There has never been a better time to become an Amazon merchant. And there has also never been a better time to sell your AMZ business!
Many online business owners have realized that a perfect way to get life-changing wealth from their company is to sell it once. Buying and selling eCom businesses has become popular, to the point that multiple methods exist to sell your company. You may sell it to the buyer directly, “flip” it with a specific flipper platform, list your company on a marketplace, or go through the simplest way and get your brand ready to exit using Amazon Business Brokers. If you are inexperienced in this field, you will need the help of an expert to facilitate the sale. That is where business brokers come in.
What Does an ECommerce Business Broker Do?
You may think an AMZ FBA broker will just serve as a middleman who gets some part from your proceeds when you sell your firm. However, when you don’t have any experience in selling, want to boost your profit out of the deal, or don’t have enough time to get the transaction done, you may want someone to make this process simple.
Below are the things that a business broker might do for you:
Valuation
Your potential partner should sign an NDA before requesting access to your confidential information. It will generally mean read-only access to Shopify, Seller Central, or any other platforms you utilize to earn money. They may also ask for access to your tools like Quickbooks, Xero, and Amazon accounting software.
Using the financial statistics, combined with a personal interview to find out the specifics of your company— products, fulfillment, IP, industry, marketing, etc. — and deeper research of your niche, brokers can then assess the value of your business.
Tip: If you are starting an Amazon business, estimating your profits is vital. For this, you can use a convenient AMZ FBA calculator that shows FBA fees and revenues from selling a particular ASIN in a couple of clicks.
Preparation and due diligence
In preparation for entering the market, brokers should support your company in getting the firm ready for potential clients’ due diligence procedures. It involves making that you have all the necessary information they’re likely to ask in the proper format and properly packaged.
At the same time, brokers should do their homework to spot the proper buyers!
Entering the market
The broker will prepare your sales prospectus. It’s a brochure that indicates how great your company is and highlights why it would be a fantastic acquisition.
LOIs, negotiations, and closing
Ideally, you should have a few interested buyers submitting a “Letter of Intent.” It’s a non-binding document essentially stating that they want to purchase your firm and provide their anticipated offer subject to due diligence.
Brokers should support your business in evaluating the LOIs and get you in touch with legal counsel.
Once both parties sign an LOI, you enter an exclusivity period (usually 30-45 days) whereby you guarantee not to sell the firm to others. At the same time, your potential buyer carries out the due diligence.
At the end of this period, the buyer will provide a formal offering to buy the company. With your legal counsel and broker, the deal will be examined to ensure it indicates the true value of your business, is a reasonable and fair offer, and is properly formulated to safeguard you (especially regarding any pay-out!). Then your deal is signed, money is transferred, and your company is sold!
Manage the smooth after-sales support
Your transaction won’t end at the turnover of all assets. Like any other deal, there are many procedures after the exchange when the seller and the buyers should engage until all is settled. The FBA brokers’ task here is to guarantee the effective transition from the brand to the new owner so the company can function under the new ownership.
What to Look for in Amazon FBA Business Brokers?
Learning what to search for is vital in choosing the proper business broker. Below, we have outlined three main steps you should take before making a decision.
Research the track record, credentials, and customer reviews.
You will want to check their track record by inquiring how many brands they have sold within the last year. We also recommend asking how many other projects they are currently handling to ensure they will have enough time to spare for your firm.
A crucial ratio to keep in mind is listings to sales. Simply put, how many of their deals find clients and are sold? In addition, don’t forget to check for clients’ reviews. What are other sellers saying? Are they content with the services they got? Include these aspects in your research.
Look for a business broker who is attentive to your needs and focuses on your interests.
When interviewing brokers, watch how comfortable you’re communicating with them. It’s important, as you will be discussing your goals and requirements with these people. Establishing trust is also vital, considering your partner will act on your behalf.
Right brokers will commence with an overall evaluation of your brand (both weaknesses and strengths) in addition to identifying your reasons and goals for selling. They will then come up with a marketing strategy that matches your objectives.
Find a broker with confidentiality policies and a strong sales strategy.
Do not be afraid to ask your brokers how they will promote and market your business and screen potential clients. Good brokers will gladly outline the advertising budget and sales strategy for you. If confidentiality is critical to you, inquire about steps they are ready to take to safeguard your privacy.
5 Top-Rated Amazon Business Brokers
Business brokers usually specialize in particular industries or companies of a particular size. Below we compiled a list of five top-rated AMZ business brokers. Use it as a starting point in your research.
1. Quiet Light
Launched by Mark Daoust in 2007, it’s one of the most famous eCommerce business brokerages in America, having been featured in top-notch media like Entrepreneur, Forbes, Magazine, BuzzFeed, and GoDaddy. The company has sold more than 500 businesses, with more than $100,000,000 in total transaction value.
Quiet Light does a great job of screening qualified merchants and finding ready-to-go buyers. They are also ready to work with potential merchants months and years ahead of the exit to help them obtain the best possible price. If you’re new to selling or buying a business, we recommend checking out their newsletter and podcast!
2. Fortunet
This firm is a well-known investment banking company focused on online sellers, including AMZ, SaaS, DTC, and agencies involved in the eCom world. They guide merchants from start to end and carry out all their research or setup tasks in-house to guarantee the process is consistent and smooth.
3. The FBA Broker
Another reputable company is The FBA Broker. Having been on the market since 2016, the firm has already been discussed in Inc. Magazine, AMZ Tracker, Web Retailer, AM/PM Podcast, and The Amazing Seller. Launched by Coran Woodmass, an Amazon FBA business owner himself, it’s the only company on this list that exclusively serves AMZ businesses. It tends to cooperate with many international-based merchants, although they work with merchants from anywhere.
4. Northbound Group
In just 11 years, they have sold 250,000 firms. With four global offices, it’s one of the largest online brokerage companies worldwide. In the past, they used to be concentrated on smaller transactions, but they have expanded their services and now are closing plenty of six, seven, or even eight-figure operations. They also sell domain names and create pre-revenue sites apart from operating companies.
5. Website Closers
This firm has been around since 1998, being one of the most established digital brokerage companies. Longtime business broker Ron Matheson and corporate attorney Jason Guerrettan founded Website Closers. The founders seem to concentrate on larger deals. However, they do have to make small ones as well.
A unique thing about the company is that they use a specific formula to add the inventory cost as part of the total valuation of the company. While they add some “ceiling” and “floor” caps or other adjustments, it may sometimes bring complications versus simply evaluating the stock at cost at the moment of the sale, separate from the business value.
FBA Broker: Final Thoughts
Selling your company is an intricate and life-changing decision that can be emotional. After spending time to study the business model and different operational details, carefully selecting the branding that best reflects the mission and identity of your company, and facing all the hiccups, setbacks, and surprises along the Amazon journey, it’s only normal to stay uncertain about leaving your reins to someone else. Therefore, many merchants decide to have a reliable partner by their side, a broker or a team with the proper experience, network, and skills to identify a decent successor capable of taking their business to the next level.
