Selling An Amazon FBA business (Ultimate Guide)
Are you ready to move onto a new project or just take a step back to enjoy life more? Selling an Amazon FBA business can be a great way to put a little money in the bank. No matter what your reason for selling, you should know how to command top dollar for the business you worked so hard to build.
If you want to know more about how to sell your business, then it’s time to dive right in!
Selling The Biz is supported by affiliate commissions. When you use a service or product we recommend on our site, we may earn a commission.
What Types of Amazon FBA Businesses Sell?
The truth is that not all businesses are created equal. While you may have spent years growing your income through sales on Amazon, it may not be worth as much as you thought. The profit you can make from selling an Amazon FBA business is dependent on the type of business you run.
Consider your business structure before taking the leap into selling. There are three major types of Amazon FBA businesses: resellers, private labelers, and proprietary products.
Resale businesses are often worth the least among the three. When you purchase goods at wholesale prices and then sell them at retail, you have the potential for more volatility. Not to mention, obtaining your wholesale prices can sometimes be difficult.
This potential for volatility affects your bottom line and what your Amazon FBA business could be worth.
Private labeling products is slightly better because it means that you have built up recognition for your own brand. While customers could purchase the same product elsewhere, buyers will associate their buying history with you first.
This often means that you have some type of deal worked out with the supplier, reducing the instability of your profit that is seen in typical resale businesses. This income security boosts what your Amazon FBA business could be worth.
Last but not least, selling a proprietary product that only you have the rights to is the best way to secure a profit for your Amazon FBA business. Prospective business buyers are willing to pay more money for the rights to your product and the loyal following you have built up for yourself on Amazon.
If you want to make more from selling an Amazon FBA business, it could be crucial to restructure your business model.
Valuing an Amazon FBA Business
If you have experience with selling other online businesses, selling an Amazon FBA business and valuing it will be a piece of cake. They are valued based on a number known as the seller discretionary earnings or SDE for short.
This number denotes the profit that you earned after all of your expenses were accounted for.
A simple formula looks something like this:
SDE = Total revenue – Cost of Goods Sold and Operating Expenses + Owner Salary
In other words, your Amazon FBA business is valued first on the amount of money that you bring in over a given period. This is your revenue.
Subtract out the cost of the goods that you sold as well as any other operating expenses you may have had. Operating expenses can include any employee salaries, shipping services, software, or Amazon fees.
At the end, you can add back any salary that you paid to yourself. This final number will give you your profit or the SDE, the figure that your business’s value is based on.
Your business is typically worth two to three times your SDE. If your business is currently making about $20,000 per year, you can expect to reap $40,000 to $60,000 in profit from the sale of the business.
As you can see, this wide range in figures could add up to be quite a handsome sum. What determines whether your business is worth two times the annual SDE or three times the annual SDE? Let’s take a closer look.
Is Your Business Worth Two or Three Times Your SDE (Or More)?
When you want to sell an Amazon FBA business, you have to consider several factors beyond your SDE. These outside influences can have a major impact on the bottom line profit that you will make from selling your business.
First and foremost, the age of the business can play a huge role in what the business is worth. An older business with a longer track record has proven itself and has good indicators of the success it could have in the future.
Most buyers want to see a minimum history of eighteen months, though some may prefer a two- to three-year history. The longer your Amazon FBA business has been operational and profitable, the more value it has when you attempt to sell it.
Keep in mind that these are really just guidelines. It shouldn’t stop you from selling a younger business if you can find a buyer who is willing to tolerate more risk.
Along with the age of the business, buyers are definitely going to want to see your current selling trends. Is the business on the decline or is it trending upward? A modest upward trend tends to be the best time to sell a business for a valuable profit.
A prospective buyer wants to put all of this talk of profit in perspective based on how much effort is required on your part. Are you slaving away at this business, burning the midnight oil seven days a week? If so, it might not bode well for the potential sale.
One of the things that buyers tend to look for is a stream of passive income. They want to enjoy the profits while working minimal hours each week. Many do not mind if you outsource some labor, but they don’t often want to take on responsibilities that will total more than fifteen to twenty hours each week.
