How to Sell Your Amazon FBA Business: Pro Tips From Amazon Experts

As the aggregator market narrows, selling your Amazon business is still a hot commodity, even in 2022. By learning some of the process requirements and what to expect, you may achieve the maximum valuation for your Amazon business. This blog article summarises our recent How to Sell Your Amazon Business webinar, featuring some key Amazon experts from Mayan and Flippa.

Stay tuned as we walk you through how to sell your Amazon business so that you can unlock the best tips and advice—and what to expect along the way. Let’s dive in!

Expert Panel: Andrew Laird, Veronica Jardon Salas, and Ray Preston. 

How early is too early to sell your Amazon FBA business?

You might be wondering: How early is too early to start thinking about selling your FBA empire? Having an exit plan helps ensure that you are set up for success and ultimately means it is never too early to think about selling.

“You should start thinking about selling your business even if you’re unsure if you want to.” - Andrew Laird. 

Let’s look at some logistics of selling your Amazon business, so you can maximize your valuation.

How long does it take to sell an Amazon business?

Unlike other e-commerce businesses that sell quickly, an Amazon FBA business can take six or even twelve months to close. A lot of assessment takes place once you decide to sell. But lucky for you, potential buyers are always ready to buy when the time is right.

Some high-net-worth individuals have millions of dollars in cash just sitting in the bank. And if you think that’s a lot, some may have 10 million dollars or more–just ready to spend at the most opportune time.

Why does it usually take a long time to sell your Amazon business?

Since we’re talking about a lot of money on the line, it's easy to understand that many i’s and t’s need to be crossed to finalize a sale. During the exit process, you’ll work to ensure you have the most accurate information available to potential buyers, and you’ll navigate the due diligence process to ensure no mistakes are made. 

Unfortunately, messy accounting and a lack of standard operating procedures are too common in selling an Amazon business. These two issues alone can make the sale process lengthy. On the other hand, lengthy exits can be attributed to business owners who inadvertently mix admin details like their business finances and personal finances, causing a tangled web of information that needs to be organized, sorted, and analyzed to move forward. 

Now you can start to paint a picture about why it’s essential to start thinking about selling your Amazon business from the time you start building your business. Start early by preparing SOPs and developing healthy accounting and business practices. This way, the process is smooth when you go to sell and doesn’t take an overextended period. 

When’s the best time to sell your Amazon business?

The best time to sell is when your company is profitable so that the sale can happen quickly. Being profitable is a cue to buyers that your business offers a viable opportunity for growth. 

Remember that just because you decide to sell does not mean you cease healthy business or accounting activities. Sellers tend to fall into this trap, prolonging the sale unknowingly. Continue to operate with due diligence, keep clean records, standard operating procedures, and good Amazon marketing practices from beginning to end.

You risk losing some of that vital valuation if you’re not invested in your business until the end of the sale process. And let’s face it– you didn’t get this far only to come this far. You want the most valuation possible, so ensure your business doesn’t go downhill simply because you decided to exit.

What’s the most crucial aspect of selling your Amazon business?

The most crucial aspect of selling your Amazon business is ensuring your books are in order. We can’t stress this enough. Accounting is everything– you need to have clean, transparent accounting practices. 

Let’s assume you don't have an accountant or a CPA; there will likely be gaps where you lose money. This is the reality of accounting in an e-commerce business and why sellers must scale their business with the best team behind them. Hire an accountant or CPA and perform due diligence in your financial matters early on. Do that, and you’ll save yourself a lot of time and money. You’ll also breathe a sigh of relief not having to deal with arduous accounting scenarios.

Sometimes Amazon sellers try to sell their businesses, but when potential buyers review their books, they walk away. Something isn’t adding up at this stage, and alarm bells are going off. Your numbers need to make sense and need to be transparent in order for buyers to stick around.

Pro Tips:

You want to do things that push your FBA business forward– not just keep track of numbers and call it a day. Here are some tips to help you prepare for a sale:

• Keep clean, consistent records of your verified financial statements
• Understand and stay on top of industry trends
• Execute standard operating procedures from day one
• Keep your Amazon business within Amazon’s terms of service
• Review the copyright of all your online media, as this can be a big sticking point during a sale
• Have your trademark and LLC in order
• Understand your competition along with key seller metrics and indicators 
• Have your seller agreements in order
• Organize your files in different folders: accounting, verified financial statements, business training, SOPs, etc.
• Safely store all of the above-listed information in some sort of data room (i.e., Google Drive or Dropbox.) 

Buyers will take your business roadmap and continue with what you started, so the fine details matter. When the time to sell your Amazon business arises and potential buyers are interested, you’ll have the data ready and organized.

Summary

Buyers are often more eager to work with you if you keep a clean house, so to speak. If they find you disorganized and lacking transparency, the selling process won’t go smoothly and may even end abruptly. That’s not a good experience for all the work and time you’ve put into your business, and it can impact a future sale if you don’t learn what’s required for the future.

If you want a smooth, timely sale, you must be organized, transparent, and actively participate in the exit. That means providing documentation to necessary parties as requested and keeping your business running smoothly until your exit is final.

Now you know some of the logistics of selling your Amazon business and the critical elements you need to gather to present your business as a lean, mean selling machine. Doing so will impress buyers and help you achieve the maximum valuation you’ve worked hard to achieve. 

Don’t forget to congratulate yourself once your sale is complete!

Think you’re ready to sell your FBA business? Check out the FULL recording of our webinar with Flippa to get all the details on how to successfully prepare you business for exit.