Are you interested in selling your e-commerce company, but you are not familiar with the process that you need to consider? Selling any e-commerce company doesn’t have to be difficult when you retain the services of a business broker. But the first decision that you’ll consider in this process is whether or not to sell your e-commerce company via a marketplace or a website.
There is no doubt that there are many different benefits to selling products online, which is probably what drew you into the process of doing it yourself. Reaching more customers than a traditional brick and mortar store and being able to sell at all hours the day greatly expands your potential to make profit. There are so many different e-commerce options, and as a result of that, people are looking to cash in and tap into the power of selling on an e-commerce website. Some merchants must consider this initial decision of selling on their own websites, such as an independent e-commerce website or selling through another company like Walmart, eBay, Etsy or Amazon. Determining what is most appropriate for your business involves thinking about the benefits and downsides of each.
There are many different advantages to selling on a third-party marketplace and this is a top reason why plenty of sellers use this option. First of all, it is simple to get started and maintain a business when launching on a third-party marketplace.
An online marketplace can simplify the process, particularly for new sellers. This is because the infrastructure is already established, and this saves the hassle and time associated with building your own website from scratch. Since no one individual seller owns an online marketplace, the payment and transaction details are handled by the marketplace.
This removes a lot of things from your to-do list and can make the process easier overall. Since many of these marketplaces already have established forms of traffic and plenty of people visiting their website, there are millions of shoppers already leveraging them to find the best deal. You can make an impact by tapping into the power of the traffic already established on the marketplace.
There are downsides, however, to selling on a marketplace. Since there are multiple competing brands on the same site, you must always be aware of how to stand out from everyone else who is trying to accomplish the same goal of stealing their market share. Your competitors might target shoppers who visit your individual listing and then place advertisements for their own products on your pages.
Whether or not this impedes your ability to do business, depends specifically on the competition intensity in any product category, which means that you might not get the easy sales or exposure that you are intending. Furthermore, people who purchase your products might never realize that you, as the third-party seller, truly exists. Most people who shop from these marketplaces, such as Amazon FBA, assume they are buying from that marketplace, even when it is relatively clear that they are purchasing from a third-party seller.
Because of these disadvantages, it is important to realize that you might want to do some additional steps to build a niche site and create your own brand awareness.
Selling your small business for the highest possible price is likely the result of many years of persistence and dedication. In fact, this might have been the dream when you launched your company.
But it can be very hard to find buyers for your business if you are not in a position to collect solicited offers or in a hot and popular niche.
The best way to gain access to a larger pool of qualified buyers and a more structured and efficient selling process is by working directly with an experienced business broker.
Much like a real estate agent, a business broker serves as a sort of matchmaking service to bring together sellers and buyers. The expertise of the right business broker can help you to get the highest possible sales price and make the process easier for you. There are several different ways that you can find a business broker.
Practice Your Own Due Diligence
Just as any prospective buyer of your company will do their own due diligence to complete research, you should too. Look at the broker’s experience, background and credentials. Have any complaints been launched against the broker, review the business bureau website and investigate the references provided by the business broker company. Make sure that you ask direct questions about whether or not they have handled this kind of business before.
Keep the Sale A Secret
If you are the chief person in charge of the company, avoid losing key suppliers and staff. Do not tell them that your business is for sale until you and the business broker are ready to move forward. The sale of your company is a very confidential matter and your business broker should have the same approach by ensuring all necessary safeguards are in place to protect the value of your company. One slipped word to your employees, supplier or customers that you’re selling could have negative repercussions for your business operations.
Be Aware of Upfront FeesBusiness brokers charge fees ranging from 10% to 15% commission, based on the sale price of your company. But be aware of any broker that is asking you for a significant fee upfront just to complete a business valuation or start any application process. Your business broker should be able to explain their individual process to you before you get started.
