Amazon FBA Businesses for Sale
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Crown Jewel Amazon FBA Asset | $3.3M TTM SDE | 146% YOY Growth + Significant Potential Growth Opps
Revenue: $16,973,677
Income: $3,340,187
Amazon FBA
Inc 500 Nutritional Supplements Ecommerce Business – 134% YoY Growth
Revenue: $18,209,404
Income: $4,673,513
Amazon FBA
Category-Leading Amazon Home & Office Products Brand w/ $10m+ Revenue and 30,000+ Reviews
Revenue: $10,721,750
Income: $2,738,548
Amazon FBA
Evergreen Socks Business | 64% FBA and 25% National Retail Stores Sales | 50% TTM Growth
Revenue: $5,598,331
Income: $1,092,811
Amazon FBA
8-Year-Old Electronics Business | $4.7M+ Revenue | YoY Revenue Up 4.33% | Seven Brand Registries
Revenue: $4,751,741
Income: $1,366,848
Amazon FBA
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Email:Category-Leading Giftable Poster Amazon Brand w/ Huge 122% Revenue Growth and 41% SDE Margin
Revenue: $3,222,830
Income: $1,333,537
Amazon FBA
5-Year-Old FBA Business in Collectibles Space | Huge Growth Opportunities | $1.02M TTM SDE
Revenue: $3,372,243
Income: $1,023,239
Amazon FBA
Reputable Niche Skincare Brand | 37% YOY SDE Growth | Diversified Revenue
Revenue: $4,234,004
Income: $1,040,771
Amazon FBA
SBA Pre-Qualified | 11-Yr-Old Amazon FBA | Eyewear | 37,000 4.4-Star Reviews | Positive YOY Trends
Revenue: $6,034,765
Income: $1,188,075
Amazon FBA
Amazon FBA Sleepwear & Socks Brand w/ $4m+ Revenue
Revenue: $5,004,444
Income: $1,028,519
Amazon FBA
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Email:Comfort Tac 85% YOY Growth – Low Workload FBA Business: SBA Eligible
Revenue: $2,450,023
Income: $777,797
Amazon FBA
4 Year Old Amazon FBA Business In Kids Outdoor Sporting Category w/30% Net Margins
Revenue: $2,728,120
Income: $798,704
Amazon FBA
FBA Business in Girl’s Toy Niche. 76% Earnings Growth, Excellent Ratings, Enormous Upside
Revenue: $2,828,644
Income: $770,129
Amazon FBA
Leading Evergreen Children’s Toys Brand with 90% Revenue Growth
Revenue: $2,491,388
Income: $662,707
Amazon FBA
6+ Year Old Amazon FBA Business In The Bicycle Accessory Niche
Revenue: $2,173,254
Income: $578,875
Amazon FBA
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Email:10-Year-Old FBA Candy Business | 25-35% SDE Margins | Strong Supplier Relationships
Revenue: $3,968,985
Income: $876,060
Amazon FBA
Category-Leading Patented Vegan FBA Brand | 30% SDE Margin | 60% YoY Growth | 12,000+ Reviews
Revenue: $1,997,598
Income: $607,574
Amazon FBA
7 Year Old Amazon FBA Business Selling Lawn Tools w/37% Net Margins & Steady 3 Year Growth
Revenue: $1,695,058
Income: $633,358
Amazon FBA
SBA Pre-Qualified 19-Year-Old Automotive Parts Brand | Diversified Revenue | 5% YoY SDE Growth
Revenue: $5,716,461
Income: $615,594
Amazon FBA
SBA Pre-Qualified | 3-Year-Old FBA Cleaning Products Biz | $451k SDE
Revenue: $1,416,262
Income: $451,463
Amazon FBA
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Email:3 Yr Old FBA Private Label Biz, Home/Garden – $511K SDE, 3.75X – 228% YoY Rev & 531% YoY SDE Growth
Revenue: $1,991,173
Income: $511,295
Amazon FBA
7-Yr Outdoor Gear Biz, Patents Pending, Boopos $900K Financing, 326% Rev. Growth, 100% Pos. Feedback
Revenue: $1,597,554
Income: $423,366
Amazon FBA
14 SKU Amazon FBA Business Covering Multiple Niches With Low Workload
Revenue: $1,927,518
Income: $529,593
Amazon FBA
6 Yr Old Amazon FBA Brand, 129% YOY SDE Growth, Highly Defensible with 15000+Reviews (Avg 4.7 Stars)
Revenue: $2,688,542
Income: $411,723
Amazon FBA
