Today we’re going to discuss Exit Strategies for web property owners. There are several different players in this segment – those that solely own websites, those that solely sell on Amazon, and then there’s a mix of entrepreneurs that sell various items on both their platform and on the Seller Central platform and other platforms.
There is no single type of exit strategy. There are several ways to strategically exit when you feel that it is time to move on from your online commerce business.
The common exit strategies include the following:
The exit strategy Amazon sellers use depends on the reason for their exit. Like most sellers, they want someone or another business to take care of the business they started and the people still working in it.
When it comes time to sell your online business, it’s best to talk to a brokerage that understands your company the way you do. At WebsiteClosers.com, we have a unique skill set. Besides being website brokers, we own and operate a large portfolio of web properties on several platforms, including some Seller Central accounts, eBay accounts, and more.
The first thing to think about regarding an Exit Strategy for your business is who you want to represent you during an exit.
We at WebsiteClosers.com focus on listening and learning what your needs are, then check market trends and valuation and provide an overall strategy that we think best fits your goals. After we discuss the strategy together, you will be in a better, more informed, position to decide your future.
To merge with another company is different from acquiring another company. When we talk about merging, there is a mutual decision between two companies to combine and pool their resources and their market share. On the other hand, the acquisition of another company means the purchase of another and integrating the resources and brand of one company with the other.
A merger exit strategy for an eCommerce business could be of three different types: Horizontal, Vertical, or Conglomerate.
When an acquisition happens, an Amazon business may buy only a portion of another company. Acquisition could be of two types: Asset Purchase or Stock Purchase.
Another Amazon exit strategy that business owners can take is to make their Amazon business public. This means that a once-private company can be offered to the public for the first time who can purchase shares of stocks and become owners of the company.
This initiative is done for a variety of reasons but mostly, owners do this to raise capital to be used for the expansion of their Amazon FBA business or pay off debts. It could also be done to work on the branding of the business – increasing brand awareness and credibility and consequently increasing sales.
An important note about an Exit Strategy for your business is to think about it and prepare for it before you exit. This will help you maximize the price “multiple” buyers are willing to pay for your business, and potentially help from a tax perspective.
Sometimes this means developing an exit plan and waiting until the time is right. And other times, the right move might be to list the property for sale quickly due to great performance results in the near term.
Another important note when thinking of an exit strategy is to think about what you’re going to do after you’ve left the company. Even if you do quite well monetarily when you sell your business, you will most likely need to do something else to increase net profit for the long term.
Amazon sellers are typically required to sign a non-compete after the sale process is completed. If sellers sign, the next question to ask is if the non-compete agreement is going to be for a limited period. Virtually every buyer on the market is going to require you to sign a non-compete, but as long as you won’t be competing directly with the business after the sale, most buyers will work with you.
However, there is another exit strategy that most Amazon sellers prefer – passing on the business to a family member. This ensures that the business stays within the family and their legacy is preserved.
In many cases, this exit strategy presents advantages to the business because of continuity and because family members are familiar with the values of the brand. However, a disadvantage here is the family member might not yet be ready to run the business, need a lot of training, or have family conflict over who runs the business.
Finally, a business exit strategy that does not involve selling the business to another owner or passing it on to a family member is when commerce entrepreneurs decide to close the business. Liquidating and winding down a business is done so that the liabilities are paid off through the sale of assets.
With good inventory management, identifying the assets to be sold would be easy. This type of exit strategy is chosen when one of the following scenarios happens:
An exit plan is not just implemented because of a plan to sell the business. It is done to ensure the continuity of the business operations – to protect not just the business but also the people who are working for the business and its stakeholders.
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