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.
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:
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.
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:
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.
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.
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.
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.
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!