How to sell your Amazon FBA Business

CoranWCoranW
edited July 2016 in General
Hey everyone,

As an FBA seller and FBA business broker, I get asked a ton of questions about how to sell FBA businesses. So I put together this short video to answer the most frequently asked questions I get from people wanting to sell their FBA business.

Why should you listen to me?

My name is Coran Woodmass - The FBA Broker. Over the past 12 months I’ve spoken to 100s of buyers and sellers as a broker and in the 1st quarter 2016 I helped sell 4 FBA businesses. For the past 3 years I’ve been buying and selling online businesses and I currently own an FBA business I’m building up to sell.

I’ve seen a ton of bad information online about selling FBA businesses and wanted to share with you what works.





What is my Amazon FBA business worth?

The first question What is my FBA business worth?

Unfortunately you will not know the true value of your FBA business until someone buys it. What I can help you work out is an estimate of what your FBA business could sell for...

There are many factors to take into consideration, as a rule of thumb take your annual net profit, this is known in investment circles as EBITDA (earnings before interest, tax, depreciation and amortization) and multiply this figure by 2.

e.g. say your EBITDA is $100k your business could be worth around $200k

Keep in mind, on top of the sale price, a buyer will purchase your inventory at cost (including the cost to get the inventory into the FBA warehouses)

How to increase FBA business value

What will make my FBA business worth more than 2x EBITDA?

1) Age

The longer your business has been operating the better. Why? An investor's primary concern is return on their investment, the longer your earnings history the higher the chance it will continue to do so in the future.

If your business is older than 2-3 years great, under 12 months not so great.

2) Defensibility

Do you have a brand, are your products unique or can your product be ripped off easily? The more defensible your business is the better.

3) Diversification

Do you have multiple products in multiple niches? Do you have alternative traffic sources outside of Amazon?

4) Competition

Are you selling garlic presses, with tons of sophisticated FBA sellers? This may scare off buyers. Competition is fine however a ton of super aggressive FBA sellers can make your business more volatile and less attractive to buyers.

Can I sell my FBA business?

Next question, Can I sell my FBA business?

In short, yes! You can sell your FBA business and there are cashed up buyers looking for deals, right now. The question is are you ready to sell and what price will make it worthwhile for you.

I’ve created a quick quiz to help you figure out if you can sell your business. Take the free quiz here and I’ll let you know if your FBA business can be sold.

>click here to take the free quiz

How to transfer Amazon business

How do I transfer my FBA business and get paid?

I would highly recommend using a broker to assist you to not only find a buyer but also help with the negotiation, transfer and make sure you get paid.

The most effective, pain-free way to transfer your FBA business, is when you sell your entire FBA business and simply transfer the seller central account (inc inventory) to the new buyer. I would strongly advise against trying to only sell individual products (e.g. ASIN)

What next?


Find out if you can sell your Amazon FBA business, take my free quiz and I’ll let you know if your business could sell. Don’t worry no need to reveal your niche or product names etc.

>Click here to take the quiz

Cheers,
Coran

Comments

  • Just dropping in here to vouch for Coran. He's a solid guy and knows a ton about the ins and outs of selling an FBA business.

    In fact... he is the one who helped and coached me through selling my own FBA biz! The idea of selling was a daunting task so I had never really considered it. He made the process fairly simple by simply showing exactly what info I needed, and how the entire process would work.

    I'm not getting any kick backs from this recommendation, just happy with the service. He connects buyers and sellers, and possibly even more importantly makes it easy and shows you how to maximize your acquisition price. Highly recommended.
    Hey Everyone, full of both happiness and sadness I have moved on from AMZ Tracker. If you need anything hit up Support@AMZtracker.com for help.
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  • CarlCarl
    edited June 2016
    Great Post Travis! Thanks so much for the information. Awhile back I was considering selling our Amazon business so I gave up and never considered it as well.
  • Hi Coran, I'm new to this and was wondering why would you advise against selling an ASIN on it's own?
  • Branko said:

    Hi Coran, I'm new to this and was wondering why would you advise against selling an ASIN on it's own?

    Hi Branko, sorry for the delay in responding. The main reason is it can limit your buyer pool. I advise my clients to be open to including their Seller Central account with the sale. In my opinion and experience this is the fastest and most pain-free way to handover an FBA business to the new owner.

    In some cases the buyer will want to use their existing seller central account and in this case we would transfer control of the listings on Amazon. However this requires moving inventory out and back into Amazon plus extra costs in removal fees as well as shipping and handling costs. But it can be done.
  • Awesome. Thanks for clearing that up for me. :smiley:
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