How to Sell an Amazon FBA Business

Fulfillment by Amazon (FBA) has become one of the largest and most exciting ways to make money online. Labeled by some as a new frontier in peer-to-peer e-commerce, FBA enables millions of merchants to leverage Amazon’s distribution network and customers for substantial financial rewards.

A well-developed FBA business is an attractive online business to own and has become an appealing investment opportunity for business buyers. In this post, we leverage our experience selling over 1,200 technology businesses and go in-depth on what makes FBA businesses more valuable to a buyer, how to increase the value before a sale, and how to sell an Amazon FBA business.

Intro to Buying & Selling Amazon FBA Businesses

More than 2 million entrepreneurs worldwide use FBA, which allows them to sell on Amazon’s e-commerce page and automate their fulfillment process for a fee. The value of FBA to the entrepreneur depends upon the type of products sold. For example, businesses that sell high-dollar and large items typically find using FBA more profitable than doing their own fulfillment. FBA is a popular business model for both buyers and sellers, and depending on the type of business, FBA may increase the business’s sales value.

Who Usually Buys Amazon FBA Businesses?

The answer to this question depends on the size of the Amazon FBA business. For businesses valued under $1 million, the buyers are often individual operators looking to enter the space or people with e-commerce businesses looking to expand their reach regarding the number of products or type of products sold.

Many larger FBA businesses are sold to aggregators, which are consumer goods companies that only acquire existing Amazon FBA businesses. These investors buy up Amazon FBA businesses and capitalize on (generally) low-selling multiples. They are looking for third-party businesses to acquire in order to build a portfolio of businesses and grow them exponentially.

Like any buyer in the e-commerce space, aggregators are looking for businesses operating with steady growth for a few years, solid and verifiable financials, and seasonality—having a product that outlasts high and low peaks in the business.

Determining When to Sell Your Amazon FBA Business

If you are looking to shift your focus to a new venture, are interested in a lump sum payment, or want to free up your time, divesting might be the right choice for you and your business. Timing is critical when it comes to resulting in the most optimal outcome for you and your business. You should plan to sell your business when it is most attractive to potential buyers. If your Amazon FBA business has a high season, as many do, you should look to sell during or right after this period. For example, if your Amazon FBA business sells holiday lights, selling in January likely will make sense since sales and margins will be highest at that time of year, and your business will look most attractive to prospective investors.

How Long do FBA Businesses Take to Sell?

The sale of an Amazon FBA business could take weeks or months to complete. The length of time required to sell an FBA business depends on several factors, including:

• The type of business. Proprietary and private label businesses are generally more attractive to buyers than resellers and tend to sell more quickly.
• The complexity of the business. Generally speaking, the less complex the company is, the more quickly it will sell.
• Value of the business. Generally, smaller companies will sell more quickly.
• The business’s financial performance.
• How well the seller prepares the Amazon FBA business for sale.

It’s important to remember that rushing a sale is always a bad idea. Finding the best price and making a smooth transition are more significant factors than the speed of the sale.

Current Trends in the Fulfillment by Amazon (FBA) Market

E-commerce is thriving in mid-2022, with global e-commerce sales expected to total $5.5 trillion this year. By 2025, it’s estimated that this number will reach over $7.3 trillion, and e-commerce will comprise 23.6% of all retail sales. The demand for e-commerce businesses is high and will only continue to expand. This increase is partly due to the pandemic shifting consumers’ behavior— with most people spending an extra hour online daily, a trend that is holding fast.

Amazon is a significant leader in the e-commerce market, with more than 300 million active customers in more than 180 countries and 150+ million Prime members worldwide.

A considerable portion of Amazon’s business comes from third-party sellers. In fact, Amazon’s third-party e-commerce sellers sell more products on Amazon via its Marketplace platform than Amazon sells itself. Third-party marketplace sellers first joined Amazon in 1999 and now account for more than half (58%) of Amazon’s business, while in 2013, they accounted for 40% of Amazon’s business. Third-party sales have been growing and continue to do so. Currently, third-party sales are growing at 52% a year, while first-party sales by Amazon are only growing by 25%.

The marketplace is vast and growing, with Fulfillment by Amazon (FBA) at its core. FBA provides its partners with tremendous opportunities. Products fulfilled by Amazon are housed at Amazon fulfillment centers. There are over 175 centers worldwide, and sellers benefit from Amazon’s customer service and unbeatable shipping policies, including Prime.