If your Amazon FBA business meets these criteria, it may be worth more:
- A proven track record of two to three years
- A small time investment of ten hours or less
- A modest upward trend
- A steady supply of goods that can be sustained long-term
Add More Value to Your Amazon FBA Business with a Brand Site
Sometimes, it might make sense for you to branch out from your Amazon page and build your own brand site. This site makes the sale of your items look professional and polished, but it goes even deeper than that.
When you have your own website, you have control over the narrative. You can easily produce content that encourages readers to purchase your products over those of your competitors.
Consider all of the different ways that a separate brand site could help you to sell an Amazon FBA business:
- A constant source of traffic optimized through the search engines
- A list of email subscribers that you can contact regularly about new products or sales
- Blogs that give more information about your products or valuable insight to the customer
- Affiliate marketing income
- Advertisement revenue
It may take some time for you to build up a website that looks professional, but it could be worth your investment. Done correctly, a website should be sending more traffic over to your Amazon account and encourage prospective customers to make a purchase.
When you are listing your Amazon FBA business for sale, make sure you include information about this page. A regular content strategy like blogging is appealing to buyers who don’t mind the potential upkeep. Maintaining the blog could even be outsourced to freelancers if they don’t want to deal with it personally.
A business that seems more well-rounded and established is likely to sell better and for a greater profit. If you don’t already have this type of website, take three to four months to establish it before listing your business for sale. It could make a major difference in your bottom line!
What is the Most an Amazon FBA Business Sold For?
If you are planning to sell an Amazon FBA business, you might be wondering what these businesses fetch on marketplace sites. Understanding how sites are valued is important, but you probably want to hear more about the cash you could walk away with.
Most businesses net between two to three times their annual income. However, that doesn’t necessarily tell you what the list price is.
The average list price tends to hover around $223,000. Remember that there can be outliers that are significantly more expensive.
As a seller, you should be aware that not all sites will fetch their list price. Many buyers will submit offers under the list price, and it is up to you whether you accept. You can always submit a counteroffer to meet in the middle if you feel someone is low-balling you.
When it comes to the actual average sale price, it tends to be just under $200,000.
That being said, we sold our Amazon FBA business for a large seven figure sum after only 14 months of building the business! So the fact is, there are many Amazon FBA businesses that sell for seven and eight figure amounts. It’s just not the norm.
Consider the pricing of your Amazon FBA business. Most businesses that sell range from 23 to 26 times the monthly profit. This number falls right in line with the standard rule of thumb, between two to three times the annual income or SDE.
Because these businesses can be quite expensive, they are not often paid for upfront. Many buyers and sellers are able to work out some sort of financing deal.
A broker can help you to structure a deal that works for both parties. You might receive a large portion of the proceeds from your sale upfront while financing the remainder. The terms can vary but there are lots of options on the table.
How Long Does It Take to Sell an Amazon FBA Business?
Are you in a hurry to get your Amazon FBA business off your hands? If you are in a rush to unload your current project, you might want to think again. Transferring these types of businesses to a new buyer can take some time.
The sale of these businesses tends to take longer than other types of website sales, including those with affiliate marketing. Most deals will take more than two months to close and completely transfer the business to a new buyer.
Why would selling an Amazon FBA business require more time than other types of content-based sites? The answer probably won’t surprise you.
The business itself is far more involved than a site that only contains a blog, some web traffic, and affiliate marketing content. Consider all of the things that are involved in running a successful Amazon FBA business:
- Handling contracts and relationships with suppliers
- Managing logistic systems
- Customer service platforms
- Reviewing the overall trends of the business
- Monitoring the brand site and any related affiliate marketing content
Other types of content-based sites only consist of the brand page, social media, advertisement revenue, and possibly money from affiliate marketing. They are less complicated to sell and often sell faster than an Amazon FBA business will.
In order to get the best offer for your business, you must be able to be patient. If you are in a hurry to make a sale, you might settle for less than the business is truly worth.
Before you list it for sale, make sure that you are okay running it or have systems in place to run it for an additional two to three months. This might mean outsourcing some of your work if you have already moved on to a new project.
Is It Legal to Sell My Amazon FBA Business?
