As things stand, Amazon is leading the eCommerce market and it looks like it will continue to do so in the future. Entrepreneurs with a penchant for bringing convenience to customers from all across the world have been making the most of this type of business model.
As with everything in life, there comes a time when a change is needed and a sale is on the cards. There might be a million reasons why you have decided to sell your FBA business, but the process can be slightly more complicated than it sounds.
In order to help you sell your FBA business fast, we have compiled a comprehensive guide that will help you with just that.
The preparation phase
The first question you would normally ask yourself is “Where can I sell my Amazon business?” There are a lot of platforms available, so you just need to find the right one for you.
The best brokerages out there will provide you with a lot of features, such as business valuation on top of helping you sell your FBA business. In addition to that, the leading brokerages will have databases filled with resources on how to successfully sell your business and make a profit.
After you decide on the platform, it’s time to prepare all the necessary data that will convince customers that your business is worth buying. This will include, growth, net margins, conversion rates, SDE, and so on.
So for instance, if you have an SDE of around $156,000, you can multiply it by 3.3 to discover what your business is approximately worth. In this case, it’s $514,800.
Of course, the buyers themselves will calculate how much your business is worth and offer you a counteroffer if they believe its worth is less than what you initially listed it for.
Understand what buyers want
Every investor is going to look for immense upside potential and perform due diligence to minimize the chances of an unwanted outcome. What you can do here is try to see how a potential buyer will view your business as soon as it’s listed.
Buyers will usually employ the four pillars of value technique which employes analyzing, growth, risk, transferability, and documentation. They will also like to inherit your current subscribers if you operate as a subscription model business and your current inventory.
Will marketing be necessary?
During your exit process, marketing won’t be really necessary if you opt for a platform or a broker that will sell the business for you. That being said, there is no point to spend valuable money on unnecessary costs as you will no longer benefit from a marketing campaign.
The brokerage will start circulating teasers and give potential buyers statistics and analytics to convince them that your business is a worthwhile investment. After that, they will create a shortlist of all the potential buyers and proceed with the negotiation.
As soon as the offers start coming your way, your brokerage will notify you. In addition to this, they will advise you whether the deal is just right. After that, if you agree to sell, they will enter the exit phase.
The Exit Phase
After you deem an offer worthy of acceptance, it’s important to ask for a substantial upfront payment. After you receive the desired funds, both parties will have to execute all exit documentation and finally move on with their future endeavors.
So, if you are wondering how much you can make by selling your business, for let’s say one million dollars, you will be likely looking at 900.000 taxable dollars due to closing fees and other costs.
After that, the tax you will be required to pay will vary from state to state, and you can expect anything from 2.9% all the way up to 25%.
Selling your FBA business can be a little complicated. Even the most experienced entrepreneurs opt to enlist expert brokers to help them with their whole sale process. If you follow the tips we outlined above, you will surely sell your FBA business successfully and earn a load of profits.
That being said, don’t forget to find the right platform and calculate whether your business is worth selling or retaining.