It’s no surprise to hear stories of how early movers in FBA made a lot of money in a short period of time. Tales of sellers going from 4 to 6 figures in monthly sales overnight are not uncommon. Some well-known bloggers like Spencer Haws at Niche Pursuits and Chris Guthrie at UpFuel have been experimenting very profitably.

With many successful FBA businesses up and running, it’s only natural that business owners are starting to think about their options for a potential sale.

Step 0: Start Your Exit Planning In Advance

Before any sale can occur, an exit strategy must first be in place. You can add hundreds of thousands of dollars of additional value to a business by taking the proper steps before a sale.

Naturally, not all of the valuation factors are addressable (e.g., competition in the niche), but there are several strategic moves you can make to increase the value of your FBA business before a sale.

Below we discuss 11 key topics to think about in the run-up to the sale.

Suppliers

As discussed above, suppliers are essential to the FBA business model. Aim to tie in suppliers and terms with contracts where possible. A straightforward operating procedure for working with each can easily be handed off to a buyer. Document and automate that process if possible (more on that below).

Favorable storage terms with suppliers can also be a positive if it is possible to negotiate this for bulk orders and maintain a reasonable lead time for shipping the inventory to Amazon. This is to reduce the storage fees paid to Amazon and reduce the business’ overall exposure to increasing storage fees in the future.

Brand Site

Create your own brand site if you don’t have one already, and start actively driving traffic to it. Sign up for the Amazon Affiliate Program and make sure you’re earning the affiliate commission for the customers you are bringing to your products.

Actively blogging about the products and niche will add more credibility to the business, keeps your brand name top of mind, and is another avenue of customer acquisition.

Brand Protection

It is worth ensuring that all the products you sell have been registered through Amazon’s Brand Registry. This will preserve the integrity of your brand and stop other sellers from trying to sell products on your listing. It also reduces matching errors in search. Ultimately, it makes your business more defendable and, thus, more valuable to a buyer.

Registering also allows you to access tools through your Amazon Seller Central account that will help you improve the way your product listings appear.

Organize Your SKUs

Having too many SKUs makes your FBA store difficult to maintain and less attractive to buyers. List products that sell well and generate the best profit margin; eliminate SKUs for the rest. The ideal range of products is about three to eight.

Wholesale Contracts

Resellers are the most challenging type of FBA business to sell, so you’ll want to do everything you can to outshine your competitor. When several resellers are selling simultaneously, they compete for the buy box, or the white box on the side of the product page that directs customers to add the item to their cart. Amazon’s buy box algorithm weighs high seller metrics and price. A buy box position dramatically improves sales, which, in turn, improves how your business will look to prospective buyers. If you lack excellent metrics, you may have to focus on lowering your prices to claim the box. To reduce your prices, you may first have to find a way to lower the cost of goods sold.

Cash Flow/Credit Terms

One of the most significant issues for Amazon FBA sellers is cash flow and finding money to reinvest in greater supplies but lacking the reserves to do so. Advantageous credit terms with suppliers can help with this, though it may preserve only very high-volume businesses.

Product Reviews

Simply put, well-reviewed products are well-revered by customers and investors alike. Using a tool like SalesBacker can automate post-sale customer follow-up and significantly increase the number of reviews on your products. This will likely create a halo effect around your quality products for future sales and is a positive selling point to investors.

Email Capture

One of the main gripes with FBA is the loss of customer information to Amazon.

Driving email opt-ins on your brand website or including a business card with your product that incentivizes customers to put their email into a landing page are both excellent ways to build a list.

Email lists are valuable for generating traffic to your products and creating interest in future product launches. They can be a sustainable traffic source and an awareness generator for your brand, both of which are valuable to a buyer.

Amazon Best Seller Rank

Amazon’s platform recalculates the Best Seller Rank hourly based on recent and historical sales. An Amazon Best Seller Rank can be crucial to a buyer.

A business can improve its seller ranking by ensuring all relevant keywords for your product are in your keyword list. Optimizing the product description and your product’s visibility on the Amazon store will provide a boost, as well.

Account Health/Restricted Categories

All FBA seller accounts have a health status and must meet specific criteria if you sell in a restricted category e.g., beauty, health, personal care, etc.