Modern Furniture FBA Brand | $1.7M Revenue + $432K SDE | $246 AOV
Revenue: $1,738,885
Income: $432,058
Amazon FBA
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Email:8 Yr Old Reputable Amazon FBA Pet Brand | 70% YoY Revenue Growth | High Net Margins
Revenue: $1,335,231
Income: $407,595
Amazon FBA
Very Passive eCommerce Business Sells Cools Maps and Related Travel Products
Revenue: $1,124,266
Income: $371,105
Amazon FBA
Established Home & Kitchen Amazon FBA Business with 50% YOY Growth
Revenue: $2,070,803
Income: $395,013
Amazon FBA
Amazon FBA Biz Selling Premium Map, Puzzle, & Poker Mats | Strong Reviews | Easy Transfer
Revenue: $1,751,922
Income: $307,199
Amazon FBA
SBA Qualified FBA Wellness Business: 45% YoY Rev. Growth |29% Net Margins | 40% Subscription Rev.
Revenue: $925,620
Income: $269,761
Amazon FBA
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Email:FBA Hair Loss Treatment Brands w/ 40% Monthly Subscription Revenue & 70% YoY Earnings Growth
Revenue: $1,832,226
Income: $418,368
Amazon FBA
5-Year-Old FBA Automotive Accessory Product w/ Multiple Stockouts in TTM
Revenue: $1,050,029
Income: $245,244
Amazon FBA
SBA Pre-Qual – 3-Year-Old Amazon FBA Arts and Crafts Business with 8,400 Reviews and 4.7 Star Rating
Revenue: $1,404,724
Income: $273,980
Amazon FBA
Amazon FBA Pet Supplements Business w/ 40% YoY Growth
Revenue: $1,219,707
Income: $283,908
Amazon FBA
Amazon FBA Novelty Gift | 85% Gross Margins | 4K+ Reviews | Marketing Needed
Revenue: $647,496
Income: $333,500
Amazon FBA
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Email:Amazon Skincare Line | High Margins | Unique Formulations
Revenue: $1,450,442
Income: $382,584
Amazon FBA
Amazon FBA Artificial Plants Brand with Triple Digit Growth
Revenue: $933,229
Income: $257,325
Amazon FBA
Amazon FBA Kitchen & Bathroom Business w/ 260% YOY Growth
Revenue: $1,136,216
Income: $306,733
Amazon FBA
Baby Products Amazon FBA Business w/ 60% YoY Growth and 4,000+ Reviews
Revenue: $743,330
Income: $203,434
Amazon FBA
SBA Pre-Qualified Amazon FBA Outdoor Brand | 6 Years Old | $200k SDE
Revenue: $576,538
Income: $200,967
Amazon FBA
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Email:Amazon FBA Thank You Card Business w/ Impressive Growth and 5 Star Average Reviews
Revenue: $1,079,028
Income: $242,262
Amazon FBA
SBA Pre-Qualified | 6 Yr Old Unique Baby and Toddler Sleepwear Brand | $173K SDE | Low Workload
Revenue: $736,281
Income: $173,396
Amazon FBA
5-Year-Old Pet Brand with Consumable Products Sold Through FBA and Chewy
Revenue: $997,051
Income: $197,554
Amazon FBA
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Email:Amazon FBA Animal Conservation | 17% TTM Revenue Growth | Passionate and Unique Niche | 10+ Yrs Old
Revenue: $539,220
Income: $209,527
Amazon FBA
50/50 Amazon FBA & Walmart Reseller, Well Known Apparel Brands, 77% YOY SDE Growth
Revenue: $1,057,601
Income: $272,324
Amazon FBA
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Email:Amazon FBA Traditional Gold Jewelry | Highly Automated | 92% YTD SDE Growth
Revenue: $1,191,674
Income: $181,423
Amazon FBA
Passive Amazon FBA Business with Over 300% YOY SDE Growth
Revenue: $2,742,990
Income: $249,507
Amazon FBA
SBA Pre-Qualified: Premium, 9-Year, Home-Barista Coffee Gear | Amazon FBA | Earnings +98.95%
Revenue: $1,036,406
Income: $184,993
Amazon FBA
Category-Leading Amazon FBA Home Decor Business
Revenue: $1,024,867
Income: $191,967
Amazon FBA
Reduce Kids’ Screentime! Proprietary Product Line on Amazon with 72% YoY Growth – Lender Preappoved!
