How to Set Yourself up to Successfully Sell Your Amazon FBA Store Business
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Whether you’re already running a seven-figure Amazon FBA store or are just a few years into growing your business -- it’s always a good idea to keep your exit strategy in mind.
The great thing about starting a business is that you have more value than just the paycheck you receive each week. You have an asset that you can cash in once you’ve decided to move on to bigger and better things or the relaxing life of retirement.
To set yourself up for a successful acquisition someday, there are steps you should be taking throughout the entire lifespan of your business to keep yourself prepared. Even if you have no intention of selling your business soon, these things will help set you up for success when that time comes.
Here’s a quick look at what we’ll cover in this article:
- Six things you should be doing right now that will help make your Amazon FBA business more appealing to potential buyers
- How to sell your Amazon FBA business once you’ve decided it’s time to move on
Things to Do Now to That Will Make Your Amazon FBA Business More Appealing to Sellers in the Future
Even if you’re just starting with your Amazon FBA business, it’s good to consider what your plans are. To help set yourself up for success, there are several things you can be doing right from the start to set your company up for a successful acquisition in the future.
By crossing your Ts and dotting your Is along the way, you’ll be ready to sell your business when the opportunity rings -- and you won’t have to waste time trying to get your house in order.
Implementing these steps into your business strategy will help keep your business prepared and simplify the selling process.
Always Continue to Sell Products
One of the most important things you can do to keep your Amazon FBA business appealing to potential buyers is to sell products continuously.
This might sound like a no-brainer, but some businesses simply close up shop and never look back. They sell off or donate all of their inventory and move on to some with something new.
Had these business owners continued to sell products and show even the slightest bit of growth, they may have been able to sell assets and walked away with an impressive chunk of change.
That’s why you want to ensure you’re actively selling products and filling the stock on your business store. Contrary to popular belief, even businesses that aren’t making seven figures can be sold for substantial money.
Start Increasing Marketing and Building Reviews
If you haven’t already begun to market your business, now’s the perfect time to get started.
Even if your business is already making good profit numbers without much marketing, the more prominent your brand is, the better for potential buyers.
You can do many things to start building up your marketing efforts, including digital advertising and growing an email marketing subscriber list. Using these channels will increase sales by bringing back more return customers and reaching new audiences who have never heard of your brand.
All of these marketing efforts will help grow your business and increase brand awareness -- something that will catch the eye of investors.
Another avenue to pique the interest of potential buyers is to have a good reputation. You can show this by the number of repeat and loyal customers you have and the rating and reviews your business receives.
Rave reviews will not only prove that your products are a high-quality, worthwhile investment, they’ll also continue to bring in new customers and allow you to grow your profits. The more profit you can show potential investors, the better deal you’ll get in the long run.
Find What Makes Your Business Unique
Another thing that potential buyers are looking for is something that sets your business apart from the rest. Because chances are good, there are probably hundreds of competitors selling the same products you’re selling.
What makes your brand stand out?
Even if it’s something as simple as unique packaging customized for your branding or a slight twist on how the products are made -- it can set your brand ahead of the competition.
You should also consider looking into ways to add protection and value to your products and branding. This could be in the form of a trademark, copyright, or another form of protection that lets buyers know you’ve worked to set your brand up for success.
Track Your Finances and Know Your Numbers
It should come as no surprise that potential buyers are going to want to see your books. That’s why it’s so important to start with an organized bookkeeping process and continue this throughout the life of your business.
Whether you’re financially savvy enough to do this on your own or choose to hire someone to manage this for you -- it’s something you can’t ignore.
It’s also something that you need to understand as the owner of the business, even if you have a designated bookkeeper. Going into a meeting with a potential buyer and not knowing exactly where your money is coming and going will quickly set them off and could cost you the entire sale.
The more organized your finances are, the easier it will be to sell potential customers and know exactly how much your business is worth.
Show Continuous Growth Patterns
While it’s important to know where your money is coming and going from, you also need to keep track of what your growth patterns look like. To successfully sell your business for a profit, you need to prove that your business continuously grows month over month and year over year.
That doesn’t mean you have to be growing at an exponential rate. Simply showing continued growth month after month will be enough to intrigue investors.
