Buying  selling amazon fba businesses

Buying selling amazon fba businesses

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Buying & Selling Amazon FBA Businesses

Here’s the Breakdown on Amazon FBA Niches We’ve Sold:

  • 1 Home & Kitchen
  • 1 Automotive
  • 2 Fitness
  • 1 Toys & Games
  • 1 Sports
  • 1 Home Improvement
  • 1 Baby Care
  • 1 Outdoor & Patio
  • 1 DIY & Crafts
  • 2 Health & Personal Care

Our most recent data-driven research failed to identify a clear niche winner. This time, we had more agreements to examine, and the Home and Kitchen sector emerged as a surprising (or unsurprising, depending on your level of familiarity with the area) leader.

Although there were no clear victors the previous time, the health-related sector saw a lot of sales. The number of FBA businesses being sold on our marketplace this time includes three related to sports, two unique to health & personal care, and two specific to fitness. If you combine these company kinds, the health industry as a whole continues to be the most popular.

Given how many things Home & Kitchen encompasses, it makes natural that it would be a popular niche. After all, whole niche content sites are sometimes created around just a FEW of those products, like toasters or woks.

I predict that Health will remain the top category overall, closely followed by Home & Kitchen, which can be tied to healthy living through products like blenders or juicers.

Here is an overview of recent business data:

Transactions: 12

Average Selling Period: 90 days (64 without an outlier)

Multiple of the average sale price: 23

List Price Multiple on Average: 26

$192,110 is the average sale deal size.

List price per deal: $223,952

Your attention may first be drawn to the fact that it typically takes 90 days to sell an Amazon FBA firm. That now includes businesses that sell unusually slowly for us, like our $1.7 million FBA partnership with Amazon.

Even with that anomaly eliminated, it takes an average of 64 days for an Amazon FBA firm to transition from being live on our marketplace to being in the possession of a new owner. The schedule is a little bit longer than our market's average, which is more or less 45 days.

There are a few factors that contribute to Amazon FBA firms selling more slowly.

First of all, compared to traditional affiliate content sites, where the only true continuous expense is often placing new content orders, Amazon FBA businesses have more moving pieces. There may be several suppliers, sophisticated logistical systems, and more sophisticated customer service systems with Amazon FBA firms (the majority of affiliate content sites have zero customer service expenses).

Now is a FANTASTIC moment to search our marketplace and seriously look for amazing deals if you're a buyer with a sizable war chest. These companies' worth will probably keep rising in value. The market will eventually shift into a seller's market as more buyers come onto the scene, in which case an FBA business will be sold for multiples more in line with the 35–45x range.

In order to launch actual brands rapidly, many purchasers are buying Amazon FBA companies. Buyers adore the fact that the company controls an actual, physical product and has already taken care of all the logistics. They may easily start selling their goods through various channels with their own store by setting up a Shopify store with complete marketing funnels. Or, since the item has already been created and proven to be successful, buyers frequently grow the business by getting the items listed on other online stores like Walmart, Home Depot, Houzz, or Jet.

This information may discourage you as a seller or make you decide not to sell your company at all. Why sell now when you may hold off for 8 to 12 months and perhaps see a 15% or more boost in the value of your company? Not to mention, adding 8–12 months of business experience and prospective growth could significantly raise the worth of your company.

I'll go into more detail about my opinions on that below, but first I wanted to provide you some basic advise, regardless of whether you decide to wait to sell your business or list it with us right away.

What Is Your Best Advice for Selling an FBA Business on Amazon?

In my opinion, the majority of purchasers seek risk reduction, particularly in the FBA market. When it's feasible, search for chances to create new SKUs and list your products on Amazon marketplaces in other nations (i.e., moving beyond simply the U.S. market and into Amazon's E.U. or Canadian markets).

How Do You See the Future of Amazon FBA?

I predict that it will keep expanding and that it will become increasingly difficult for new players to join. The importance of creating a dependable brand and figuring out how to provide your clients with extra value will increase as market competition heats up.

What Is Your Best Advice for Selling an FBA Business on Amazon?

Don't put off selling your firm until it starts to struggle. A business that is steady or expanding can be sold for more money than one that is struggling. When considering the sale of your business, considerations go beyond the valuation. Leverage is also important. If you sell the company at the correct time, you'll probably get a greater multiple and more leverage.

Yes, you will miss out on the income from productive months, but in the long run, you'll have more money available to launch your next project sooner. Your time and the time worth of money both constitute the opportunity cost.

How Do You See the Future of Amazon FBA?

To the right and up.

Australia is the next market that FBA merchants will be able to target as Amazon continues to expand. In particular, in crowded niches, the competition is going to heat up fast and make it challenging for new players to enter the fray.

Extra Tip: Since Amazon only allows you to go back three months for the most of these information, pull your Amazon reports (by SKU, inventory, ACOS, and PPC analytics) from Amazon Seller Central every single month.

We can help you if you wish to conduct a thorough exit planning for your Amazon FBA firm. We continuously provide this service to FBA sellers without charge. These exit strategies can be brief and straightforward, lasting just a month. If your company is larger and more sophisticated, these campaigns may occasionally last for several months or even several years. In either case, having a strong exit strategy is a terrific approach to position your exit for the most possible return.

Why Would Anyone Want To Sell An Amazon FBA Business In A Buyer's Market?

Why indeed?

You only need to wait a few months, as I said above, to observe an additional 15% boost in the average sales prices for FBA firms. These few months could significantly increase your multiple by growing your company to new heights and adding complete months to your overall track record.

Why sell now then?

So, don't try to sell the company. If you want to receive the best deal, you should wait.

Unless… (There is that disclaimer)

You really HAVE a REASON to sell the company. Selling your FBA business even at a 23x profit margin means that you will receive about TWO YEARS' worth of profits all at once (or very close to it, depending on the terms of your negotiations).

Is there a chance to make a real estate investment? Is there a personal need for that amount of money in your life? Given that money now has more influence than money in the future, it might be advantageous to avoid waiting.

You have another project you're working on that is taking up all of your time if you're like the vast majority of our sellers, which is one of the biggest reasons to sell the firm. Degrade your old business now rather than letting it gather dust.

One thing Alex mentioned above is that competition in the Amazon FBA market is only going to increase. If you sold your FBA company right now, you could utilize the money to start up and expand another FBA company in a much more cutthroat (and lucrative) market, giving you an advantage over anyone else just entering that market.

You will, after all, have a war chest, allowing you to spend more on:

product creation

Number of items you can order

Marketing Consumer Assistance 

Etc.

If you use it wisely to compete in that market, this kind of money infusion may potentially dethrone the leader in some areas.

If you use it wisely to compete in that market, this kind of money infusion may potentially dethrone the leader in some areas.

There are many investors looking for this kind of firm right now, making it an attractive buyer's market. Even in a buyer's market, it is still a smart moment to make that profitable exit if you have a solid plan on how to use the funds to leverage it into more lucrative chances for yourself.

In the end, the choice is yours.

Check out our blog post on how to sell an Amazon FBA business for the most recent information on how to sell your FBA business. It walks you through each step of how to get your business ready for.

Do you have a solid plan in place for how you intend to use the money? If not, waiting to sell can be the wisest course of action because you'll gain from an overall increase in sales multiple, which will lead to a better valuation.

Check out our free business valuation calculator to obtain a ballpark idea of the value of your asset if you're interested in where your company stands right now.

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