Revenue: $566,966
Income: $191,359
Amazon FBA
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Email:Growing FBA Premium, Organic Superfoods and Supplements Business, High Margins, Diversified Revenue
Revenue: $306,334
Income: $170,930
Amazon FBA
Amazon UK and US FBA Gift Business | Motivated Seller | High Growth | Low Ad Spend
Revenue: $1,342,759
Income: $289,734
Amazon FBA
Amazon FBA UK/USA Outdoor Brand w/200% YOY Revenue Growth
Revenue: $964,790
Income: $183,908
Amazon FBA
408% YOY SDE Growth, Top Ranked Amazon’s Choice FBA Amazon Business
Revenue: $806,632
Income: $162,126
Amazon FBA
10-Year-Old Amazon FBA UV Detection Sticker Brand | Utility Patent | 39% Net Margins
Revenue: $624,958
Income: $240,521
Amazon FBA
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Email:Amazon FBA Kitchen Brand | 80% Gross Margins | 1.99x Multiple | Cash Buyers Only
Revenue: $1,351,070
Income: $237,105
Amazon FBA
4-Year-Old FBA Business | 3,700+ reviews with 2 SKUs | $430K in Revenue with $155K in SDE
Revenue: $437,041
Income: $155,293
Amazon FBA
3+ Year Old Health and Wellness Brand with Influential Promoters
Revenue: $558,361
Income: $164,256
Amazon FBA
2-Year Old Amazon FBA Wooden Docking Station | 1K+ Reviews | 4.7 Star Ratings | Proven Demand
Revenue: $628,609
Income: $174,793
Amazon FBA
4 Year Old Party Access. Biz | +46% YoY Rev | Brand Registered | Owner Financing
Revenue: $1,479,264
Income: $167,420
Amazon FBA
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Email:SBA-Pre Qualified – 25 Year Old eCommerce and FBA Exotic Pet Brand | High Growth Opportunities
Revenue: $597,108
Income: $135,775
Amazon FBA
Diversified Pet Supplement Business w/Strong Growth and USA Supplier
Revenue: $313,605
Income: $92,119
Amazon FBA
Amazon FBA Brand – Patented Products in Maternity and Wellness Niche with Growing YOY SDE
Revenue: $454,513
Income: $141,417
Amazon FBA
Sports & Outdoor FBA Reseller | Wholesale Blueprint Scale Opp | TTM $1.8M Revenue – $274K SDE | 1.5X
Revenue: $1,790,461
Income: $274,984
Amazon FBA
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Email:10-Year-Old FBA Home Goods Business | 9K+ Reviews | 4.5 Star Ratings
Revenue: $440,425
Income: $114,950
Amazon FBA
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Email:Amazon FBA Outdoor Brand | Solid Margins | 2,400 Reviews | 3 SKUs | Product Expansion Potential
Revenue: $986,378
Income: $157,401
Amazon FBA
Amazon FBA Bathroom & Beauty Brand with 40%+ SDE Margins
Revenue: $361,072
Income: $145,325
Amazon FBA
Eyewear Accessory Amazon FBA Brand With 78% TTM SDE Growth
Revenue: $370,871
Income: $133,792
Amazon FBA
75% Finaceable | $120k+ TTM SDE | Amazon FBA Kitchen Products | 41% TTM Revenue Growth
Revenue: $426,329
Income: $122,404
Amazon FBA
Amazon FBA Kitchen & Dining | Solid Growth | 78% Gross Margins | 8,500+ Reviews
Revenue: $1,287,242
Income: $127,774
Amazon FBA
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Email:17 Year Old Online Candy Business
Revenue: $1,020,538
Income: $133,023
Amazon FBA
2-Year Old FBA Home Decor Business | 269% YOY Rev Growth | Huge Untapped Potential
Revenue: $456,561
Income: $108,261
Amazon FBA
13-Year-Old Pet Vertical eCom Business with Patents + Large Growth Opps | $106K SDE
Revenue: $253,055
Income: $106,194
Amazon FBA
Motivated to Sell | 1.95x Multiple | High TTM Rev/SDE Growth | Amazon FBA Bags | 80%+ Gross Margins
Revenue: $650,842
Income: $164,814
