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.
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)
What will make my FBA business worth more than 2x EBITDA?
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.
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.
Do you have multiple products in multiple niches? Do you have alternative traffic sources outside of Amazon?
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.
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 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)
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