Creating a successful Amazon business requires a considerable amount of hard work.
After putting in the hard work, it’s time to sell but how does one approach such a monumental task without making mistakes? It’s all about recognizing the critical steps and adjusting along the way.
1) Understand Your Finances
Your finances are going to include the profits coming in and expenses going out. If you’re not able to tally this information, it might be hard to figure out the appropriate valuation for the Amazon business. Spend time analyzing this information and figuring out what’s important when it comes to your finances.
For example, you should be taking a look at information such as personal salary, business-related expenses, miscellaneous expenses, and general depreciation (if necessary). The goal is to paint a clear picture of where a business is cutting costs and what is being offered to the seller. This will help you deal with the brokerage firm when it comes to selling along with knowing what your options are as a whole.
Many business owners set up a great business and then ignore their finances when it comes to selling. Remember, someone is going to take over the business, and you want to illustrate the value they’re getting. In some cases, your costs aren’t going to be the same as their costs.
They might take a smaller salary or not spend money on some of the things you did. This is where you need to divide each expense up and illustrate exactly where the funds were going at the time.
2) Establish Value of Amazon Business
The value of your business is going to determine the price tag.
If you’re unsure about how much the business is valued, it becomes a guessing game and is one of the worst positions to be in as a business owner. Think about the amount of revenue coming in and then generate a final figure based on this number.
In most cases, you can use a set formula based on a 20-30x multiple on your monthly earnings. So, if you are earning $1000/month, you can sell the entire business for around $20,000-30,000. Of course, this is a generic figure, and there are other variables at play such as brand value, brand recognition, inventory, margins, growth opportunities, number of staff, and more.
Think about these details and come up with a set figure. This is the only way to end up with a good deal that works for both parties. It is easy to get swindled at this stage, and it is one of the reasons business owners are told to remain patient.
3) Factor in Fees/Commissions
There are set fees in place when it comes to the sale of an Amazon business.
Keeping these in mind will matter as you are scouring the market to find an apt fit. For example, there are going to be brokerage fees based on the firm helping you sell. They are going to ask for a set fee because their services have to be compensated.
You gain the security of knowing they will take care of the selling process and make sure your transfer goes through as intended.
You may also be expected to pay legal fees on the sale based on the rule of the land where you reside. The same applies to taxes one may have to pay based on the information in front of them. Having these regulations in place will always matter while determining how much to pay.
It is also best to know when these fees will be paid as they are going to come up as soon as the payment goes through. Keep this information on hand and know what is expected of you. In most cases, the brokerage firm will be able to provide this information to you in advance.
4) Sign Up With Firm
It’s always best to go with an established firm.
They have years of expertise in helping Amazon business owners, which is a must when it comes to a sale of this magnitude. You should not have to pay a high amount for this process, but it’s a worthwhile investment nonetheless. You need to sign up with the firm and make sure they are the real deal.
In most cases, you will be able to look at a firm such as Empire Flippers to do the process for you. They have an established network of buyers and sellers making it easier to get things done quickly.
5) Set Up Sales Pitch to Prospective Buyers (Used and Requested by Firms)
What is your sales pitch like?
This is the next step in the selling process and is just as important as any other. Remember, this is similar to selling a product except for this time it’s your entire business. You are looking to woo the prospective buyer and illustrate why your business is the real deal.
You should be looking at creating a comprehensive package to market your business. This is going to include critical information they may require (your brokerage can have requirements too!), and this should be kept in the package for their eyes.
6) Always Ask For Conference Calls
You need to have a set condition when it comes to speaking to prospective buyers.
Don’t go with those who make blind purchases because these are often buyers who are scouting the market more than anything else. They’re usually not serious about their bids and might not care about what they are doing. This is why you want to stick to asking for conference calls.
The idea is to make sure you are speaking to them and ironing out the details in person.
You don’t want to have to deal with a cancellation later on because the communication wasn’t on point.
7) Begin Sales Process
The sales process can begin once you have started to go through the conference call stage.
The idea now is to let the firm know you are ready to start looking at selling to this client. There is a waiting period as they look to process the client and make sure everything checks out again. During this time, you should be looking to do your homework and ensure everything checks out too.
There is never such a thing as too much due diligence!
Think about this as you are ready to sell the business and move forward with your life.
8) Carry Out Your Research
Focusing on what was mentioned previously, you want to ensure research is being done on the buyer.
You want to take a look at his/her track record, what they are willing to offer, and if there are any glaring signs to be aware of. If not, you are going to be good to go. With a good brokerage firm, you should be able to get a professional to vet the buyer.
This includes a deposit being made for them to even speak to you.
Why not go with a firm for this reason alone? It ensures you are not left hoping for the best.
9) Set Up Agreement
You can now start to set up the agreement.
It is best to have this done by a legal professional, but if not, you need to get the agreement in place as soon as possible. This deal should have all of the terms listed out, and it should be as transparent as possible. Don’t assume anything and have it written out.
If the other party isn’t happy, you can both sit down to iron out the details again.
This is always better than hoping they interpret things the way you want them to as that rarely works out.
10) Complete Sale
You have to start looking at sealing the deal at this point.
The goal is to let the brokerage firm know; you are ready to process the sale and have it go through. The firm is going to give you directions at this stage to move over certain files and related information as soon as you can. It is the only way to ensure everything goes ahead smoothly.
Firms have a lot of experience, and they will ensure everything does pan out. You are welcome to ask them questions during this step to ensure it does check out and you do get the funds.
These are the steps for selling an Amazon business in this day and age. Yes, it does seem to take a lot of work, but when you get the ball rolling, it will pan out as you intend for it too. There are many Amazon businesses sold on a monthly business, and there is money to be made.
You will be surprised as to how much buyers are willing to pay to sellers who are serious.
If you do this right, you can get the appropriate amount of money for the business.