Why Sell Your Amazon Business: What You Should Consider
Updated: Jul 6, 2021
Amazon is one of the largest online marketplaces that houses several sellers from all over the globe. Amazon’s humble beginnings have certainly flourished over time, changing the world economy and creating opportunities where larger brands can connect with entrepreneurs and thrive together in one marketplace. Every Amazon seller wants one thing: to succeed in their journey.
As with any business venture, including selling through Amazon FBA, risks need to be assessed and potential value for growth measured. Whenever capital is invested with the hopes of growing an organization, both online and offline, it pays to play it smart and evaluate the situation.
If you’re an entrepreneur selling on Amazon, at times it may seem that the road to success is quite steep, but in reality, all you need is a good partner with solid expertise to help guide you through. More and more, many Amazon FBA sellers discover that putting their business in expert hands is a win-win option and that selling to experienced aggregators ends up one of the smartest financial decisions they can make.
If you’re wavering or on the fence about selling your Amazon business, there are a few things to consider beforehand. These should tell you exactly why you may want to sell your Amazon business and when, so that you come out on top, rather than simply closing shop or continuing the daily grind.
You Put in the Hard Work, You Should Be Compensated
When you first decide to launch a product on Amazon, you have great expectations and high hopes for your seller business.
You prepare for all possibilities and toil away to make sure you get your startup business on the Amazon platform. Between all the planning, product marketing, tracking inventory, customer relations, and promoting your brand, you have developed strategies made to adapt to unexpected changes and deal with hiccups, but also designed to propel your business ahead and grow. All the endeavors it takes to bring a brand into the Amazon marketplace are no small feat. They require time, money, and all the effort you can muster to guarantee that you’re giving 100% to push your business forward and become one of the sellers who finds online success.
For those who have dedicated countless hours to turn their FBA business into a thriving e-commerce store, you may find that the best reward is to walk away–that is, to walk away with at least a few years’ worths of profit instantly. You could stay in the game and keep grinding away, constantly trying to keep your product at the top of the search results, fighting for the most competitive price, and warding off negative reviews. Or you could realize the potential of the business you’ve built from the ground up, take with you the knowledge you’ve gained from dealing with the ups and downs and sell your business to a knowledgeable Amazon aggregator who will, in turn, compensate you handsomely.
Do You Have a Winning Product?
Selling on Amazon offers you the chance to create a name for yourself and your business while launching a product that will meet customer needs, and hopefully, create a following. When you start exploring the value of your business and reaching out to prospective buyers, having a successful product with great reviews is critical to proving that your company is valuable and worth taking on.
If you don’t quite have that ideal, best-selling product just yet and you’re still working towards one that outshines and outsells others, the time to build your presence on Amazon is now.
The best way to guarantee that you’ll achieve a higher sale price for your FBA business in the future is to establish a strong product and following now. There are different online tools and software available that can help Amazon third-party sellers with everything from inventory management and automatic repricers to profit and costs analysis, so you always maintain a competitive edge over the rest. If you invest in a comprehensive seller tool, buyers will want to invest in you.
If you already have a product that sells, or you know you can eventually turn your business into one that churns out in-demand items, then you’ve got a hot commodity on hand in your company itself. Your Amazon business may turn out to be the most valuable product you ever sell. Prospective buyers will see this and recognize the worth of your business, which could make selling it even more profitable, and you can ask a higher premium when the time comes.
Think You’re Ready to Throw in the Towel? As an Amazon Seller, You Have Other Options
Some Amazon sellers who think of closing down their online shop do so because they no longer have the time or resources to devote to the business. Even though a new strategy could revitalize their approach and attract new customers, some sellers simply don’t have the energy needed for such an adjustment of operations. Other sellers may be hesitant to leave their business, especially after devoting so much to get it off the ground.
But there is another option: experienced e-commerce investors, which is where Amazon aggregators come into play. You can sell your business to experts who have developed leading strategies to take on and develop Amazon FBA businesses, and who have teams in place to make sure that your business achieves the success that you always dreamed of.
Sellers may not consider this an option at first, but if you find the right investors who understand your mission and will honor your vision, then passing your business on to professionals is the best way to watch it grow, while also seeing monetary rewards for your work put in so far. All your efforts and sacrifices should not go to waste, and if you consider the viable option of a third-party buyer, then they won’t. On top of that, your product can still claim its place in the Amazon global market, all while you sit back and enjoy your newfound downtime and financial gains.
What Type of FBA Business Do You Run on Amazon? How Does This Affect Your Value?
There are three specific seller types of FBA Business accounts in Amazon: reseller (also known as retail arbitrage), private label, and proprietary product (or own brand).
Resellers essentially buy products, either online or in-person, and resell them on Amazon. This type of FBA business depends on other brands’ merchandise or wholesale products to stock their store, which means there can be multiple resellers for one product listing, with sellers competing to win the coveted Buy Box.
Because of the wide array of products that resellers can list, the fluctuation in operational expenses, sales, and revenue are huge. There’s also the possibility for unlimited competition, which can make success elusive. FBA resellers who have built especially impressive businesses can catch the eye of aggregators and investors.
As for private label sellers, the seller purchases existing products from a manufacturer and attaches their own branding. However, this does not mean that the product offered under the label is original; rather, a prevalent or mundane product is converted into a unique, branded item. A thriving private label FBA business will definitely pique buyers’ interests.
As far as attractive businesses go, a successful proprietary products model can’t be beaten. This FBA business type is especially valuable because it’s an exclusive brand and product, not just a name put on an existing product, and is considered the gold standard of FBA businesses. There is decreased competition among other sellers in the Amazon Marketplace for a unique branded product.
Proprietary product businesses have much more potential for sustained growth when they are run correctly and can develop a loyal customer base. All of this makes an established, proprietary product business very alluring from the perspective of an aggregator because it almost guarantees resilience in the market, a solid strategy, and the proven ability to please consumers.
If you’re a reseller on Amazon and now think you need to reconsider your business model or start a brand from scratch, don’t get discouraged. There are other elements to factor in, and any FBA business can be sellable with the right product and planning.
How Old Is Your FBA Business?
Proof of your business’s prosperity–or at least the projection of strong earnings–is critical to determining how valuable your business is. A young business that’s only
been in operation a few months maybe a harder sale because the transaction records and historical data are lacking. Be patient when it comes to growing a brand that’s profitable.
Accordingly, well-established businesses already have a leg up on newcomers. They automatically come with records to account for their growth, and the mere fact that they are still running is evidence that they can endure and overcome obstacles in the competitive world of e-commerce retail sales.
Newness isn’t necessarily a disadvantage, but the longer you’ve been in the business, the more clout your FBA business brings to the table when it comes to selling to an interested buyer.
Your Amazon business is worth something. As an entrepreneur, you’ve put in time and money, and energy, and maybe now you’ve found yourself ready to unload your business. Make sure your efforts are rewarded properly and your endeavors aren’t fruitless and explore what experienced investors have in mind for your FBA company.
Maybe you’re sitting on a goldmine. If you’ve been in business for a while or found the perfect niche product with skyrocketing sales, you might have an early retirement on the horizon.
To learn more about the value of your business, your selling options, and how to sell your Amazon business, contact [email protected] today and start the next step of your Amazon journey.