Amazon FBA
SBA Qualified Growing Baby Products Brand | Amazon FBA and Shopify | Established Team | US Supplier
Revenue: $853,954
Income: $98,242
Amazon FBA
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Email:Fast-Growing Amazon FBA Business with 3 SKU’s + Built-In Growth
Revenue: $553,390
Income: $102,452
Amazon FBA
Fun Amazon Business | 45% Net Profit Margin | Simple Operations | Untapped Growth Potential
Revenue: $257,631
Income: $117,152
Amazon FBA
3-Year-Old FBA Home Decor Brand | 5 SKUs + 5 New SKUs Launched | $105k SDE
Revenue: $372,667
Income: $105,286
Amazon FBA
10-Year-Old Baby FBA Brand | 5,000+ Reviews | 4.8 Star Rating | Low Owner Workload
Revenue: $526,094
Income: $103,631
Amazon FBA
Brand Registered FBA Resale Biz | +47% YoY Rev. | Recurr Rev. – Subscribe & Save
Revenue: $1,250,218
Income: $198,426
Amazon FBA
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Email:Turnaround Opportunity in the Pet Niche | Amazon FBA | 2.1x Multiple
Revenue: $661,211
Income: $112,559
Amazon FBA
Amazon FBA Biz w/ Differentiated Hero ASIN | Growth Potential w/ More Involved Owner | Great Reviews
Revenue: $316,968
Income: $72,270
Amazon FBA
Quick Sale Opportunity | 8-Year Old Tea and Herbal Wellness Biz | 915k TTM Revenue
Revenue: $915,188
Income: $107,264
Amazon FBA
3 Year Old Kids and Adults Supplement Brand With 267% YOY SDE Increase
Revenue: $234,084
Income: $87,022
Amazon FBA
Amazon FBA Pet Supplement Brand – Low Workload
Revenue: $242,964
Income: $82,133
Amazon FBA
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Email:Amazon FBA Business Selling a Medical (Aesthetic) Product
Revenue: $343,716
Income: $78,272
Amazon FBA
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Email:Price Reduced | 17-Year-Old Patented Organization Business | 4,000+ Reviews
Revenue: $1,010,164
Income: $80,335
Amazon FBA
5 yr Old Pool Access. Biz | 95% Amazon FBA | YOY Revenue +102% | COGS Decrease
Revenue: $263,838
Income: $66,769
Amazon FBA
Sporting Goods FBA Reseller | $1M Revenue + $118K SDE | 1.5x Multiple
Revenue: $1,002,928
Income: $118,899
Amazon FBA
Passive Amazon FBA Goal Planner Business | 12% TTM Revenue Growth with Little Work and No Ad Spend
Revenue: $109,415
Income: $46,385
Amazon FBA
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Email:Growing Amazon Luxury Travel Bags Brand | Low Workload | 1.7x Multiple | Motivated to Sell
Revenue: $587,486
Income: $87,774
Amazon FBA
4 Year Old Cosmetics FBA Amazon Business With Low 2 Hour Per Week Workload
Revenue: $257,593
Income: $54,780
Amazon FBA
Ring Guards FBA Business | 89% Gross Profit Margin | Strong SDE Growth
Revenue: $231,512
Income: $62,539
Amazon FBA
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Email:Baby Products Amazon FBA | 119% TTM Revenue Growth with Little Work
Revenue: $143,036
Income: $41,283
Amazon FBA
2-Year-Old FBA Business in Kitchen Apparel and Accessories | $52k in SDE
Revenue: $233,113
Income: $52,677
Amazon FBA
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Email:Easy to Operate 3-SKU FBA Business with Untapped Potential
Revenue: $137,125
Income: $40,745
Amazon FBA
Four Year Old FBA Business in Yoga Niche
Revenue: $285,136
Income: $32,975
Amazon FBA
Distressed Amazon FBA Haircare Business | Loyal Customer Base | Additional Ready-to-Launch Products
Revenue: $189,686
Income: $83,341
Amazon FBA
Quick Sale: Custom Coloring Pencil Sets | $175K Rev | Custom Machine | USA Supply Chain