There is a lot of debate surrounding the legality of selling an Amazon FBA business. Much ink has been spilled over whether you can actually transfer your account to another person. Is it really legal to sell your business to a new owner?
The answer is yes. You can sell your Amazon FBA business, but you have to be smart about how you do it.
For starters, you should consider structuring your business as a limited liability company or LLC. This protects you and makes the Amazon account an asset of the business. With this updated status, you can indeed transfer the account to a new owner.
You should also be using a business bank account and email address for your business. Not only is this a smart business practice to separate business expenses from personal, it can also make transferring your account easier.
When you sell your business, these bank accounts and email accounts will transfer to the new owner as well.
You will have to submit paperwork to Amazon to prove the sale of the business in order to finalize the transfer. This can be quite a process and many people complain of the tedious nature of submitting documents just to have them rejected.
Simply plan ahead and know that the process of transferring your Amazon FBA business to a new owner may take some time.
Can I Sell My Amazon FBA Business?
Once you decide that selling is the right move for you, you need to know whether you actually can sell the business. The best route to take is to contact Amazon seller support and ask them about the procedures for an account transfer.
Their customer service department should be able to review your account and ensure transferability.
Not surprisingly, Amazon is mostly quiet about how you can sell your Amazon FBA business to someone else. There is no standard protocol that they have released for how to go about this.
When you contact their support department, make sure to ask if there are any issues that would keep you from transferring your account to someone else.
You also want to make sure that they can transfer all of your customer reviews. After all, this is the bread and butter of your business. Many people make sales on Amazon based solely on the positive reviews for their products.
Your prospective business buyer is going to want to see those reviews listed on their new account. Before you even list the business for sale either privately or through a broker, you need to ensure that it can be a smooth transfer.
How to Sell an Amazon FBA Business
Are you ready to learn how to sell an Amazon FBA business? Selling is a little more involved than simply putting your feelers out for a new buyer. You really need to spend some time preparing your business before you can move forward with the rest of the process.
Here are a few tips to help you have a smooth sale.
Reduce Your Dependency
The truth is that your entire business model relies on other people. Are you dependent mostly on one supplier or one specific product? Consider where the weaknesses are within your current business model.
This step is all about reducing risk to your new buyer. They want to know that your business is sustainable, even if something dramatic happens to product availability or your supplier relationship.
If you run a resale business, this is particularly true. Do you rely on one product or supplier for ninety percent of your sales? This could spell disaster if your wholesaler raises their prices or runs out of inventory.
In other words, it is time to diversify the offerings and suppliers that you use. Don’t be so dependent on one or two products for the majority of your income.
Selling a proprietary product gives you a little more leeway because there is less competition for your specific product. After all, you are the only one who can sell this product. Buyers are more likely to pay a premium price for something that you have the exclusive rights to.
Gather Up Financial Documents
Once your Amazon FBA business is optimized for sale, it is time to do a deep dive into your company finances. You need to ensure that you have detailed records for the income and expenses your business incurs.
Make sure that you have a separate bank account associated with your business. A separate account will make the transfer of your business easier. However, it also makes it easier to identify your income and real expenses when the business is separated from your personal account.
If possible, refrain from making personal purchases through your business account for at least a year or two prior to the sale of your business. This makes the financials much cleaner for a buyer or for a buyer’s lender to consider if they are using financing.
Gathering these documents together will be part of your due diligence in the sale of the business anyway. You will likely be asked for information like:
- Bank statements
- Screenshots of traffic to your brand page
- Screenshots of your affiliate marketing income
- Contracts with suppliers and wholesalers
- Amazon statements
When you know that selling your Amazon FBA business is in your future, minimize the amount of expenses that you incur. Now is not the time to make large purchases such as new computers or new product development. You may not necessarily be able to recoup all of these costs in the sale and it can negatively impact your SDE.
Train Your New Buyer
Before listing the business for sale, you should prepare a document that details how your business currently runs. This is a document that can serve to train your new buyer, but it does so much more than that.
Buyers often want to purchase a new business that requires minimal upkeep for an excellent profit. They may want to work just a few hours each week to maintain the growth of the brand. By breaking down exactly how you spend your time each day or week, they have a more realistic idea of how profitable the business is.
