Amazon represents one of the world’s most dominant eCommerce platforms for consumers, and it’s only expected to grow in the future. More and more companies decide to use Amazon to make the sale of their products more efficient and increase their turnover. Entrepreneurs across the world have made the most of this business model as it allows them to sell globally and bring a high level of convenience to their customers.
Selling your Amazon business might not be top of mind when you first launch your products but as you continue to grow it and make a healthy profit over the years, cashing out is something to consider.
There are many reasons why you might want to sell, whether it’s to invest in another business, retire, buy a property, or just enjoy the fruits of your labor and relax from the stress of running a large business.
Regardless of the reason, the process can be complicated as it requires a certain degree of knowledge and preparation.
If you’re someone wondering how to sell an Amazon business, below, we offer a step-by-step guide on how to do this fast and for the best value possible.
Make Sure Your Business is Profitable
Before making the decision to sell your Amazon business, you must do everything in your power to grow it and make it profitable. If your business isn’t profitable, you’ll struggle to sell it for a good price.
For any online business to thrive, traffic is a significant variable that cannot be disregarded. To make any sales in your Amazon business, you must first know how to drive enough traffic to your site and generate high-quality sales leads that can later turn into paying buyers.
One of the biggest advantages you have as an Amazon entrepreneur today is that there are many tools and resources to help you achieve this.
Gather Your Information
The process of selling any type of business, even an Amazon business, depends far more on the numbers and whether they’re presented accurately.
If your Amazon business is so successful that it’s ready to be sold for profits, then you probably know the business inside and out. Take as much time as you need with gathering and organizing your records as it is essential for the selling process.
Financials and Taxes
Even if you started out small and didn’t keep financial detailed records of your Amazon businesses, it’s still important to work to get all the information you can about your businesses and keep it up to date. If not, you might not get the best deal and even run into an issue during due diligence.
Start with a clear profit and loss statement, prepare everything related to your expenses and salary, and include everything from travel expenses, charitable contributions, etc.
Tax information is important when selling your Amazon business even though it doesn’t always mix so easily with the online world, especially with eCommerce. The rules and regulations are confusing but no potential buyer wants to buy a business that has tax issues.
Make sure all your taxes are in order ahead of time as this will put you in a better position when talking to potential buyers.
Determine the Value of Your Business
The next step in the selling process is to determine the value of your Amazon business. It doesn’t have to be an exact number but rather a range you can negotiate from. So try and get a ballpark number to get a better idea as to whether you want to proceed with selling.
The main factor, to begin with, is the Seller’s Discretionary Earnings (SDE) for the past 12 months but you should also have it ready for individual months and longer periods too.
The value of your business can be affected by many other factors such as growth opportunities on Amazon, the level of competition, brand ownership, the condition of the economy, and much more.
Prepare Marketing Materials and Communicate
When selling your Amazon business, you will need to create marketing materials. If your broker is doing most of the heavy lifting for you, you should still cooperate with them and provide them with all the information possible related to how the business got started, its strengths and weaknesses, and any other similar questions potential buyers might have.
Potential buyers are usually required to sign a non-disclosure agreement (NDA) before looking at your business in detail which will protect you from compromising your business.
Once you list your business, continue running the business as usual, let the broker do their job, and communicate with prospective buyers if they have any questions. If you receive the same questions, update the materials with your broker. You might even have to hold conference calls with potential buyers before moving forward with the letter of intent.
All of this may be a lot to take in but these steps are crucial when selling your Amazon business as they can maximize the value of your sale. Take the process slowly, craft a solid strategy, think about what you want from the buyer and sale, and you’ll be able to sell your Amazon business successfully and earn an excellent profit.