Consider the Marketing Plan and How This Will Influence Your Business Sale
Appropriately positioning the sale of your company to motivate and attract the buyers should be your top goal. Make sure that your business broker has a thorough marketing plan, including explanations about marketing strategies that could bring in a number of different types of valuable leads. Your broker should be able to walk you through how they’ve been in situations like this before and have helped people to prepare as effectively as possible. You should have a high level of confidence in your business broker’s ability to sell your company.
Since it’s such a personal issue, but also one that touches on your professional boundaries, you need to retain the services of someone you can trust and someone who has extensive experience in this field. Don’t hesitate to ask questions of the business broker during your initial conversation. You should feel confident and excited about the opportunity to work directly with a broker who knows exactly what they’re doing.
Some people have gone through the process of creating their first product on Amazon and then also launching a niche site in the same space. When the niche site begins to grow, you can also use direct links on that page to sell on Amazon associates.
This skill of building niche sites could help you rank your company more effectively in Google. And then also tap into the power of that tool to grow your Amazon FBA business even more effectively.
Referring a high volume of outside traffic can help to grow your Amazon FBA business. Most of the sales of your products should come directly from the traffic on Amazon in order to be effective. The niche site, however, definitely should send additional traffic and help you to grow the business.
This additional aspect of your company can be instrumental when it comes time to sell your business because this is a bonus selling point to potential buyers showing that you have already established a site that has powerful search engine optimization tools and is already driving traffic to the Amazon FBA business indicates that you have significant knowledge and a tool that can easily be passed on to the other buyers.
After running this business for several years, you might decide that you would wish to invest your money in other ventures. Furthermore, the particular products that might have inspired your Amazon FBA business and development of a niche site might no longer be your key area of interest.
Many business owners identify that where they are most passionate at that point in time, things will tend to be most successful. While this isn’t a rule of thumb that every single person should follow all of the time, it’s a good idea to pick products and businesses that you’re passionate about. This will be reflected in the overall development of your business and your ability to sell it in the future. The support of online business brokers can be extremely helpful in developing a plan to address how to sell your business sooner rather than later.
The support of a business broker helps you to understand business valuation, tools and tips that you can put into place now that will help sell your business more effectively, the power of the business listing and the value of working directly with a company that already has established buyers who are interested in purchasing your product.
The more work you have done on the back end to make your company as competitive as possible, such as establishing a niche site, will make your company more appealing when it comes time to list it for sale.
Discussing your options with a business broker prior to deciding to move forward can help you identify whether or not now is the right time to sell your Amazon FBA business and all of the related collateral, such as your niche site. The sooner that you can identify a broker who has plenty of experience and talent in the field, the easier it will be for you to sell your company.
If you are interested in leveraging your Amazon business and growing your business on Amazon FBA, one of the easiest ways to do so is to incorporate education into your daily life. Tuning in to a podcast can give you some quick ideas about what’s working for other people.
Perhaps you’re already swamped with keeping track of your inventory, making sure that you’re staying on top of your Amazon FBA game and dealing with the ins and outs of running a daily business. But one way to maximize and leverage your time is by listening to podcasts.
You can listen to podcasts while commuting, while carrying out your grocery shopping at the store, at the gym or during long walks that you take. You can even listen to Amazon FBA seller podcasts while you’re doing chores around the home. Listeners can catch up on shows that are easily downloadable via podcast format and stay on top of their business.
This is an excellent way as an Amazon seller to stay in the know about additional information and updates in the Amazon FBA seller world. There are a number of different types of podcasts that may be appropriate for an Amazon FBA seller and here are some you should certainly keep an eye out.
If you are contemplating launching an Amazon FBA business, you are joining an increasingly competitive pool of people who have realized that as third-party sellers on Amazon, they can sell products effectively and use many of the established customer service and shipping mechanism established by this e-commerce giant.
But there are many questions that you may have at the outset of launching your company, such as:
If you don’t wish to go through the challenges associated with launching an Amazon FBA business, you can tap into the power of an existing company, such as one that has already built a strong reputation on Amazon. Your Amazon FBA business gives you much faster way to launch off successfully because a person who is selling their company has already done much of the leg work in determining the demand and has established the systems that you can begin to use immediately as the newest seller by taking over their account.
