5 Steps On How To Find An Amazon FBA Business For Sale & Purchase It
If you don’t plan to start an Amazon FBA business by yourself from scratch, you always have other ways to have or own an Amazon FBA business. There are plenty of Amazon FBA businesses for sale available in the market. All you have to do is identify the right one and buy them. In recent times, it has become extremely common to buy Amazon FBA businesses for sale instead of starting their businesses.
Moreover, as this space has been growing immensely, it has become easier to find Amazon FBA businesses for sale in a certain niche and buy them. There are many benefits to acquiring a business compared to building one. First of all, you can save time and plenty of other hassles that come along with starting a business. Moreover, you can focus on the financials and the profits to be made with the acquired business.
How to Find An Amazon FBA Business For Sale and Purchase It?
5 steps can help you find a potential Amazon FBA business for sale and purchase the same. Let us have a look at these steps.
- Understand the Availability and Eligibility
Many individuals who aspire to buy Amazon FBA business for sale initially wonder if they can buy an Amazon Seller account. When you approach Amazon regarding purchasing a seller account, usually, Amazon mentions that purchasing seller accounts is not possible. However, in case the seller addresses the request to the seller support and then further gets approval to sell, changing the account information would then be allowed.
- Factors to Measure Worth
When it comes to understanding the worth of Amazon FBA businesses for sale, there are plenty of factors that have to be considered. To begin with, some of the most common factors that are considered include the age of the business, the consistency of the business, the net profit of the business, the different sales channels involved, the current board of members and leadership team including their impact on the business, the type of Amazon FBA business for sale, the efficiency of the sales process, and other factors.
In case you would like to gain detailed insight into the qualified valuation of the Amazon FBA business for sale, you can also consider approaching one of the available brokerage companies. These brokerage companies would not only help you understand the worth of the business in detail but can also help you with the purchase.
- Identify the Valuation
The value of a certain business can be identified based on the net profit as well as the sales of the company. You can consider the sales of the business to identify the valuation of the business when you would like to determine the median value of the business. When you are determining the business valuation based on sales, then the average price that is usually estimated is 2.5 times to 4.5 times the 12-month average monthly net profit. If the multiple is higher, the sales metrics are better and the risks are lower.
You can also calculate the Amazon FBA earning by using the SDE (Seller Discretionary Earnings) method of valuation or the EBITDA (Earnings before interest, taxes, depreciation, and amortization) method. The decision regarding the valuation method can be made based on the scale of the business. To use the SDE method, you can add the revenue along with the owner’s salary and subtract the cost of goods sold and the operating expenses from this sum. You can use the EBITDA method of valuation when you would like to evaluate the profitability of a business that has a higher valuation on the average scale.
- Find the Right Amazon FBA Business For Sale
Just like purchasing any other business, you can go ahead with purchasing an Amazon FBA business. The only key difference is that Amazon has a large number of very specific sales metrics. The entire process of finding an Amazon FBA business includes looking for a deal, making sure that the deal matches your requirements, conducting a comprehensive business audit, running thorough legal checks, acquiring legal documentation, closing the deal, and finally transferring the funds. If you aim to go forward with a multi-million deal, you should consider reaching out to a professional broker as they can help with businesses of large scale. However, there are also plenty of marketplaces available that you can use.
- Tick Your Checklist
Finally, before completing the process of buying an Amazon FBA business, make sure that you double-check all of the required aspects so that you can ensure that you purchase a profitable and stable business. Here are some of the factors you should consider before closing the deal.
- Optimized management
- Age and sales history
- Type of business
- Listing and positive reviews
- Accurate number and clean financials
- Product diversification
- Reason for selling
- Intangible assets
- Expandability and growth potential