Revenue: $175,690
Income: $2,219
Amazon FBA
FBA Watercraft & Sports/Outdoor Accessories Brand | 1,200+ Reviews | 4.7 Average Star Ratings
Revenue: $184,056
Income: $23,356
Amazon FBA
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Email:Quick Sale Opportunity | Unique Products & Great Reviews | FBA Biz
Revenue: $131,769
Income: $20,334
Amazon FBA
5 Year Old 1 SKU Amazon FBA Business With 500+ Reviews (Avg 4.6 Star Rating)
Revenue: $55,948
Income: $6,556
Amazon FBA
Amazon FBA Businesses for Sale: Find Your Next Opportunity
There are numerous benefits to buying an Amazon business. Not only can FBA businesses generate an impressive ROI, but they also can be managed from anywhere.
While buying an Amazon business can be a great investment decision, it’s important to do your homework before making an offer. This article will cover everything you need to know about purchasing an FBA business so you can make the best possible investment decision.
Let’s start with the most common question: how much do FBA businesses cost?
Current Going Rate for an Amazon Business
There is an enormous range when it comes to valuing existing Amazon businesses. You can buy one for $100,000 or $30 million. It just depends on the size and desirability of the business in question.
If you want to check out real FBA businesses that are currently listed for sale, head over to our listings page.
Looking through our listings will give you an idea of how much various businesses cost. However, it won’t necessarily tell you how the asking prices are determined…
To learn what makes an FBA business valuable, it’s important to first understand how the valuation process works. Once you understand the valuation process, you’ll have a clear idea of the type of FBA business your budget will accommodate.
How to Value an Amazon FBA Business
Like most online businesses, Amazon businesses are valued using the SDE multiple method.
The SDE multiple method determines the value of a business by multiplying the Seller’s Discretionary Earnings (SDE) by a number known as the multiple.
“Like most online businesses, Amazon businesses are valued using the SDE multiple method.”
Understanding Seller’s Discretionary Earnings
Seller’s Discretionary Earnings are the pre-tax, pre-interest profits before accounting for one owner’s benefits, non-cash expenses, one-time investments, and non-related income of discretionary expenses. Basically, SDE is the money that the owner “really” makes by operating the business.
What is a “Multiple” in Business Valuation?
The multiple is a number that the SDE is multiplied by to determine its value. For example, if an Amazon FBA business has $200,000 in SDE and a multiple of 3X, the business will be valued at $600,000 (3 X $200,000 = $600,000).
For most Amazon businesses the multiple is 2-5X, but it can certainly be above or below that range. Four primary factors determine the multiple:
- Growth
- Risk
- Documentation
- Transferability
Growth
If an Amazon FBA business is growing rapidly, it indicates that the business is doing well and will likely generate higher earnings in the future. Therefore, all else being equal, businesses with high growth rates will cost more to acquire than those that are stagnant or declining.
“All else being equal, businesses with high growth rates will cost more to acquire than those that are stagnant or declining.”
