Amazon has more than 300 million active users, and those who run an Amazon business know that selling it is a major decision because of the hard work they put into making it successful.
However, selling it can also open up new opportunities for growth and success, especially if you’re looking to move on to a new venture.
However, anyone who has been involved in sales knows that getting a deal across the finish line isn’t always as simple as it seems. It requires careful planning, effective communication, and strategic negotiation skills.
If you’re wondering how to sell an Amazon business and negotiate a good agreement, you should know that this involves many different factors.
You’re the seller and you have a lot of important tasks that must be completed to make sure that everything goes smoothly during the handover.
Luckily, there are certain tips and tricks that we share below that can help you navigate the negotiation process more easily, help you get a better deal with potential buyers, and make a profitable exit.
Define Your Exit Strategy
The first thing you need to decide is whether you want a full or partial exit as a seller.
A complete exit means that you will give control of the business to the buyer and then you’ll be done. Partial exit means that you will remain involved.
You’ll have to list all the advantages the buyer can get from your expertise and knowledge if you plan to remain involved.
Prepare to decide what you and the buyer can agree on, and if there is anything that cannot be negotiated.
Making the right decisions in good time can make it easier to negotiate Amazon sales. But you need to determine what you want out of the sale.
Many sellers choose to end their relationship and start again. If you still feel you can be of service to the brand, it shouldn’t be difficult to find a buyer.
Highlighting Growth Potential
Buyers are looking for investments that have the potential to grow. The growth potential of a business is not always in its strengths, but rather in the missing pieces that can be put together later.
You can discover what you have to offer potential buyers by identifying these missing components.
Your Amazon business, for example, may have high-performing PPC campaigns, and a strong following on social media, but no email database.
A great way to grow a quality audience outside of Amazon or search engines is to build and monetize an email list.
Is your FBA only selling in one country or region? Expanding to international Amazon marketplaces could provide a huge growth opportunity, especially if your niche and products are popular. Selling on other e-commerce sites is also an option to consider.
Provide Financial Documents
When you’re selling an Amazon business, your biggest asset is your financial statements. A clear profit-loss report is the key to success.
You should hire an accountant if you’re in doubt about all your financial records. You will have an easier time convincing the buyer to pay for your product if you are familiar with your finances and know how much money you make and spend.
Here, the idea is to ensure that the buyer understands exactly what they’ll be getting into. Negotiating a deal is difficult without a clear understanding of profitability. Buyers may not believe you when it comes to crunching the numbers.
Know Your Market
Negotiations are always a back-and-forth correspondence between the buyer and seller until they reach a mutually acceptable price.
The number of buyers entering the market with significant purchasing power has increased. The demand is so strong that buyers are competing with each other for your business.
You can negotiate more effectively if you are familiar with the market. This will help you to know what you should ask for, and how much to accept.
Understand Your SDE
You should do your best to understand how to calculate your SDE (Seller Discretionary Earnings) and present it as an asset in your negotiation strategy.
Calculating SDE isn’t nearly as difficult as it may appear. You need to be sure you’re using the correct number. Otherwise, it could have a major impact on how much your company goes for on the market.
It can be difficult to put a price tag on an Amazon business that you’ve invested time and money in. For this reason, it’s important to know your SDE and the average payment of businesses in your niche.
Finding out how much the SDE usually pays in your niche requires some research and networking with other sellers.
Selling your Amazon business can be a rollercoaster but when you are equipped with the right information, everything should run smoothly.
With the tips above you can negotiate a better deal with potential buyers and make sure that the sale is well worth the years of hard work you put into your online business.