Popular Add-Backs for FBA Owners

single blog

Popular Add-Backs for FBA Owners

An add-back is an expense that isn’t needed to maintain your business. 

Or, in other words, a one-time expense that you don’t pass onto the next owner of your business. 

You might have heard of it – but have you been applying it when selling your FBA business? 

Many Amazon FBA business owners neglect add-back, which is essentially the same as leaving money on the table. 

Look at it this way: If you don’t apply add-backs to your Amazon FBA valuation, you might sell your business for $120,000 … when you could have got $200,000 for it.

In this article, we’ll be taking a look at the most popular add-backs you need to apply in order to increase your FBA’s valuation.

Personal Expenses 

Got a company car? 

Maybe you’ve got travel expenses or even mobile phone accounts.

Or maybe you subscribed to a mastermind.

It’s all good – but none of this should carry forward to a sale. 

Sure, the next owner might join the same mastermind and travel to the same conferences – but that’s all on them. 

Cost Reduction Ideas 

If you’re a savvy entrepreneur, you would have found some ways to cut costs over the years. 

Perhaps you decided to suspend shipping by air because you figured it was cheaper to use an alternative method instead. 

Or maybe you outsourced it. 

Whatever you did, you saved money … but your cost reduction ideas are add-backs that shouldn’t carry onto the next owner. 

Your Salary 

Yes, the owner’s salary is an add-back! 

Why?

Because if you’re a solo entrepreneur who’s taking home, say, $150,000 in salary directly from your FBA business, it’s a clear perk. It’s an add-back! 

If, on the other hand, you’re running your FBA business in a joint partnership, only one of the owner salaries is eligible for add-backs. 

Intellectual Property 

Maybe you’re like many other businesses who invested in intellectual property for your Amazon FBA business.

Maybe you purchased a copyright or a trademark, or maybe you patented something.

If so, these are all one-time expenses that you can add-back. 

On that note, intellectual property can also entitle you to tax reliefs, so this is something worth checking out, too. 

Overpaid Staff

Many first-time Amazon FBA owners hire people close to them – friends and family members. 

This is perfectly fine but it can also mean that you end up paying them more than they’re worth. And if you’re valuing your business while mistakenly factoring in your overpaid employees, you’re selling yourself short. 

So take a look at the people who currently work for your company and consider if you’re overpaying them or not. If you are, you will need to adjust their income in order to more accurately reflect what the next owner would be paying the same type of employee. 

Final Thoughts 

Add-backs are just one of many things you need to take into consideration when pricing up your business. You also need to look at the age of your business, how automated your business is, and it’s always a smart idea to work alongside a broker who can help you get the best price for your Amazon FBA – and help you get a deal over the line. 


Ready to sell your business for the best possible price? Start by clicking the link below! No obligation, no hard sell. Just solid, professional advice.

Recent Posts

5 Ways To Automate And Scale Your Amazon Business So That It’s Sellable

May 11, 2022

by Ben

5 Ways To Automate And Scale Your Amazon Business So That It’s Sellable

Of course, launching and running an Amazon store is a fantastic challenge. At times, it’s fun, ...

Mar 17, 2022

by Ben

Why You Need To Know Your Numbers – Case Study

Sarah (not her real name) approached us with $12 million in annual sales, $1.6 million in ...

Different Structuring Options For An Online Business Explained

Feb 14, 2022

by Ben

Online Business Deals: Different Structuring Options Explained

Have you launched a business, grown it, scaled it and nurtured it?  Excellent. Now, perhaps, it’s ...

The Most Common Mistakes You Should Never Make When Selling Your Online Business

Jan 5, 2022

by Ben

The Most Common Mistakes You Should Never Make When Selling Your Online Business

Imagine launching an online business, before spending time growing it, scaling it and turning it into ...

The Stages of Managing Offers For Your eCommerce Store

by Ben

The Stages of Managing Offers For Your eCommerce Store

Launching and scaling an online store is one thing – selling it is another. While building ...

5 Ways To Automate And Scale Your Amazon Business So That It’s Sellable

Jan 4, 2022

by Ben

6 Steps to Automated, Scalable, and Sellable Business

Want to create an automated, scalable and sellable business? Read on. Pretty early on in my ...

Why You Need Clean Financials When Selling Your Amazon Business

Dec 21, 2021

by Ben

Why You Need Clean Financials When Selling Your Amazon Business

How can you improve the value of your Amazon business? You can automate it, you can ...

How To Improve The Transferability Of Your Amazon Business

Nov 22, 2021

by Ben

How To Improve the Transferability of Your Amazon Business

A transferable Amazon business is one that is able to run successfully without you. It’s a ...

How Can I Make My Amazon FBA Business More Valuable To Buyers?

Nov 10, 2021

by Ben

3 Ways to Make Your Amazon FBA Business More Valuable

Ready to sell your Amazon FBA business but worried it’s not going to attract enough buyers?  ...

Build the Right Amazon FBA Exit Strategy

by Ben

Build the Right Amazon FBA Exit Strategy

How can you build the right exit strategy? While it feels good to build and scale ...

0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
0
Would love your thoughts, please comment.x
()
x