Today is quite likely the best time to both buy and sell an online or Amazon FBA business.
This is due to a number of factors all combining to create momentum.
- The value of an Amazon business is very well understood by most at this time. You no longer have to explain to people that a business selling products on the Amazon Marketplace can be hugely profitable.
- There are many marketplaces that specialize in connecting sellers of businesses with buyers. These marketplaces help market your Amazon business for sale for you.
- There are online safe havens to manage large deals between strangers such as Escrow.com. Using services like these provides comfort for both buyer and seller.
- Online business and eCommerce are well established but still growing rapidly. So banks and even entities such as the Small Business Administration are happy to provide loans for people buying viable Amazon businesses.
- With Covid we have thrust faster and deeper into the digital economy. While many local and brick and mortar businesses are struggling — eCommerce is breaking sales records.
Why Sell Your Amazon Business?
There are many obvious reasons to sell such as struggles with your business, new competition, you no longer enjoy your business, troubles with stress, you need cash, and a million other reasons.
Having personally failed badly in not selling my own business (that would have been worth nearly $1 million), I can give you a few other considerations.
The world can change on a dime.
I had a leading social media software as a service business that was a category leader.
It was a very profitable business and my clients were an interesting mixture of startups, marketing companies, leaders, and famous artists and entertainers. When Monday came around I was actually EXCITED to get back to work on my business unlike how many feel going to work for their jobs.
That was ultimately why I never pursued selling as I simply loved the business and was able to work with fascinating customers and brands.
But when things started swirling out of my control it all collapsed very rapidly.
My business was built on top of the Twitter API and Twitter changed all of their API rules (some officially and others totally off the record).
Suddenly I had to play constant cat and mouse games just to keep our Twitter API account from being disabled.
Our API limits where suddenly restricted without warning, clarity, or any transparency. We were dealing with completely undocumented limits and nonsensical API errors for doing normal transactions.
I managed to still keep the wheels turning but then my largest customer (a marketing company that had most of their clients on our platform) was featured in a New York Times expose on sketchy social media marketing tactics.
They had been accused of gaming reality by buying fake YouTube views for their clients. I bet their YouTube marketing vendor told them everything was legit and real, but they got caught in the crossfire.
They overnight cancelled all marketing products and services they were using. So even though we were not doing any sketchy fake stuff it cost us this business.
The next week my second biggest client (another marketing agency) closed down.
So within a very short period cashflow dropped in half while our ability to keep things running smoothly was challenged by the hour.
The overall impact of the constant API corruption meant the value of the service was not what it used to be. My customers were all very gracious and loyal but charging the same for less was not going to sit right with me.
But lowering the price to make things fair meant no ability to cover all of the costs of the business. Our Amazon AWS bill alone was several thousands per month .
So I completely shut down the business and saw one of my largest assets burn to the ground before my eyes. Something I spent several years in building.
You Have No Control Over Amazon
The same scenario that finished me could happen to your Amazon business.
Obviously Amazon could remove your account, suspend you, remove your access to certain categories or brands, or limit you in some other painful way.
A crazed competitor could get your Amazon account in jeopardy, you could run into supplier relationship issues, or Amazon could make wholesale changes to their Marketplace.
When your business is running on another company’s platform, you are dependent and thus are vulnerable.
If you do not already have a good solid savings it may make sense to cash out now and use those funds for security or to transfer to less risky investments.
Preparing to Sell Your Amazon Business
I think one of the better ways to prepare is simply to pretend you are a buyer of an Amazon business.
Visit the business marketplaces and look at current Amazon businesses for sale.
What makes an attractive listing?
- What are the businesses that have sold doing well?
- What multiples are they charging?
- What metrics are they displaying to buyers?
Document Your Business and Systems
This may seem like an odd thing to do now. But you are going to have to do it when you sell anyhow.
The advantage of doing this now is to discover a glaring weakness or issue that needs strengthening — you can tend to this now before listing your Amazon business for sale.
Just like smart people do not sell houses that are filthy and stink — tighten up loose ends of your FBA business now.
Another benefit is that during this process you will consider new benefits of your Amazon business for your business sale marketing copy.
How Much is Your Amazon Business Worth?
Obviously the market bears what the market will bear. The market on Amazon businesses for sale could go up or could go down.
There are many factors to valuing your Amazon business.
Some of the factors are:
- Age = How old is your business? The older and more established the better.
- Branding = Having your own brand and manufactured products adds value to an Amazon business.
- Organic vs. Paid = Are you driving business organically by having great Amazon SEO or are you spending a ton of money on Amazon PPC ads?
- Niche = Not all niches are equal. Some are more popular than others and thus sell at a premium.
- Product Mix = Do you have just one killer product or are you spread out with many successful products?
- Suppliers = Do you have solid relationships with top notch suppliers?
Some of the more high-end marketplaces will help value your business with known current valuation metrics.
How to Sell Your Amazon Business
I would suggest using one (or more) of the businesses for sale marketplaces that offer Amazon businesses. There are many.
Here are a few of the bigger players in this space.
Digital Exits
What I like about this firm is they have a very Amazon and eCommerce focus — which may make the valuation and consulting portion of the relationship tighter.
Empire Flippers
Empire Flippers sells more than just Amazon or eCommerce, but they have a great reputation and are a solid choice if your business is more on the higher end of the spectrum. They have categories for Amazon FBA, Amazon Merchant, Amazon KDP, and Amazon Merch businesses.
FE International
This is another long term player in the broker market. They do seem to focus more on websites and SaaS businesses though. But they still may be a good fit for your Amazon business.
Flippa
Flippa is possibly the largest of all of these but that can be both good and bad. Name recognition ensures they generate plenty of traffic — but that also means that Flippa is a crowded marketplace.
So from a seller’s point of view they have a lot of sketchy or outright junky listings.
Quiet Light Brokerage
This is another well regarded company that would be a solid choice for a higher-end or medium sized Amazon business.
What I like from a buyer’s perspective is that listings on Quiet Light feature interviews with the founders. These are a valuable way to learn about the business from the founder’s own mouth.
They also supply great business summary documentation.
Other Business For Sale Brokers to Consider
This is an ever-expanding field and I wanted to include some other brokerages that may be useful to you.
Post-Sale Considerations
While you may wish to trek to an island and drink Pina Coladas, you likely still have plenty of work to do.
Your buyer paid a fair price and is now depending on you for a successful transition.
You will be expected to help ensure as smooth a transition as possible. Your contract also should have very clear language to indicate if you will be available for unplanned phone calls, emergency situations, or text messages at 3AM.
Once you know the new owner is happy and running smoothly, then by all means take that trip to somewhere amazing!
While there reflect on the hard work you put in, the courage you had when friends or family said your idea was nuts, and soak in the lessons you learned on the journey.
I imagine many of these lessons can help you on your next venture. They can also be helpful to others — maybe consider a mentorship role, create a course on building a successful Amazon business, or write a book.
* Please note we may include affiliate links in some posts. But only for products we use personally and have deep faith in.