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Seller Strategies to Earn the Maximum Payout for Your Amazon FBA Business

Selling Your Amazon Business

Posted on February 2, 2022
by Benedict Dohmen

Selling your Amazon FBA business is a great opportunity to harvest the fruits from your long-term dedicated work, start a new adventure, or invest in something else, but only if you are well prepared. For starters, you need to consider “why to sell a profitable Amazon FBA” as this will help you determine “by when” you need to make your exit. Understanding “how much” your brand is worth and “what” formalities you need to complete are also key to mapping your exit plan better.

If you are considering an Amazon FBA exit, then our comprehensive guide on how to prepare your Amazon FBA for sale will help you cash in on your way out.

How to prepare to sell your Amazon FBA business

Most sellers assume that selling their Amazon FBA brand is an easy enough process. On the contrary, it is a time-consuming exercise—one that necessitates meeting criteria that will help the Amazon aggregator to establish whether the business is profitable, scalable, and healthy.

Shorten the process and ensure maximum value for your Amazon FBA brand by considering the following:

1. Be prepared to sell from the get-go

One of the most important factors to consider while starting an Amazon FBA business is its saleability. Even when your company is in the start-up phase where not much is in place, setting exit goals is necessary. Due diligence is a lengthy process. Many Amazon FBA owners skip it or don’t invest enough in it, thus inviting undesirable consequences like lower valuation or a delay in closing the sale. Preparing to make it saleable from the start will make it easy when you do decide to sell.

2. Keep your accounts up to date

Ensuring that all your financial documents are up to date makes your business credible and worth buying to an Amazon aggregator or Amazon FBA buyer.

An Amazon FBA acquirer will want to see your invoices, tax returns, business expenses, profit and loss statements, records of loans and debts, and employee salaries. Using Amazon FBA Automation could be an efficient way to keep these records and avoid raising any red flags when a buyer evaluates your company.

If you have a business partner, it is recommended that you buy out their share before you sell your brand to make things less complicated.

3. Document your SOPs

Document your business’s standard operating procedures (SOPs). It will help your brand function like a well-oiled machine and ensure a smoother transition to the new owner. Knowledge transfer via SOPs also fosters trust with the Amazon buyer, allowing them to understand key operational aspects of your business. This, in turn, will aid in the continued growth and scaling of your brand.

4. Anticipate what a buyer would want

If you want to know how to prepare your Amazon FBA for sale, you need to think like a buyer.

Here is a list of factors that a buyer will look into when evaluating a business:

A company with a secure supply chain or dependable suppliers and vendors is a huge bonus
Brands with several SKUs in the same niche are sought after
Buyers will assess your business’s supply and demand and profit margins—they will also see how your FBA business ranks on Amazon to gauge its success
If a company runs smoothly with all its processes in place, it will not be hindered by new management—sustainable, profitable momentum will attract a buyer’s attention

So, do ensure that your business is in a good place before you start looking for buyers. If it is not doing too well, take the appropriate steps to increase its brand value.

5. Figure out your seller’s discretionary earnings

Your Seller’s Discretionary Earnings (SDE) will provide your buyer with a clear picture of the cash flow in your business. It takes into account your net profit and add-backs such as interest, taxes paid, etc., that will not transfer to the buyer. Calculating your SDE will also help you estimate the final price your business will fetch. This is important as under-evaluating your business will mean you incur significant losses, while over-evaluating is a mistake that devalues your brand.

6. Sell it at the right time

If you want to know how to position your business for a better exit, you need to know when to sell it. It is recommended to sell when your business is doing well. Optimize your product descriptions, offer bonuses and discounts during peak sales periods, invest in marketing campaigns, and consider releasing new products to show a steady increase in revenue.

7. Remove products that aren't doing well

Conduct an audit and remove products from your catalog that are not selling well. Not only will this increase your profit margin, but you’ll also remove costs associated with the long-term storage of products that aren’t moving. This, when paired with greater focus on your best-selling products and boosting sales via better marketing and branding, will present buyers with more attractive financials.

8. Resolve pending issues

Before you attempt to sell your Amazon FBA business, make sure all issues within your company are resolved. These include legal complications, quality complaints, disputes with suppliers, poor customer reviews or feedback, and problems with employees.

Nothing will repel a buyer quicker than a business with a backlog of unresolved problems. You will also need to follow the FBA due diligence process criteria before considering putting your Amazon FBA brand up for sale.

9. Consider getting a broker

A broker could help you find the right buyer for your Amazon FBA business. They will provide you with many options and guide you through the Amazon account transfer process.

Once you sell your Amazon FBA brand, certain steps will help you transfer your business smoothly. You will be taxed on the sale of your business, but with professional guidance, you will be able to cross that bridge smoothly when you get to it.

Key takeaway

We hope our how to prepare your Amazon FBA for sale guide helped you prepare to sell your Amazon FBA business.

Should you need help positioning your business so that your exit is hassle-free and profitable, contact Benitago; we’ll be thrilled to answer all your queries and provide you with a FREE business valuation!

Now it is your turn – do you have a question for the Benitago team? Or maybe you want to start a conversation with like-minded individuals? Feel free to share your thoughts in the comment section below!