What You Need to Know About Launching Your Own Amazon FBA Business?
If you decide that purchasing someone else’s existing Amazon FBA business with the help of a business broker is not the right avenue for you, you can launch your own business with a minimal investment. However, it is important to remember that how quickly you reap that investment back or begin to grow profits will depend on the leg work that you have done on your own and the types of products you have listed for sale. Having done this research, you will have a much better idea of what to anticipate and have realistic expectations about your business.
It’s not a lot of money to launch your own Amazon FBA business and you can usually get started for under $1000, but it can also take more money in order to test your market and determine whether the products you have selected are correct.
Things You Must Have in Order to Launch an Amazon FBA Business
There are several different aspects to running a successful Amazon FBA business that you must have in place whether you purchase someone else’s company or intend to launch your own. These include:
Tools and supplies include a printer, scale, boxes, computer, smartphone scanning app, and packing or shipping tape to close the boxes you’ll send to Amazon. The inventory you’ll need to consider will have to include at least $500 in seed money that can be used to purchase inventory.
Finally, you will need to invest in some form of training so that you understand how to launch your Amazon FBA business successfully. Because there are more successful sellers on Amazon FBA than ever before, it should not be hard to identify that there are many different programs, trainings, eBooks, podcast, and courses out there. However, selecting the one that is right for you is not necessarily easy.
You will want to do your research and get some feedback from people who have actually taken the course before deciding how to move forward on your own. When it comes time to celebrate your Amazon FBA business, you can leverage the power of business brokers like Website Closers to accomplish your goals.
You’ve heard the stories and the podcasts about running an Amazon FBA business and your interest has been piqued.
There is a lot of excitement around the Amazon FBA business, which is probably what landed you on to the website of business brokers who are selling many successful Amazon FBA businesses on a regular basis.
If you already know that you want to become an Amazon FBA seller but don’t want to put in the time and expenses of learning how to do it yourself, purchasing an existing Amazon FBA business is a great way to cut through the quarter and leverage your business successfully.
Understanding what it has taken for other Amazon FBA sellers to be successful as soon as possible out of the gate, can be instrumental in assisting you if you intend to purchase someone else’s Amazon FBA business or if you are a seller who intends to list your Amazon FBA business for sale and wants to help the new buyer step in as effectively as possible.
Top Tips for Running an Amazon FBA Business
Here are some of the most effective tips from people who have launched their Amazon FBA businesses and grew them to the point of being profitable or ultimately sell them with the help of a business broker.
Some of the easy tools that can be implemented for better sales on Amazon FBA include enhancing your SEO and ensuring that you have regular and consistent traffic to your website. The sooner you begin documenting how you came to learn this information and the systems you have in place to automate your business, the easier it will be to show an interested seller that you are prepared to list your company for sale and to hand it over sooner rather than later.
If you’re interested in selling your website and the associated company, there are two different options available to you. The first is to hire a website broker to sell your site. The second is to do all of the legwork yourself.
What Does a Broker Do?
There are a lot of tasks that must be accomplished if you choose not to hire a website broker to sell your site. These include getting a valuation, finding someone who is interested in purchasing a business in your niche, negotiating a price and closing out the deal. Because of the significant amount of work required and the high level of possibility that you could make an error, it is much easier to start searching for how to hire a website broker to sell your site.
In the process of choosing how to hire a website broker to sell your website, it’s important to realize that what you are essentially looking for is a business broker. A website broker evaluates all aspects of your website in order to help you effectively list and sell your company.
This means that a website broker evaluates your traffic, determines how much of it is organic versus paid, your official positioning in search engine rankings, how resilient you are to current changes in the market, the level of competition that currently exists in your niche, and the various revenue streams you have available to you through your website.
Brokers and Business Valuations
Of course, when selecting how to hire a broker to sell your website, another aspect of this professional will help you with is determining the amount of revenue that you’re making and how all of these other factors are built into what your website is truly worth on the open market.