A successful growth pattern looks different for every business.
For example, larger businesses may lower those growth numbers due to the sheer volume of sales you’re bringing in each month. Growing from selling one million to five million dollars a year is a much more significant jump than a business growing from $10,000 to $50,000.
While any level of growth is generally acceptable for potential buyers, good growth is usually considered anything over a few percent per month.
Document Your Operational Processes
Having your operational processes well-documented could be the icing on top of the cake for a potential buyer. A well-documented process will allow for a new owner to come in and continue operations without delay.
That means they can pick right up where you left off and leave no time wasted -- something that will be very appealing over another business that has no transition plan.
There are many things you’ll want to consider adding to your operational documentation, but here are a few examples of the elements you’ll want to include :
- What your day to day process looks like from start to finish
- A detailed list of who your suppliers are, how often you place orders, and how to contact them
- Standard operating procedures for all areas of your business
- All of your financial and bookkeeping data in one comprehensive document for easy pass off
While you might not need to take care of these things right away when you first start, you should begin to compile this documentation as you begin to think about selling your business. The easier you transition for the new owner, the more appealing your business will be to them.
How to Sell Your Amazon FBA Business When You’re Ready
Once you’ve established your business, got all of your finances in order, and documented your operating procedures -- it’s time to start thinking about how you’re going to sell your Amazon FBA store.
There are various routes that you can decide to take when it comes to finding potential buyers. Each has its unique challenges and opportunities, but it all comes down to how much work you want to put into the sale and if you are willing to give up some of the profit for a more manageable process on your end.
In this section, we’ll look at the four main routes to sell your business: marketplace, auction, broker, and direct.
If your business has a good reputation and you can show continued growth, any of these channels can work to find the perfect buyer for your Amazon FBA store -- but to help you determine which is the best option for you, let’s quickly dig into each option.
If you choose to take the marketplace selling route, you’ll essentially create a listing for your business that outlines all of the necessary information for potential investors. You’ll then add that listing to an existing marketplace where interested investors can learn more about your business and determine whether they're interested in pursuing what you have to offer.
Choosing to sell your business on a marketplace will require you to oversee the entire selling process from start to finish. Meaning you’ll be in charge of everything from vetting offers to negotiating with potential buyers.
This route often takes longer to identify a buyer and can sometimes take about 6 to 9 months before someone may show interest in purchasing your business.
Similar to the marketplace selling option, with an auction, you’ll create a listing for your business that outlines the benefits to potential buyers. You’ll also be responsible for most of the process when it comes to selling your business on an auction website.
One of the benefits of choosing to sell your business through an auction is that you can set the amount of time that your business is listed for. Of course, setting the purchasing window too low could result in no offers, so you’ll want to be cautious on the timeframe that you leave your business up for auction.
If you have a successful business, using a broker to help sell your Amazon FBA store might be the right move for you. This is one of the fastest, most effective ways to sell your business and will require little work from your end.
The broker you hire will do most of the work for you from creating marketing materials about your business and promoting it within their networks to drafting sales agreements. Many brokers work with prospective investors on a regular basis and may already have a potential buyer ready for you when you walk in the door.
The one downfall to using a broker is that you do generally owe them some form of commission. 10-15% is a common number for commission among brokers.
Selling directly will require you to seek out potential investors. Choosing this route means that you need to research and find potential buyers who would benefit from purchasing your company.
You’ll likely spend a good deal of time making cold calls and selling your elevator pitch to those who show interest. An excellent place to start is with businesses similar to your own that can benefit from the products and branding you have to offer.
While this isn’t the easiest way to sell your business, you hold all the cards. That means there are no broker fees or costs to listing your business on a marketplace-to-action site.
Many people who choose to sell their business directly have already been approached by a potential buyer and choose this route to save costs and complete the sale quickly.
Is Your Amazon FBA Business Ready for Future Buyers?
When you choose to build an Amazon FBA business, you decided to invest in yourself. Once you’ve decided the time comes to move on to another project or simply retire, you have an asset that can be sold to the highest bidder.
That means you’ll walk away with more value than just what you saved from your paychecks over the years. By taking the time to properly manage your business and putting these steps into action early on, you’ll be setting yourself up for a successful and lucrative sale in the future.