Selling Your Amazon Business? Here’s What You Need to Know

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Selling Your Amazon Business? Here’s What You Need to Know

Maybe you’re a born Amazon seller. But when it comes time to sell our Amazon business, it’s like we have to start all over again. 

Fortunately, lots of entrepreneurs before you have sold their Amazon business and moved on to new ventures. In this quick article, we’ll be sharing with you 4 of the most common questions about Amazon exits. 

When Should I Sell My Amazon Business?

Age is, without doubt, one of the most important factors here. If your business is less than 2 years old, it’s most likely too soon to sell it. This is because you won’t be able to show potential buyers a clear path to consistent profits and revenue. 

That said, some buyers want to jump onto a business that’s in the growth stage so that they reap the real rewards. Ideally, then, an Amazon business that’s 3+ years old is ripe for selling. An Amazon business that’s 5+ years old, and which is established and has already proven that it can generate consistent profits, is even better.

How Do I Value My Amazon Business? 

A number of metrics are taken into consideration whenever we value our Amazon business, with buyers using a multiple of your annual net profit. 

What multiple will they use? 

Usually, it’s based on their perceived value of your business, as well as their risk tolerance.

But while multiples depend on numerous factors, they usually lie between 24x – 48x your average net profit over the course of 12 months. 

For instance, let’s say your annual net profit is $200,000. Your valuation, then, is somewhere in the region of $400,000 and $800,000. 

To go deeper when valuing your business, you can also look at: 

  • Sales history 
  • Seasonality of products 
  • Customized products vs bulk products 
  • Automation (how much time and effort do you put into working on your business each week?)
  • Your suppliers (what’s your relationship with them like?) 
Should I Work With a Broker?

Let’s consider the advantages of selling your Amazon business with a broker. 

A broker is more experienced than you – they’ve sold multiple Amazon businesses in the past, and they know how to get the value you deserve. 

They also have more contacts than you and can find a potential buyer faster.

In fact, they won’t find just one potential buyer, they’ll find numerous. This creates competition and can drive the price up more.

And while brokers charge a commission (a percentage success fee), they know how to negotiate a deal, and will seek to find a price that suits all parties – both and the seller.   

How Long Will an Amazon Exit Take? 

This really depends on whether you decide to sell it alone or with an experienced broker. 

The terms of the deal are a factor, too. 

Large deals will, of course, take longer to complete than small ones because they’re more complex, and there’s more risk involved. 

However, the average timeframe you could be looking at will be between 90 days and 4 months.

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.

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