In evaluating growth, both short-term and long-term growth trends are important.
Risk
Just as growth increases a business’s value, risk decreases it.
There are several factors that can create risks in Amazon businesses, including:
- Market trends
- Competition
- Age of business
- Lack of revenue diversification
If the overall market in which a business operates is trending downward, that might be alarming from an investment perspective. Similarly, if an FBA business is having a hard time winning the buy box, you should certainly be wary as a buyer.
Businesses that are less than 24 months old or have only one or two products that generate most of the revenue are also riskier. As such, they generally cost less to acquire.
Documentation
Businesses with detailed documentation practices are more valuable than those with poor records. If an Amazon FBA seller is unable to provide detailed reports for each FBA fee and other key expenses, how can you truly understand the state of the business?
“Businesses with detailed documentation practices are more valuable than those with poor records.”
Transferability
Businesses that can easily be transferred to a new owner are more valuable than those that have transferability barriers.
If an Amazon business has clear Standard Operating Procedures (SOPs), it will be a lot easier for you, as the buyer, to understand the processes of business operations. Therefore, you should expect to pay a higher multiple for an FBA business that is well organized.
Buy an Amazon Business – Pros and Cons
Like every investment opportunity, there are both pros and cons of buying an Amazon FBA business. Let’s start with the pros.
Pros of investing in FBA businesses include:
- Proven business model
- Potential for automation
- High growth potential
- Highly transferable
Cons of investing in FBA businesses include:
- Can be capital intensive
- Potential instability
- Platform risk
Proven Business Model
The path of the Amazon business owner is well paved and proven to work.
There was a time when Amazon businesses were thought of as risky and uncertain. Back in the “early days,” sellers feared that the FBA model was a short-term fad. Many thought the opportunities would disappear as quickly as they emerged.
A lot of things have changed on Amazon, but for established FBA businesses, the potential is as promising as ever. With consistent growth and unparalleled logistics systems, the platform isn’t going anywhere soon. And since Amazon relies heavily on individual sellers to fulfill customer demand, the company welcomes FBA businesses that provide true value.
Automation Potential
Amazon businesses have enormous automation potential. Through effective structuring, most FBA businesses can provide passive income for the owner.
There are two primary elements that enable FBA business automation:
- Amazon’s fulfillment capabilities
- Agency and contractor support
As every seller knows, Amazon can handle many of the key tasks involved in selling your business’s products. FBA can receive and store inventory from Amazon’s warehouse, fulfill orders, and process returns. Essentially, with FBA, you never need to touch your own products.
For all of the other responsibilities, there are agencies and contractors that can help.
Because the Amazon business model is so well established, there are numerous resources to support sellers. In fact, it’s not hard to find an Amazon agency that can manage just about every aspect of your Amazon FBA business, including:
- Product research and development
- Listing creation and management
- Customer service
- Accounting and financial management
- Strategy and implementation
Of course, these services cost money, but they can be worth every penny in the right situation.
Growth Potential
With consistent and reliable platform growth, Amazon business models are ripe with opportunity. If you follow the right framework, there’s a good chance your Amazon business has a long runway of growth ahead.
One of the most obvious growth strategies is to launch new products in the same or adjacent markets. If your business sells dinner plates and cutlery, why not add glasses or mugs to your Amazon store?
Additionally, a lot of sellers seek to grow the success of their existing products. If you’re currently selling to individual Amazon shoppers, perhaps try targeting business customers. If you’re relying on organic traffic, maybe experiment with different forms of paid advertising. And if you’re selling single items, try including multiple items in each unit and offer a quantity discount.
The bottom line is that there are numerous ways to grow an established Amazon FBA business.
Transferability
Generally, Amazon businesses can be easily transferred to a new owner. As a buyer, this means there shouldn’t be excessive headaches involved in the buying process.
There are a few key steps involved in transferring an FBA business from one owner to the next. Assets that must be transferred include:
- Seller Central account
- Supplier relationships and contracts
- Contractor relationships and agreements
- Trademarks and patents
- Software accounts
- All documentation
“Generally, Amazon businesses can be easily transferred to a new owner.”