A website broker who is knowledgeable about selling websites will look for possible issues that could hold back the value of your site. This means that you get an expert’s insight into small and big steps that you can take to increase the overall value of your website on the open market.
Many of these are short term elements and changes that can significantly boost the value of your company. All of this information gathered by your website broker is then compiled into a memorandum that the business broker uses. The business broker will use this information to craft your listing and to speak to prospective buyers.
Another major reason to choose to work directly with a business broker such as those working at Website Closers is because of the broad network they already have of prospective and serious buyers. It is not enough to simply list your company for sale online and hope that prospective buyers will come.
Rather, you need to have a leveraged network of people who are highly qualified to own and prepare to step into these business ownership roles. Your business broker vets these potential buyers and identifies those who are interested. The business broker plays a crucial role at this point in the process because they will interview these individuals and eliminate those who are not suitable.
The broker then continues to assist you with all aspects of closing out the sale, such as negotiation and guidance on whether or not you should take a deal.
You may also work with attorneys and other professionals, but your broker will also play an important role in looking at the contracts for both parties to sign and ensure that all possible issues have been handled in advance.
In running any business, certain fees and expenses must be accounted for. It goes without saying that you need to budget for this anticipated expenses. But concerns can arise if you’re not sure what the fees are. Thankfully, in running an Amazon FBA business, it’s easy to start tracking your fees from the outset.
Looking to start a business with much fewer startup costs than other prospective companies, it’s easier to have considered the potential to work as a third-party seller on Amazon. In recent years, these third-party sellers on Amazon using the fulfillment by Amazon model have successfully scaled their businesses and even been able to sell those companies with the help of an experienced business broker.
But launching an Amazon FBA business is not as simple as deciding to start your company, choosing one product, and setting up shop to immediately receive profits.
While there are shortcuts with many amazon FBA businesses that can help you avoid the traditional headaches, expense, and time invested to grow a company by other means, fulfillment by Amazon provides powerful opportunity to begin launching a business sooner rather than later and scaling it successfully.
Third party seller service revenues hit nearly $23 billion in 2016 alone and in fact, third party sellers account for more than 50% of the paid units sold on Amazon. To ensure the on time and accurate delivery that many Amazon customers expect, fulfillment by Amazon has become a very popular model. Fulfillment by Amazon works when you purchase items and send them to Amazon’s fulfillment centers for storage.
After Amazon takes your inventory, you can then monitor how much of it is available through their tracking system. A customer will then order your items through Amazon and Amazon selects and packs those sold items. Amazon is responsible for return management and customer service for those items, but FBA is not just for those items that are ordered on Amazon.com. Amazon keeps one single composite inventory in their fulfillment centers; meaning that you can sell across numerous sales channels.
There are many different benefits to using the fulfillment by Amazon model, which means that you must continue to research the process yourself to remain on the cutting edge with this increasingly popular business form. The top benefits of working with fulfillment by Amazon are customer service and return management, discounted shipping rates, the overall customer experience, being tied to the Amazon brand, and multi-channel Amazon fulfillment. There are costs associated with using the fulfillment by Amazon model.
Amazon breaks their fees down by the weight, time of year and size. You can expect storage and fulfillment fees to include things, such as product returns, shipping and handling of your order, picking and packing your order, customer service, and storage per cubic foot for each month. Costs will change for items sold on any channel other than Amazon.com. Different situations might also apply at particular pricing, such as clothing items carrying an additional fee, other fees like prep service, and storage and fulfillment fees rising every year from October to December.
More Amazon FBA buyers are coming on the market than ever before. Many of them with only the basic understanding that an Amazon FBA business has been established for some time and that these new business owners can step into an existing and proven algorithm.
However, it should be known that running an Amazon FBA business is a daily activity and one that requires consistent and persistent effort. Selling on Amazon is unlike any other channel in which a company might choose to sell its products. A third party marketplace created by Amazon complements their own retail business in which Amazon sources products directly from brands. The marketplace enables Amazon to collect a significant amount of data.
