Build your House
When you sell your Amazon practice, you’re selling a number
of valuable assets. You’re selling your product sources,
vendor accounts, and shipping rates from years of orders.
Even more importantly, you’re selling an order history on
Amazon spanning tens of thousands of orders as well as all
the ratings, feedback, and buy-box privileges that took you
years to build. Once you recognize the valuable points of
your business, you can begin to understand how to properly
present these assets for your potential buyers.
Perhaps the simplest place to start is your product sources. Whether you sell your own manufactured items, private-label imports, drop-shipper virtual inventory, or a combination of the three; securing reliable and competitive sources of inventory is key not only to growing your business, but to making it appealing to a potential investor or purchaser. You need to have sufficient supplies of high-demand items while allowing for a vast enough variety to remain competitive with low-demand products. Most importantly, you will also need to rely on contracts and business history with your suppliers to ensure that these relationships will carry over to the new owner in order to retain this value for sale considerations.
Attaining the right balance of product variety and fresh,
new inventory can be difficult to do on your own, which is
why it may be helpful to seek out professional guidance from
services such as our very own ClearPath and ProductBridge to
build out your item sources quickly and with little to no
risk. However you do this, your offered inventory will form
the foundation of your business, ultimately determining the
basic impression that your practice makes on potential buyers.
Big Store, Little Footprint
Once you have built a healthy product offering and begun to receive orders, you will want to begin to grow your sales, diligently designing and documenting your business processes to build them into another asset for sale. In the case of outside services, such as our own ClearPath, these processes, informed by years of direct marketplace experience, are already in place and well-documented, eliminating this from your workload. Otherwise, you would have to build your own processes based off of your experiences as you navigate the marketplace, all while maintaining stellar customer metrics in order to win the buy-box and avoid store suspension or termination due to violation of the strict and ever-changing standards of Amazon.
Because margins and profit will drive a significant part of
the pricing of your store, another important facet to manage
while you grow will be your overhead. Services such as our
own OrderBridge allow for a US-based virtual staff, and
advanced automation permits expansion from dozens to
thousands of orders a day with a minimal increase in
required staff, mostly needed only for customer support.
Bear in mind that one of the key factors in a successful
sale will be the current and future outlook of your store
and potential for growth under the leadership of the new
owner; if you are unable to scale further than your current
level, then there is little incentive for someone new to
take ownership of your business.
On the Books
As with any large transaction, you will want to have
meticulously-kept, thorough records on an individual order
level, preferably extending back to the start of your
business. While it may be tempting to keep costs down by
relying on paper records or organizing accounting books by
yourself, it becomes apparent to most that in the later
years of operation, it becomes more expensive to reorganize
and recover records from years prior than it would have been
to properly organize records electronically from the very
This is where, unless you already have an accounting professional in your organization, you will almost certainly want to invest in a service or product that is backed with the knowledge and power to handle all your daily transactions and store them for the entire life of your store if necessary. OmniBridge is one such solution that incorporates cradle-to-grave accounting, from inventory purchases and shipping costs, to returns and special-case order fulfillment. In addition, ClearPath provides highly relevant and organized financial reporting, so that you can review your data in a pre-organized view from per-SKU profitability to return cost changes year by year. These views can even be prepared into reports to be delivered on-demand to potential purchasers in a simple, easy-to-read package to speed negotiations and improve your offering.
Use an Agent
You wouldn't generally buy or sell a house without a realtor, why would you do the same with a multimillion-dollar business? In addition to all the aforementioned factors that complicate offering your Amazon business for sale, you will also want to protect yourself from liability, manage a smooth transition period with the new owners, and make absolutely sure that you transfer your store within the confines of Amazon policy. For this, you need not only an experienced broker, but one well-versed in the specifics of Amazon and other online marketplaces, particularly as they pertain to the transfer of seller accounts. You want to make sure that your agent knows the necessary tax, legal, and marketplace implications of sale and can present them to both you and any prospective buyer in order to avoid painful and potentially costly headaches down the road.
A full-service product, such as ClearPath, will not only provide the necessary connections and knowledge to accomplish this, but can walk you through the entire process leading up to a sale consideration. Even if you have been running your store for years without the considerations of sale, ClearPath can walk you through the steps you can take today to place your business on track for a quick, safe, and profitable sale. And when you reach your exit point and desire to cash in on your work, we can help you arrange the entire thing, from listing to signing the final document. As far as we are aware, we are the only ones to offer a comprehensive service in this category, and while it may be entirely possible to go it alone, it is our opinion that enlisting experienced and professional advice is more than well worth the investment when it comes to helping create your business legacy.