Below are the requirements that must be maintained to sell in a restricted category:

• Order defect rate: < 1%
  • Pre-fulfillment cancel rate: < 2.5%
  • Late shipment rate: < 4%

Even if you aren’t selling in a restricted category, you should still be around these levels to not fall foul should Amazon move the goalposts.

The above is a collection of strategies, but there are likely more depending on your specific situation. It’s worth speaking with an M&A advisor to formulate those before a sale to promote the salability of your FBA business.

If you’ve had an exit strategy in place and have been putting effort into the strategies noted, you’re likely ready to take actual steps in selling your Amazon FBA business. Let’s go!

Step 1: Obtain Legal and Escrow for Amazon FBA Businesses

Amazon FBA business owners who are considering selling their business must retain legal counsel early in the process. If a reputable M&A advisor is being used to advise on the sale, they will advise on any legal steps that need to be taken. Certainly, non-disclosure agreements will need to be put in place before any proprietary information is divulged. And if a sale of the business is agreed upon, an attorney will help finalize the terms and the deal.

In these matters, it is wise to use an attorney with extensive experience in dealing with the unique intricacies of online businesses. A seasoned M&A advisor will be able to facilitate this. Read about additional legal steps that sellers should take well before a sale in our articles on valuing an E-Commerce business and selling an E-Commerce business.

Step 2: Decide Which Selling Route You’ll Take

If you’re looking to sell your Amazon FBA business, you have four main options available to you:

• Marketplace – list the business for sale on a classified business-for-sale network like BizBuySell or BizQuest
• Auction – sell through an auction platform
• M&A advisor – hire a professional advisor to sell the business on your behalf
• Direct – cold approach potential buyers and sell the business yourself

There are advantages and disadvantages to each of these approaches, which we cover briefly below.

Marketplace

Selling your FBA business on a marketplace means preparing information on your business and posting a listing to generate interest from buyers that peruse the listings. A popular marketplace is BizBuySell.

Pros:

• Low cost – a listing fee with added features is only a few hundred dollars.
• Large distribution – if you list on a large, reputable business-for-sale network, then your ad has the potential to be seen by a lot of visitors.

Cons:

• Low demand – marketplaces serve a high volume of listings daily, and standing out from the crowd is often a problem. Most buyers perusing the listings look for listings with brokers (who use them as well) as they know the listings are likely pre-vetted.
• Process – you must take care of the process of vetting qualified buyers, sending out non-disclosure agreements, answering questions about the business, negotiating offers, running due diligence, preparing a contract for sale, and facilitating the transfer of funds/assets. If you don’t have experience in a business sale process, you could come stuck in several places. It will also take your time and attention away from running your business.

A marketplace listing can work if you have a lot of experience selling businesses and you have the time to run a sale. Otherwise, it can be a long, high-effort way of finding a buyer. A marketplace sale, on average, takes about 6-9 months.

Auction

Selling your FBA business on an auction platform is like a marketplace listing in that you’ll prepare similar information and run the process yourself. The difference with an auction scenario is that there will be a fixed period for the business to sell, creating more competitive tension amongst buyers. It is most suitable for businesses less than $5,000 in value and is used mainly for domain sales.

Pros:

• Large distribution – if you list on a large network then it’s likely your ad has the potential to be seen by thousands of visitors.
• Set timeframe – if you list for 7, 14, or 28 days, you have some certainty over the length of time to find a buyer, assuming a suitable one is found.

Cons:

• Buyer qualification – many buyers on auction platforms are not seasoned business purchasers, and many are searching for their first purchase. This means many are looking for smaller business sales (<$5,000) and are inexperienced in the sale process, which can cause difficulties during due diligence and closing.
• Value – most buyers on auction platforms are looking for cheap business sales, and the typical multiple for sale is 0.5x – 1.5x. This is likely substantially lower than what you would want to get for your business.
• Process – as above, you are responsible for running the process end-to-end. This is likely going to take up quite a lot of your time.
• Fees – auction platforms charge a fixed listing fee and a success fee of 10% upon closing, so they are substantially more expensive than a marketplace and similar to an M&A advisor but rely on you to do everything.

An auction platform works well if you’re looking to sell a small business very quickly and for a cheap valuation.

M&A Advisory Firm

Selling your FBA business with an M&A advisor is likely the best option to consider if you have a large business for sale in the $1-100M valuation range, you don’t have a lot of experience selling a business, and/or you want to maximize the sale value.