This means that Amazon retail can dig deeply into the data about customer preferences and then use it to identify its own sourcing strategy in future years. Because this data is collected by Amazon but is not shared with third party sellers, there is a big advantage to Amazon retail being able to determine the appropriate brands or SKUs that are already popular among customers. Amazon could take over sales of top selling items that were previously only sold by third-party sellers.
The buy box algorithm is another important component that an Amazon FBA seller can explain to an Amazon FBA buyer to give this buyer greater confidence and understanding of the Amazon platform.
This is the algorithm that determined which seller will have their products added to the customer’s cart when the customer selects the add to cart button after seeing the product. This algorithm is so critical that anyone who does not have a comprehensive understanding of how it works should not contemplate buying an Amazon FBA business. A seller could find themselves with a significant amount of inventory that will never be sold because the buy box is dominated by other sellers. Amazon wants to create a high quality and consistent experience for customers so it’s important to realize if you step into selling an Amazon FBA business, you can explain to a prospective buyer how the buy box algorithm boost works. The buy box algorithm evaluates each seller’s individual past performance, such as the likelihood of cancelled orders, the feedback rating and on time delivery. Therefore, that algorithm is more likely to favor the seller that uses the fulfillment by Amazon program. FBA enables sellers to ship products in bulk to Amazon fulfillment sellers, however, when using the FBA program, sellers must also accept Amazon’s very lax refund policy. The marketplace is a fast evolving one on Amazon FBA and the items that a seller has in his or her catalog are likely to evolve over time as the competition on specific items changes.
As you attempt to introduce a new prospective buyer to your Amazon FBA business, you need to explain more than just the basics of identifying products, shipping them to the warehouse, and managing customer service. It goes farther beyond that in terms of the research that you have done to make your Amazon efforts as successful as possible.
More third party sellers are active on Amazon than ever before but likewise, this has been followed by a trend for people who try to purchase Amazon businesses for sale. With increasing competition, what exactly is behind the growth for Amazon businesses for sale? Many website brokers, such as Website Closers, are consumers handling asks from FBA business sellers who have worked very hard to establish their Amazon FBA business and are contemplating trading it and enlisting it for sale. An increasing percentage of the online business listings available with companies such as Website Closers are Amazon based.
Any boost of sellers from a type of businesses or one specific niche could be seen as a warning sign for that particular niche. However, this is not always the case. As one example of a niche in which a surge of business sale listings could be a sign, consider e-cigarette stores. When more of the requests for business brokers to help sell these stores, this could indicate that this was due to the FDA attempting to regulate the industry and close out existing retailers.
Those retailers saw the problematic signs and decided to get out. So the leading question for people who are thinking about purchasing an Amazon based business is, is there warning signs for trouble?
Are Amazon business owners seeing those signs and deciding to cash out when they can? One of the leading reasons why Amazon FBA businesses are now going up for sale is because they are finally old enough.
Amazon does not really say how many FBA sellers are involved in the program or the FBA program. They do share details to show that growth has become significant over the last couple of years. This means plenty of time for someone to establish and grow an Amazon FBA business.
All of those sellers who bought into the program early on are now coming into their fourth year of being on the platform. Many entrepreneurs want to consider listing their Amazon FBA business or any business for sale after just a couple years of being in business. It is possible that these businesses are coming of age.
Another reason that people are considering contacting website brokers is because people are finally learning that Amazon businesses can be listed for sale. Amazon, in the past, had a stance that many seller accounts could not be transferred but this has changed in recent years. This hasn’t even stopped many Amazon sellers from truly selling their FBA stores.
Many buyers and sellers realize that transferring and selling their Amazon business wasn’t that difficult, which means that as more of this word has gotten out across forums and other places online where Amazon FBA sellers are interacting, that more people are considering this.
A third reason why more Amazon FBA businesses are available for sale is that a higher portion of e-commerce stores have some Amazon component. With Amazon seller growth being consistent, this means that more people are contemplating the benefits of selling their Amazon FBA business through the help of experienced business brokers like Website Closers.