranging all the paperwork and legal processes required, plus all the other unforeseen complications that can come with a deal like this. 

This is where Latona’s can help you out significantly. We have years of experience in matching the right Amazon FBA business with the right buyer. Regardless of the circumstances, we can take the stress out of the sale. Our weekly newsletter goes out to over 20,000 potential buyers, all waiting for the perfect opportunity. 

Selling your Amazon FBA business with Latona’s

So why should you sell your Amazon FBA business with Latona’s?

Put simply, we have been connecting business owners with buyers and investors since 2008. We have thousands of happy customers that our FBA brokers have helped maximize the price and minimize the stress in selling your business. 

There are no upfront fees, our brokers operate with the utmost professionalism, we won’t pressure you to take one option over another, the only thing we are interested in is getting the right deal for you. The funds from any transaction will be held in a safe escrow account until the process is completed, and we vet all our buyers to ensure that you are protected. 

The whole process will remain confidential: all parties will sign mutual NDAs to ensure that all information about your business, product, customers and inventory remains strictly private. 

We have the largest group of globally vetted buyers in the industry, and it is our sole aim to find exactly the right person for your Amazon FBA business, and to guide you through every step of the sales process to make things as stress-free as possible. 

We pride ourselves in being able to find the best buyers, regardless of the circumstances. So if you’re thinking about selling your Amazon FBA business, look no further than Latona’s, and get in touch for your free, no obligation evaluation TODAY!