An M&A advisor will take care of the entire process end-to-end, from creating marketing materials to contacting buyers, negotiating offers, coordinating due diligence, drafting the contract for sale, and facilitating the transfer of assets/funds through Escrow. They will also help advise on your valuation and the best deal terms for your legal protection and economic benefit.

Pros:

• Large distribution – if you list with a well-established, reputable M&A advisor, you’ll gain access to their network of qualified and experienced business buyers. This means your business will be in front of a large, highly targeted investor audience that will be able to execute and close a deal in a timely manner.
• Full process – a good M&A advisor will take care of the process end-to-end once you’ve provided enough information for the initial marketing materials. You won’t have to self-support negotiation, due diligence or contracts, etc. This frees up time to continue running your business or doing your day-to-day tasks.
• Maximum value – an experienced M&A advisor will know how to value your business based on market insight and previous transactions. They will aim to court several offers and negotiate the highest one with the best overall terms.

Cons:

• Upfront requirements – to work with an M&A advisor, you’ll need to be organized and have information on your business ready. Their buyers are highly motivated, organized, and willing to execute for the right business but need the documentation prepared to do so.
• Fees – an M&A advisor will typically charge up to 15% of the sale value of the business upon successful closing. If you hire the right advisor, in almost every case, the net proceeds to the seller (sale value minus broker fees) are higher than those from a marketplace, auction, or direct sale. Here’s an excellent example from Tim Seidler, who sold his business with FE for $100K more than he thought his business was worth.

An M&A advisor is a good option if you don‘t have a great deal of experience valuing or selling businesses, don‘t have the time to spare, and want maximum proceeds from the sale of your business. A brokered sale usually takes between 4-8 weeks, depending on the size of the business (larger businesses can take longer). You can learn more about the process here.

Direct

The final option is to directly approach potential buyers (cold email or call) and persuade them to buy the business. The most efficient way is to target other business owners in the same or a complementary niche.

Pros:

• No fees – if you find a buyer yourself and close successfully, it will cost you a lot less than the other options. Likely, you’ll only incur fees for legal advice.

Cons:

• Finding the buyer – you’ll be required to do the research and outreach work necessary to find a buyer and may end up divulging sensitive information to competitors. Typically cold outreach has a low success rate – most business brokers avoid this route when selling a business.
• Process– similar to marketplace and auction, you are responsible for running the process end-to-end.

Direct works if you’ve been approached yourself (though you should still consider an M&A advisor to run a competitive process for value maximization) or if you don’t mind trying with a low chance of success. A direct sale can take 3-24 months, depending on whether you’ve had an inbound interest or you’re starting from scratch.

Step 3: Understand Your Financing Options

For most sellers of an Amazon FBA business, the desirable outcome of an exit would be a one-time all-cash payment. For many buyers, this is not an option they are willing or able to consider. Buyers typically seek to secure the best possible deal according to their available funds and risk profile. Often, to align the expectations of the buyer and seller, creative financing methods are employed. Here are the four most common financing methods used in the acquisition of an e-commerce business.

Cash

Cash typically forms the most substantial portion of the total consideration in acquisitions of e-commerce businesses. Buyers may limit their search to online businesses they can purchase with liquid assets, such as the money in their bank accounts. This can lead to buyers limiting their ability to make an offer on an otherwise desirable business. In this instance, many buyers turn to more creative and sometimes unconventional methods of raising cash. Some of these methods include:

• Cashing out retirement funds
• Borrowing against a 401k account or taking regular IRA payouts
• Revoking a Roth Contribution
• Small Business Administration (SBA) Loans
• Asset or collateral-based lending
• Bringing aboard a partner with cash and/or experience
• Peer-to-peer lending platforms like Prosper and Lending Tree
• Amazon FBA Aggregator

Seller Financing

One of the most deployed methods of financing in online business acquisitions is seller financing. Seller financing allows the buyer to bridge the gap between their available cash and the purchase price of the business by using the cash flow of the business to pay the outstanding balance over a fixed period post-closing. A seller’s willingness to agree to this type of financing has the additional benefit of showing the buyer that the seller has confidence that the business will not decline going forward.