The goal here is not to overwhelm the buyer with minutiae. Make a general overview that you can give as a type of prospectus to interested parties. They may not need to know all of the details of things like supplier relationships until after they decide to move forward with the purchase.
Along with the training guide, you might consider putting together a potential guide for the future. List ways that the business could be improved. If you have considered growing the business but simply didn’t have time, provide a short description of how you thought the process would go.
While a buyer may choose to disregard your advice or projections, it can be a worthwhile investment of your time. This type of document gives better insight into how the business operates and whether it can be successful long-term.
Where Can I Sell My Amazon FBA Business?
There are a number of ways you can find buyers to purchase your business. Below we look at all of the options and you will need to decide which works best for you.
Find Your Own Buyer
Do you already know someone who might be interested in taking over your Amazon FBA business? This might be a friend or someone you know locally who is interested in running their own online business. Be sure to put your feelers out there to see if you know someone who could potentially be interested in the sale of your business.
Not sure who might be interested in your Amazon FBA business? Think about who your competitors are. This might be a great opportunity for them to grab up even more of the market share.
You might be surprised how willing your competitors would be to put you out of business and claim your customers as their own.
If you can find your own buyer, you will come out ahead financially when the sale is over. Brokers and marketplaces frequently charge listing fees and commissions upon the sale of a business.
Just remember that selling a business on your own can have its disadvantages too. You will be fully responsible for the legal aspect of transferring your business over to a new owner. You may have to do things like:
- Draw up a contract for the sale
- Escrow the money to ensure a smooth payment
- Handle all of the details for transferring information over to a new buyer
- Set up a support system for your buyer for a set period of time after the sale
In order to avoid the headache of selling it on your own, many people choose to pay the fees associated with hiring a website broker.
Contact a Website Broker
Most people who are interested in selling an Amazon FBA business are not interested in handling the legal aspect of the sale on their own. It can be tedious, nerve-wracking, and difficult to have zero support during this process.
This is why most sellers will turn to popular marketplaces and brokers that are designed to connect buyers and sellers.
By listing on these pages, you have access to an interested group of eager buyers. They are already congregating on these sites, looking for their next business investment. Instead of traipsing around town advertising your sale, these brokers are responsible for handling it for you.
If you have no leads for someone who would be interested in the purchase of your website, then turning to a broker could be right for you.
Not to mention, the process goes much smoother with a professional holding your hand throughout the sale. Your designated representative can help with simple yet time-consuming things such as:
- Fielding initial buyer inquiries with your prospectus and training documents
- Making offers and counteroffers
- Setting up financing deals if the buyer cannot afford the purchase outright
- Escrowing funds
- Performing due diligence on income, expenses, and traffic
- Offer legal advice on the best way to transfer the business to a new owner
If you do a quick search online, you will find that there are several popular brokers available to you. Keep in mind that each one will specialize in certain types of businesses, such as those with certain income requirements or those geared toward the sale of smaller businesses.
Don’t forget that there is a fee associated with these services. The specific fee will vary based on the broker you choose. Be prepared to pay a percentage of your sale price in exchange for their services.
Selling with Popular Brokerages
Once you are committed to selling your Amazon FBA business, you should have a thorough understanding of what each of the popular marketplaces and brokers can offer you. Knowing their fees, their benefits, and how they can help will guide you toward making the right decision.
With all of the details spelled out for you, you have a better chance of getting top dollar for your established business.
Empire Flippers is another popular marketplace that can help you to generate buyers for the sale of your business. By listing here, you give them exclusive rights to sell your Amazon FBA business for at least two months. If the business hasn’t sold by then, you have the right to take down the listing and posit it elsewhere.
In order to list your business with Empire Flippers, it has to meet a few key requirements:
- An average of $1,000 or more per month in net profit
- History of twelve months of established revenue
- All affiliate marketing and similar features must be on the same domain for a one-year minimum
- More than 50 percent of income must come from multiple clients
For most sellers, meeting these criteria should be no problem.
One of the benefits of choosing Empire Flippers is that they do not charge a listing fee. They do have slightly higher success fees that are payable upon the sale of your business.
Expect to pay 15 percent commission to Empire Flippers for all sales under $1 million.