FBA brands typically don’t involve the transfer challenges that some other businesses experience.
During the transfer process, the seller provides the buyer with the Amazon Vendor Central account, software accounts, and all trademark and patent rights. They also introduce the buyer to all contractors and suppliers. Often, agreements with these parties must be transferred as well.
Amazon Businesses Can Be Capital Intensive
To make money on Amazon, you first need to invest money in inventory and advertising. This is true whether you’re producing products yourself or engaging in retail arbitrage.
Once you’re generating sales, you then need to reinvest a portion of your revenue. Often, the reinvestment is substantial, especially if you’re seeking to grow your business.
If an FBA business has healthy margins and is stable, its revenue can often fund its continued growth. However, growth can sometimes require further capital investment.
Capital requirements can vary from business to business. Therefore, it’s important to consider this element when determining your acquisition plan.
Potential Instability
Like all businesses, Amazon businesses can experience instability. However, the level of instability can vary greatly from business to business.
A few elements that can contribute to instability include:
- Poor product mix
- Slim margins
- Supply chain disruptions
- Competitive threats
If an FBA business sells only two products, it’s exposed to considerable risk. If one of those products goes down the entire business will be threatened. Therefore, smart buyers often look for FBA brands that have many products, not just a few.
Small margins can also create risk and instability. If the business runs on a 10% margin and its advertising increases by 11%, the business may collapse. The same is true for changes in shipping cost. Healthy margins ensure that the business can fend off various challenges.
Supply chain disruptions are a common threat. However, they can often be avoided by establishing backup suppliers who can step in if required.
Competition is another element that can threaten some businesses.
While all of these can create instability, they can also be mitigated through thoughtful research and planning. We’ll discuss ways to minimize instability in the sections below.
Platform Risk
At one time, buyers were skeptical about businesses that only had a presence on Amazon.
They feared that the platform wasn’t stable. The idea was that either Amazon would go downhill, or it might randomly ban the business’s seller account.
Today, the perceived platform risk is much less relevant for most buyers. They’ve learned that Amazon isn’t just a fad, but a stable platform with consistent growth. They’ve also realized that account suspensions aren’t random, and most account issues can be effectively addressed. However, there are still buyers who are wary of businesses that rely heavily on FBA.
What to Look for When Buying an Amazon Business
You’re convinced that buying an Amazon business is a wise investment. Now, it’s time to understand what to look for in your search for the perfect FBA brand.
There are several key elements to look for when looking for potential FBA business acquisitions. These include:
- Age of the business
- Revenue and SDE trends
- Market trends
- Number of products
- Profit mix
- Supply chain stability
- Documentation
- Defensibility
- Barriers to transferability
Let’s dive into each of these a little deeper.
Age of Business
Older businesses are generally more stable than young ones.
Having a long track record of consistent growth indicates that the business is sustainable. Without such data, it’s impossible to know whether or not the business really has a winning strategy.
As a “rule of thumb,” most buyers look for at least 24 months of solid sales history. Of course, more is generally better.
“Most buyers look for at least 24 months of solid sales history.”
Revenue and SDE Trends
Most buyers are drawn to businesses with positive revenue and Seller’s Discretionary Earnings (SDE) trends. Although you’ll likely pay more, you’ll also enjoy the privileges that growth offers.
In addition to looking for growth, it’s important to pay attention to where that growth is coming from. Look for FBA businesses that are successfully capitalizing on long-term market growth trends.
Market Trends
Amazon business trends are often largely dependent on the overall markets they serve. Therefore, it’s always a good idea to look for FBA businesses in markets with steady growth.
It’s important to note that short-term bumps in the market are not what you should look for. Instead, focus on longer-term trends that you expect to continue. In other words, don’t confuse a fad for a long-term trend.
Product Mix
Generally, it’s not wise to buy an Amazon business with just one product listing. Rather, look for FBA brands that have a healthy product mix that includes several different successful products.