Seller financing is popular in online business acquisitions because it eliminates the red tape of the buyer borrowing from a bank or other lender. However, it is critical to keep in mind that seller financing bears risks for both parties. Buyers must be realistic about future cash flow. A missed payment may prove costly and, depending on the agreement, can even result in the seller repossessing the business without paying back any cash consideration thus far received. Sellers should retain some collateral in the business until the buyer pays off the financing in full.

Seller financing is popular in online business acquisitions because it eliminates the red tape of the buyer borrowing from a bank or other lender. However, it is critical to keep in mind that seller financing bears risks for both parties. Buyers must be realistic about future cash flow. A missed payment may prove costly and, depending on the agreement, can even result in the seller repossessing the business without paying back any cash consideration thus far received. Sellers should retain some collateral in the business until the buyer pays off the financing in full.

Earn-Out

In an earn-out agreement, the buyer agrees to pay the seller a percentage of either profit or revenue over a fixed amount of time. Earn-out agreements are typically seen in acquisitions involving younger businesses, sites with inconsistent cash flows, or companies facing an uncertain future. With an earn-out, the buyer attempts to leverage the seller’s knowledge and resources to grow the business immediately after the sale is complete. To structure an earn-out, the buyer will need to forecast future cash flows based on historical data and micro and macro industry trends. For an earn-out arrangement to work for both parties, the buyer and seller must agree on what the site is expected to earn over the agreement term.

Given that earn-out agreements are based solely on projected revenue or profits, they carry a high degree of risk, particularly for the seller. The seller must be confident that the buyer can operate the business successfully and that they will not default on payments. Due to the additional risk, it is not uncommon for the seller to demand an extended earn-out period beyond the standard 12 months.

Because earn-outs carry a high degree of risk, sellers are advised only to consider such an agreement when the buyer has a track record of growing and operating businesses successfully. With inexperienced buyers, the risk that the business will not perform as the forecast is likely too great to make an earn-out satisfactory to the seller.

Holdback

In a holdback agreement, the buyer retains a portion of the total consideration payable under the APA until certain mutually agreed milestones or obligations are met. Examples of such milestones include:

• The seller meeting mutually agreed upon commitments subsequent to the sale
• Employees continuing to work for the firm for an agreed period of time
• Long-term service agreements being honored and fulfilled
• Agreed upon targets being met, for example, maintaining monthly gross revenue averages
• Verification of agreed-upon revenues and costs that are difficult to evaluate thoroughly before the sale. Examples of this could include refund rates and chargebacks

Holdbacks carry a risk for both the buyer and seller as either party may under or overestimate the value of post-sale obligations.

Step 4: Work Through the Exit Process

FE International will walk you through the exit process from start to finish. It does not matter if you have never divested of a business before or are a seasoned pro; we are here to help. Our process is built with one thing in mind: minimizing your time commitment while maximizing the final sales price of your business. Here’s how we help you:

Assessment and Valuation

The business valuation stage is crucial, as it allows us to know more about you, your business, and your goals for a sale. The process is confidential, and this is when NDAs are signed.

During assessment and valuation, we ask questions about your business to determine:

• Your ideal valuation method (focusing on seller discretionary earnings (SDE), EBITDA, or Revenue)
• An accurate valuation for your business
• Find your ideal time to sell

Our valuations are not based on theory; they are based on data from the 1,200 transactions we have completed over the past decade.. We will let you know what your business is worth and how long we expect it will take to sell.

If you decide to work with us, we get a Representation Agreement signed which outlines our role, fee, and exclusivity period. In most cases, we do not charge any upfront listing fees and only get paid when the deal is completed. Our fee covers:

• Valuation and pre-listing due diligence managed through a secure and audit-ready deal room
• Preparing sales materials
• A dedicated M&A advisor to communicate with and a whole M&A deal team dedicated to your sale
• All advertising costs related to the sale/finding buyers
• All negotiations directly with the buyer(s) and their representatives
• In-house legal, including drafting the Letter of Intent (the formal offer from a vetted buyer), purchase agreements and other documents required to complete an acquisition
• Escrow (Escrow.com or attorney escrow) facilitation
• Handover documentation formation
• Management of post-sale contractual obligations

Acquisition Preparation

Our acquisition preparation is what sets FE International apart from other advisories. This detailed preparation ensures your business is well positioned for a successful sale. The upfront due diligence completed by our in-house Audit team reduces the time spent by the buyer conducting their due diligence by 28% compared to the industry average. These preparations also help prevent renegotiations, where if a buyer were to verify different financials, it would raise concerns about other financial claims. Instead, we can verify these financials and address any discrepancies privately before going out to market, allowing us to accurately present financials to buyers and continue to lead negotiations on the front foot.

