Editor’s note: This is a guest post by Thomas Smale, Founder of FE International.
The market for Fulfilment by Amazon (FBA) businesses is growing steadily and it’s important to make your business stand out from the crowd. In this guide, we will run through several key considerations, as well as how to get your FBA business to market.
Other factors include:
Supplier Contracts
It is beneficial to try and tie in suppliers with contracts so the business is as stable as possible. There should also be Standard Operating Procedures drawn up for each supplier so any new owner understands how to coordinate with each supplier.
Brand Protection
Ensure that all relevant products are registered on Amazon’s Brand Registry. This can prevent other sellers from selling products on your listing.
Cash Flow
Having good terms of credit with your suppliers can be attractive to buyers as it will allow a new owner to fill out their inventory when financial reserves are lacking.
Frustration Free Packaging
This is only going to get more popular over time. It requires some effort to get into the program but it can be a nice selling point.
Reviews
Having products with good reviews will only help your prospects of selling your business. Social proof is an important aspect of the buyer conversion process, so it can be worth offering an incentive for first-time purchasers to leave reviews.
Account Health
Check your FBA seller account health status. You should aim to be at around these levels:
Your business could be valuable, but not yet primed to sell. These are the main things to consider when preparing your business for market:
Documentation
Have a clear financial history prepared, as well as relevant analytics data. Buyers shouldn’t have to piece together what has happened over the months and years your business has operated. Analytics data will often just need to be made available with appropriate logins etc.
Operating Procedures
It is worth documenting your daily, weekly, and monthly tasks so that a buyer can take over as easily as possible. This will reduce the amount of work you might have to do during the post-sale transition period.
Outsourcing
Most new business owners won’t be looking for a full-time job after the sale. The number of tasks that can be outsourced at a reasonable price, reducing the number of hours that a new owner will need to work, can make the business more enticing.
Immediate Future Upside
Having some new products lined up and well prepared, but not out for sale, can make the business seem primed for profits. The extra value buyers might put on a business that looks set up for immediate profits will outweigh the loss of some short-term sales.
You have four main options:
Marketplace. You can sell your site on a marketplace like BizBuySell. This takes the form of a low-cost listing which can often generate a quick sale. You will need to do your own admin and screening of buyers.
Auction. Listing on an auction site is similar to the Marketplace option, but your listing will only be active for a set amount of time. This creates more competition between buyers, which can put you at an advantage. Most businesses tend to be sold for $5000 or less.
Broker. This is the highest-reward option for businesses worth $20,000 or more. A good brokerage or advisory firm can help to value your business and get it in front of the right kinds of buyers. They will also do most of the admin.
Direct. You could always approach potential buyers and organize the sale yourself. You will need to be confident in your ability to navigate the whole sales process.
Hopefully, this article has given you an overview of some of the preparation needed before you make a sale, and some of the ways you might be able to find a suitable buyer. If you are interested in finding out what your Amazon FBA Business might be worth, please try out FE International’s free valuation.
Try Out FE International’s free valuation!