When Should I Sell My Amazon Business?
There’s no definitive marker that works the same for everyone when considering the right time to sell their Amazon business. For some, an eventual sale may have been part of the initial plan. For others, it may become a goal after a period of success to gain a profit and hand the keys over to someone else. While there may not be a set time that applies across the board, there are certain factors that come into play if selling is in your future.
If you’ve reached a point where you’re wondering what it would take to sell your Amazon seller account and turn a profit, you’ll want to first determine if you meet buyer criteria and research potential buyers that meet your own. Though every business wants to sell at the peak of profitability, it’s important to weigh all the reasons why you want to become a business seller and be open to what you’ll gain by walking away.
Ensure Your Amazon Business Meets a Buyer’s Criteria
Every business owner has different goals with regards to profit and growth. In order to sell, you want to align your business with the criteria set forth by potential buyers, which will vary. At Forum Brands, we look for a specific list of criteria for those who wish to sell their Amazon business that includes:
- A remarkable brand popular among consumers
- A business that falls into a consumer category that’s essential for everyday life
- A variation of products that’ll be in demand for the long-term
- 70 percent or more of business sales through Amazon FBA
- Demonstrated financial success of at least $200K in net profit in the last year
In general, consider the profitability of your business and how much it's grown since the beginning. Are you able to demonstrate increased steady profits and an expanding and engaged audience? Are your products sustainable in an ever-changing marketplace? Also, what about your brand makes it a favorite among consumers and would entice them to continue buying from you in the future?
A potential buyer looks at how well your online business is doing now, but also takes into account how well it will do down the road. If you're a business owner who thinks they're in a strong place with a solid foundation, you may meet the general criteria most buyers are looking for in order to sell for a profit. Or, at least know the additional steps it’ll take to get to a fair selling place.
Find a Buyer That Fits Your Needs
The hard work and dedication that comes with building an online business adds personal value you’ll want to protect. You’ll want to work with a company that’s reputable, experienced, and efficient in their approach to establish a positive exchange. Forum Brands will walk you through four straightforward steps once you’re ready to sell your Amazon business.
First, we’ll ask you to share your story with our team during a 30-minute consultation. This allows our team to get a feel for where you’re at and what your goals are in selling. After you’ve provided some basic information about your business, we’ll evaluate if it fits our Amazon FBA business model. If it does, we’ll continue the process by assessing your business’ financial information and criteria. After this evaluation, we’ll provide an initial offer, typically within 48 hours.
From there, once we’ve come to an agreement on terms, our team will finalize all the details and create an integration plan. By working together, this step can usually be completed in a few short weeks before the fourth and final step of cashing out. Once everything is in place and ready to go, you’ll be able to take home your selling profits in just one day.
Once you’ve decided you want to sell and have found a potential buyer that matches your criteria and vice-versa, here are a few tips to keep in mind to verify your business is in shape to sell.
How to Sell FBA Business
Preparing your Amazon business for sale requires organization. If you’ve kept meticulous records from the beginning, you’ll be in good shape come time to sell. However, you’ll want to review everything and confirm any loose ends are wrapped up and all information is up-to-date. This includes:
- Managing FBA inventory
- Organizing financials
- Boosting sales revenue
- Preparing for transition
Since these steps are part of scaling growth, keep in mind there will likely be months of preparation prior to the actual time you’re ready to sell. Click the following link to read an Amazon FBA step by step guide to this sometimes intimidating process.
Manage FBA Inventory
When determining how to sell your Amazon FBA business, you’ll want to ensure inventory is accurate and categorized correctly. The Manage Inventory page of your Seller dashboard allows you to view and sort your inventory, manage pricing, close and delete listings, among other administrative tasks. Going through this process helps to clean up your Amazon store and eliminate any duplicates or old listings that may still be lingering around.
Creating uniform listings raises your Inventory Performance Index. This metric gauges your business’ performance over time and alerts you to areas that may need attention, such as reducing excess inventory to increase profitability or fixing stranded listings. Additionally, as you grow your business and prepare it for sale, use inventory reports to assess Amazon product trends. It’ll make it clear which items are top sellers that regularly require new inventory, as well as show the ones that don’t call for as quick of a turnaround for sales.
When selling a business, buyers always want to see the financials. Keeping accurate profit and loss records is crucial. Having these readily available makes it easier to navigate and determine profitability. At the very least, you’ll want to know:
- How much revenue you’ve made in the last three years
- Percentage of growth year-over-year during this time period
- Number of customers, orders and conversions
- Value of your current inventory onhand
Depending on the type of business you’ve built, you may also be required to share the number of wholesale accounts you’ve acquired and monthly operating costs. Organizing financials is a crucial step of the selling process. Inaccurate records or mistakes create a red flag for buyers and prolongs the timeline, and may even deter a sale. Even if you’ve kept careful records over the course of your business, it’s best to review them again, possibly with a third-party expert. Arrange them in a way that’s easy to review and clearly illustrate value.
Boost Sales Revenue
Having a high Amazon sales revenue is good, but consistency is better. Part of learning how to sell FBA business inventory is refreshing your product listings to meet Amazon’s requirements, presenting a uniform display of information, and optimizing the best results. This involves investing in ways to drive traffic to your listings, which include advertising and optimization.
Part of learning how to sell Amazon FBA business inventory is refreshing your product listings to meet Amazon’s requirements, present a uniform display of information, and are optimized for best results. Some of the basic tips to follow are making the description easy to read, using keywords at the beginning of your product listing and in the bulleted features, and showing how the product looks and works by providing clear, hi-res photos and videos.
Creating and distributing monthly reports that highlight revenue trends by product, season, and other factors shows transparency for times when sales are slower month-over-month, and how you’ve accomplished steady revenue growth annually.
Prepare for Transition
Part of preparing your business for sale requires making a list of website domains, Amazon seller account information, hosting accounts, and website and Amazon listing files and documents. Other assets you’ll want to review and scrub are business customer lists, vendor contacts, and social media accounts. Although most high-profit Amazon FBA sellers allow Amazon to handle customer service, most businesses also establish their brands through a separate website, newsletters, and/or social media activity.
Cleaning up the client list by removing duplicates and filling in any missing information is helpful as you prepare your business for transition. Also, deciding how you’ll communicate the switch to your customers and followers is something that should be planned in advance. Take a moment to show gratitude for their business and what changes, if any, they’ll see as your business goes through this transition.
Finding the Right Timing
The right timing of selling your Amazon business means many factors have to come together at the right time in the right way. Whether your years away from selling your business or thinking about selling in the next few months, you’ll want to update and organize your inventory, assess your financials, and continue to boost your sales revenue. Consistent profitability is the top factor when selling your business, but this can’t be demonstrated without detailed organization.
Once you have your company in the best shape possible to meet selling criteria, you’ll want to find a buyer that fits your needs with a process that’s efficient and straightforward. Working with a company like Forum Brands that’s well-versed in Amazon business acquisitions makes the process smoother and delivers a timely payout for the business you’ve tirelessly built.
If you have more questions like how does Amazon FBA work or is Amazon business worth it in 2021, click the provided links to read our useful information.