We prepare a detailed  Prospectus for buyers  that covers everything they need to know to make an informed offer on your business. This is usually  25-35 pages  depending on the size and complexity of the business.

When preparing for the sale, we may ask for the following to be uploaded into the deal room:

• A detailed monthly profit and loss/income statement for at least the last 12 months
• Detailed answers to a custom questionnaire about your business
• Google Analytics access
• Access to any third-party metrics platforms you may use
• Supporting documentation for business and financial claims

Our upfront preparation is incredibly detailed and ensures your business is best positioned for a successful sale.

Marketing Your Business for Sale

At this stage our M&A team works to identify and speak to suitable buyers for your business. We have tens of thousands of vetted buyers looking for businesses to buy every day. On top of the buyers already in our database, we invest heavily into marketing your business (whilst retaining privacy) elsewhere, helping us to achieve and maintain our 94.1% success rate for taking a business to market to getting it sold.

Your team of dedicated advisors will deal directly with buyers on your behalf, answering questions, making calls and starting offer negotiations. At this stage, there may also be more questions for you to answer facilitated by our advisors to make the process as hands-off as possible for you.

Acquisition Negotiations

Once we have discussed the business with all potential buyers, we will begin to narrow down to the most serious prospects and get offers  from multiple parties. At this stage, you may be required to join conference calls with the buyer and your FE International lead advisor to discuss the sale.

With decades of M&A experience and transaction negotiations, our team will set out to negotiate the best offer for your business, advising on appropriate offer structures and terms. Buyers often like to speak to the business owners directly to feel comfortable with the acquisition, and here you have the opportunity to allow us to front negotiation discussions while separating yourself from these tricky waters, allowing you to continue to build rapport with the new owners.

Once an offer (or multiple offers) is negotiated and the best buyer(s) selected, a  formal Letter of Intent (LOI) will be prepared by our in-house legal team. This outlines the terms of the offer and sets the timeline for due diligence and closing.

Due Diligence

Due diligence is essential to every business sale and ensures the buyer is comfortable with the business and claims made during the marketing and negotiations. It can sound like an arduous process, but its purpose is actually very simple, especially since you have an experienced M&A advisor on your side, who has already helped to prepare the business for sale through the help of our in-house Audit team, expediting a lot of the due diligence requests.

This process will vary depending on the buyer’s requirements (outlined in the LOI) and the complexity of the business but usually covers these six areas:

• Traffic
• Financial
• Ownership
• Operational
• Technical
• Legal

FE International will oversee the due diligence process through our  secure deal room – we are always on hand to advise what is reasonable to expect in the process. Having verified much of the due diligence items ahead of listing, we have a  94.1% sale success rate.

Simultaneously, we will also start drafting the  Asset Purchase Agreement (APA). To learn more about what buyers may look for, check out our article on e-commerce due diligence.

Closing

At this stage in the process, the buyer has been identified, the offer structure has been agreed upon, and due diligence has been completed. In most cases, FE International’s in-house legal team will draft the APA on your behalf, which forms the deal’s legal basis, but we also advise having your own attorney/lawyer review the agreement.

Once the contract and terms are agreed upon with the buyer and seller and  the contract is signed by both parties (facilitated by FE International), the deal moves into Escrow ahead of the transfer. We use either Escrow.com (more about  safe buying and selling with Escrow) or attorney escrow, depending on the size of the acquisition. Both options keep all parties safe and secure.

Throughout the transfer process, we will manage the process to  ensure a seamless handover of assets. Once everything has been transferred (per the APA), funds will be released to you (this is when we get paid), and the  acquisition is complete.

Transferring Amazon Seller Accounts or Listings

FE International has extensive experience advising Amazon FBA business owners on valuations and throughout the exit process. A key component of divesting of an Amazon FBA business is transferring the products to the new owner. There are two ways to transfer information from one Amazon seller account to another— via an  Amazon account transfer or an Amazon listing transfer. With an Amazon account transfer, the previous owner hands over their entire Amazon seller account to the new owner.

