7 Ways to Make Sure You’re Selling Your Amazon Business to The Right Buyer
If you’re selling your Amazon business, you probably want to earn big money. However, when it comes to finding a buyer for your business, bigger isn’t always better. Not everyone with money in hand is the perfect buyer for your business. As a small business owner, you need to be careful about how, when, and who you’re selling to.
Finding the right buyer is crucial for a smooth transaction, but also to ensure the continued growth of the business. Even if you work with an intermediary, it’s still important to understand the process. Without further ado, here are our 7 how to sell Amazon business tips that will help you figure out who the right buyer is.
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- Ask Yourself: Are You Ready to Sell?
Before you start looking for a buyer, there are a few important questions you should ask yourself. The first, of course, is: Is your Amazon business ready to be sold? To answer this question, you need to check whether it has all the elements that make it attractive for buyers Some of those elements include a solid profitability history, a big customer base, competitive advantage, and opportunities for growth.
The bottom line (for both you and the buyer) is what is your Amazon business’s worth? Understandably, you’re aiming for maximum value but if the asking price is too high, it could scare potential buyers away. If, on the other hand, the price is too low, you will be disadvantaged.
According to IBBA, the value of a business is determined by a number of factors like earnings, sales, market outlook, performance, net asset value, etc. Other intangible assets like the company’s brand image and industry reputation also have an impact on the value.
- Consider Working with a Broker
In order to make sure you get a reasonable and fair price for your Amazon business, you will need someone with solid negotiation power on your side. Consider hiring a broker who will be able to determine the value for your Amazon business and find the ideal buyer. An experienced broker will also help you craft a compelling narrative about your Amazon business and assist you in efficiently navigating the selling process.
If you decide to work with a broker, make sure you choose right. Approach the hiring process meticulously and ask questions like: Does the broker have your best interests in mind? Do they understand what makes your Amazon business valuable? What strategies will they use to find a buyer? If possible, ask people in your professional network for references.
- Make Sure You Look Good for Potential Buyers
If you want to find the right buyer, you need to be able to show that your Amazon business is in good shape. It is not only about the numbers but about making a good first impression. Here’s what you should pay attention to:
- Make sure your books are in order, have in hand balance sheets, tax returns, as well as profit and loss statements. If possible, also include projections for future earnings.
- Prepare a list of your products and dispose of unsalable items.
- Prepare a selling memorandum that informs the potential buyers about the key elements of your Amazon business.
- Provide an overview of the industry and explain why you’re selling your business.
- Where to Look for Potential Buyers
If your Amazon business is well known, you probably won’t have to look for buyers. However, if this is not the case, you’ll need to try several different tactics in order to reach potential buyers. Consider using anything from trade publications to newspaper advertising.
Bear in mind that brokers have access to a network of potential buyers and can approach the interested parties with confidence.
- Look for Prequalified Buyers
If you have received a tempting offer, don’t rush to celebrate. The first thing you need to do is confirm that the buyer actually has the money or at least enough credit to borrow it.
Documents like financial background and confidentiality agreements are also part of the standard documentation for potential buyers. If you’re working with a broker, they can pre-screen prospective buyers to ensure that they’re financially qualified to buy your business. This includes funds to invest, reviewing ownership, financing sources, any bankruptcies filed, etc.
In addition, you should look for buyers who have the required management skills and knowledge to take the business to the next level.
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- Consider Your Successor
In some cases, you don’t have to look for the perfect buyer too far away. If a current manager or family member wants to take over, create a training plan that will help you prepare your successor.
Whoever is taking over your company will want a healthy business. If you manage to instill more confidence in the health of your business, you will also be able to set a higher asking price. To maximize the profit, ensure that any employees you have are educated on the skill sets they will need for the following 3-5 years.
- Closing the Deal
On average, it takes about 9 to 12 months to sell a business. Once a buyer makes you an offer you might accept, reject it, or make a counteroffer.
In the context of a sale of a business, the closing of the deal is the point at which all necessary documents are signed by the parties, apportionment of expenses is done, money is exchanged, and the buyer becomes the new owner.
Matching the right business with the right buyer isn’t easy. However, the more prepared you are, the more successful the outcome will be. These 7 tips will help you find the perfect buyer for your Amazon business and maximize your profit.