If you aren’t sure how much to sell your business for, Empire Flippers can assist you with valuation. They examine your main monetization method, traffic, revenue, and even your following on social media platforms. Remember that this can give you an idea of the list price, but buyers are free to offer you less.
Empire Flippers will help you to negotiate offers and counteroffers. Once you accept an offer, they can also help you navigate the creation of a financing plan with your buyer.
Flippa is often the first place people turn when they are looking to sell their business. Thousands of sellers list their businesses through Flippa’s marketplace to find an interested buyer. They are always acquiring new businesses so prospective buyers return frequently to peruse the offerings.
Like many of the popular brokers, Flippa offers a free valuation tool that can help you decide what to list your business for. Their algorithm takes a closer look at your historical performance as well as the type of business you run.
This tool is meant to be used as a guide, but you are free to set your own list price if you so desire.
They do charge a one-time listing fee for posting your Amazon FBA business. For established websites and online businesses, you can expect to pay just $49.
Many sellers, eager to sell their business quickly, will also want to opt for their marketing tools. You can boost your visibility with different marketing packages ranging in price from $65 to $545.
Like all of the brokers, you are going to be charged a success fee when your sale closes. This price is based on the sale price of your website, not the list price. Take a look at what you can expect to pay:
- 10 percent for businesses less than $50,000
- 7.5 percent for businesses between $50,001 and $100,000
- 5 percent for businesses greater than $100,000
Buyers also have the luxury of choosing from their Due Diligence packages. Flippa charges buyers a small fee to help them verify your documents, identify risks, and spot opportunities with your business.
Quiet Light’s services are very similar to those offered through Website Properties. They specialize in selling online businesses that are valued over $25,000.
The first thing you will do is contact one of their experienced team members to help with pricing your Amazon FBA businesses. Each of their staff members has experience with building, buying, or selling an online business personally. This gives them the knowledge necessary to anticipate your questions and needs throughout the process.
If you decide to list through Quiet Light, you will be signing up to sell exclusively through their platform. You will not be able to list it with any of the other brokers on this guide.
One of the main benefits of listing through Quiet Light is that they handle all of the details of the transaction for you. They help to field buyer questions, help you navigate accepting an offer, place money in escrow, and walk you all the way through the sale.
A sale can take anywhere from one to five months.
A successful sale signals Quiet Light to take their commission. For all businesses valued over $7 million, you will pay 3 percent of the sale price. Each range lower than $7 million incurs a one percent commission fee increase. The commission caps out at 10 percent for all businesses valued under $1 million.
Amazon FBA businesses with values over $25,000 may want to consider listing with full-service brokers like Website Properties. They have a high closure rate, years of experience, and thousands of prospective buyers that they market to each month.
Like other marketplaces, the best place to start is with their free valuation tool. They help to review all of the statistics of your business including income and traffic to give you an idea of the market value of your brand.
From here, their consultants create advertisements that get emailed out to their list of buyers. They may also market your business on social media and partner websites.
When someone expresses interest in your business, they can sign a non-disclosure agreement and receive your business prospectus. A consultant will handle as many of the inquiries as possible before referring buyers directly to you for more detailed information.
Before the sale is completed, Website Properties helps to walk both you and the buyer through a due diligence process. This helps to protect the buyer in the event that you were dishonest about the traffic and revenue your business produces.
Like Empire Flippers, Website Properties does not charge a listing fee. They receive payment when the sale is final based on the price of the website. Commissions could be as low as six percent.
Selling Your Business Successfully
Selling your Amazon FBA business can be quite tedious and time-consuming, but the cash-out can be rewarding. By understanding the process in advance, you can anticipate each step of the process and be better prepared.
No matter how you decide to go about selling your business, these steps will help you to receive top dollar for your hard work!
What To Do Next?
If you’re ready to sell your Amazon FBA business, we recommend getting a free business valuation. We have sold 8 online businesses over the years and one was a multi-million dollar Amazon FBA business. We used Website Properties to help us sell the business and they were able to find a buyer very fast. They helped us get a larger seven figure sum for the business. That’s one of the many reasons we highly recommend them. If you’re serious about getting the most for your business, get a free business valuation from Website Properties today.