The second transfer method is an Amazon listing transfer, where the seller transfers specific Amazon Standard Identification Numbers (ASINs) to the buyer. The terms of the deal will determine whether the entire Amazon seller account or just specific listings should be transferred. We have also outlined the  Amazon seller account transfer process.

Bonus: Tips for Making Your Business More Attractive to Potential Buyers

There are steps you can take to make your business more salable and thus achieve a higher selling price for your company. A business can be valuable but also unattractive to operate—this is what we want to avoid. For example, a business might have unrivaled prices and great sales, but requires 80 hours per week to manage suppliers in China. Buyers are often not interested in acquiring a job.

Improving the attractiveness of your business is about making it look appealing to buyers from the outside and the inside. There are a few tips you can roll out quite quickly that will dramatically improve this.

Documentation

It will help if you have detailed financials prepared for the sale of your business. If you’ve been using an accounting application like QuickBooks, this will help but if not, make sure to bring your accounts up to date and keep them that way going into a sale process.

Serious buyers don’t want to go through months and months of financial records and tax returns trying to piece together the financial picture. If you decide to work with an M&A advisor, they will help with this.

It’s also helpful to have any analytics you have for the business at hand. This can be ad campaigns, email data (if captured) and traffic data for a brand site if you have one.

Operation Procedures

Taking over a business is essentially taking over a series of tasks and continuing responsibilities. Sellers that have documented their daily/weekly/monthly processes and procedures find handing over their business to a buyer is much easier. Transition time is reduced, and there is generally less work in the first few weeks post-sale.

Buyers are willing to pay a higher price for well-documented businesses, so it’s worth taking the time to put standard operating procedures in place and documenting these for handover.

Outsourcing

As discussed in the general valuation factors, the time the owner spends in the business is a crucial driver of valuation. To the extent you can reliably outsource tasks to virtual assistants or contractors, you’ll benefit from the premium attached to more passive businesses.

Sellers should not underestimate the power of passivity; it is a potentially significant value driver for your overall business sale. Business owners that have reliably removed themselves from operations can expect to receive a substantive uplift in valuation multiple when it comes to selling.

Powder in the Keg

Leaving some ‘powder in the keg’ for a new owner in the form of immediate future upside can be a deal sweetener that brings more buyers to the table and greatly increases your business worth.

For example, if you’ve just negotiated 2-3 new products and written the sales copy for the listing, consider holding off and gifting them to the buyer. The value uplift you receive for the whole business will likely be more than the additional sales you might have got from releasing the products in the short term.

Similarly, if you’ve evaluated a new market, found a new supplier and organized a marketing strategy, consider using this as an additional marketing tool to sell your business.

When you have a better sense of FBA valuation drivers and some ideas for an exit strategy, it’s time to consider the sale itself.

FE International and Amazon FBA

For over a decade, the FE International team has advised on the valuation and sale of hundreds of profitable e-commerce stores, including Amazon FBA businesses. FBA businesses we’ve recently sold include a business in the beauty and skincare niche with 100% positive seller feedback and a c.21% re-order rate. Another one is a business in the hair care and beauty niche focused on providing premium organic hair and beard care products and supplements with 99% positive seller feedback rating and c.18,000 5-star reviews. We’ve also sold a business in the kitchenware and fitness products niche with a 99% 5-star positive feedback rating across over 6.1K reviews and a business in the air filtration niche with a 99% positive seller feedback rating and a 17% re-order rate.

As evidenced by the quantity of Amazon FBA businesses we are selling, it’s clear that these businesses perform strongly and are in high demand.

Find Out What Your Amazon FBA Business is Worth

The best way to get a good sense of how much your business is worth is to speak to an M&A advisor. They will calculate your profit (SDE) accurately and advise on the multiple applicable based on their assessment of the business and previous transactions.

You can get in touch with FE International to receive a free valuation.

A good M&A advisor will give you the best advice on exit strategy and timing, irrespective of whether this is in their short-term interest. The best advice might not be to sell right now, but instead to do three things to lift the valuation and come back in 3-6 months with a more valuable business for sale. That’s a win for everybody.

If you run an Amazon FBA business and you’re considering a sale at some point, get in touch with us to see how we can help maximize the value of your business and find you the right buyer.

Are you interested in selling your FBA business? Fill out this short form and get a confidential valuation.