If you buy an FBA business with many products, you’re less dependent on any single Amazon listing. If one gets shut down in your Amazon seller account, you still have several others to drive revenue.
Supply Chain Stability
Look for FBA businesses that have strong relationships with suppliers. Even better, find ones that have multiple suppliers for each profitable product.
In addition, determine whether the suppliers will work with you and provide the same prices. In other words, make sure the relationships are transferable.
Documentation
As a buyer, it’s extremely frustrating when you acquire a business and then discover it’s completely disorganized. Don’t wait until closing to discover the previous owner’s documentation practices.
Make sure to examine all of the owner’s records before you buy. Be certain that there are clear Standard Operating Procedures in place so you know how tasks are handled. Once you’re in charge, it’s important that you understand how everything works.
Defensibility
It is essential to buy a business that is well-positioned and able to handle the competition.
If an FBA business is selling cheap wholesale products, be wary. What happens when another third-party seller sources the exact same product idea and sells it for half the price?
If anyone can invest a $5,000 startup cost and compete with you, that’s a red flag.
Make sure to find FBA brands that can defend their position in the Amazon marketplace. In order words, look for businesses that have:
- Expensive products
- Unique products
- Patents
- Trademarks
- Customer loyalty
- Amazon reviews
Barriers to Transferability
Most fulfillment by Amazon businesses can be fairly easy to transfer from one owner to the next. However, it’s still important to do your research and make sure no unexpected issues arise.
How to Know Whether You Should Buy an Amazon Business
Several factors go into determining whether or not you should acquire an Amazon business. For most investors, these include:
- Risk tolerance
- Interests
- Skillset
- Goals
Risk Tolerance
If you’re looking for a completely stable investment akin to a Fortune 500 Index Fund, look elsewhere.
Although many FBA businesses are highly stable by “businesses’ standards”, they still don’t match the predictability of a well-diversified stock portfolio. However, the returns can often be much higher.
Interests
Most FBA sellers have a genuine interest in the process of building online businesses. Unless you’re going to outsource all management responsibilities, it’s important that you enjoy the operations of owning a business.
For those who prefer other business models, there are numerous to choose from, including dropshipping. Running a business will always be work, but it can also be fun.
Skillset
It’s important to know what your skills are as a business owner. If some of your abilities can be applied to manage and grow an FBA business, then perhaps it’s a wise investment.
Before buying a business, break down what strengths and strategies you can bring to the table.
There is no one skill that is important for succeeding on Amazon. Rather, there are a variety of skills that can all lead to a successful business. Design, financial management, product development, and human resource management are all areas of expertise that help you as an FBA business owner.
What Are Your Goals?
Lastly, it’s critical that you decide what your goals are before diving in and signing on offer. If you’re seeking location independence, high ROI potential, and a stimulating endeavor, then buying an FBA business might be right for you.
Amazon Businesses For Sale – FAQs
When you want to buy an Amazon FBA business, you may find the process to be complex and daunting. Below you will find answers to commonly asked questions. Please get in touch with us if you have any additional questions.
Is buying an Amazon business from Quiet Light safe and secure?
The answer is yes, and here is why: All businesses available for purchase through Quiet Light have passed through a strict vetting process. In fact, we only agree to sell about 10% of the businesses that contact us. Additionally, Quiet Light requires every party who works on a deal to sign a confidentiality agreement. If a transaction is particularly sensitive, additional screening measures are required.
“All businesses available for purchase through Quiet Light have passed through a strict vetting process.”
What do I need to know before I buy an Amazon business?
There are many things you need to know before buying an Amazon business. For starters, it is important to understand the monthly revenue and expenses. Additionally, we recommend assessing how the business will fit into your life.
How much does it cost to buy an Amazon business?
Amazon businesses are available in many different shapes and sizes. The prices can vary widely. The asking price is determined by multiplying the business’s Discretionary Earnings x Some Multiple.
Contact Us About Buying an Amazon Business
Quiet Light is a trusted leader in the emerging niche of buying and selling profitable online businesses. To buy an Amazon FBA business, reach out to us at [email protected] or (800) 746-5034.