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How to Sell Your Garden Supply FBA Business
By Quiet Light
If you’re like many successful Amazon sellers in the Garden and Outdoor space, you might be exploring the idea of selling your garden supply FBA business.
Whether you’re ready to move on to new business opportunities or you want to spend more leisure time in your own garden, selling your online business can be a fantastic way to help you achieve your goals.
In this article, we’ll cover everything you need to know about selling your Amazon garden supply FBA business, including:
- Reasons to consider selling your Amazon FBA business
- What you should keep in mind when pricing your FBA business for a potential sale
- How to use Amazon’s FBA calculator to increase the worth of your business
- Where to find potential buyers for your garden supply business
Reasons you might be thinking about selling your garden supply FBA business
You might be considering selling your garden supply FBA business because you’re ready to explore new business opportunities, invest your finances in another way, or be experiencing a new season of life like starting a family. Some other reasons that could capture your “why” when it comes to the sale of your business may include:
- Amazon’s expansion into gardening supplies makes your company more valuable to potential buyers
- Millennials are using their green thumbs to buy gardening supplies online, increasing demand and interest in your business
- Your growing business profit in lawn and garden products on Amazon means a sale could be highly profitable for you in today’s market
- Aggregators are searching for businesses to purchase
Amazon is expanding its footprint in gardening
Amazon has made it easier than ever to order products online, even plants and gardening supplies that used to only be available through brick-and-mortar stores or through drop-shipping.
When the Amazon Plant Store officially launched in 2018, it became the new “online greenhouse.” Seasoned gardeners and aspiring green thumbs alike are clicking on that buy box and adding everything from live plants to potting soil to their carts, all available with Amazon Prime delivery.
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Amazon’s expansion in the gardening market is great news for the success of your garden supply business. This growth in sales can create opportunities for you not only as an owner of an FBA business but also as the potential seller of an FBA business.
An increase in demand means that your garden supply business is more valuable to potential buyers. Escalating interest makes now a great time to explore the possibility of selling your FBA business.
Millennials are using their green thumbs to buy gardening supplies online
One demographic moving the needle for both online shopping and gardening is millennials. Of course, their purchase habits can impact your decision to sell your business. According to recent data from Statista, customers between the ages of 25 and 34 are the largest group of online shoppers in the United States.
Millennials make up over 20% of online shoppers and are more likely to purchase home and garden supplies online instead of going into their local greenhouse or hardware store. That’s great news for your Amazon garden supply FBA business.
Sales in the Lawn and Garden category on Amazon are growing
Another reason that could have you thinking about selling your garden supply FBA business is the overall growth of sales in lawn and garden supplies on Amazon. While millennials do make up a large portion of online buyers interested in the gardening supplies you sell, they’re not the only purchasers.
According to a recent study, gardening has increased by 57% over the past two years. Many gardeners experience a decrease in their stress and anxiety levels after spending time outside. Thanks to this increase in demand, lawn and garden supplies have become a popular Amazon product category for online shoppers.
Business customers are turning to the Amazon marketplace too. For example, restaurants pivoted to outdoor dining during the pandemic. That trend has remained popular even as COVID restrictions lift around the globe.
Sales of lawn and garden supplies on Amazon are growing (pun intended). This means that there are plentiful opportunities for FBA businesses that meet the demand. Buyers are interested in purchasing profitable businesses, and your increased success in lawn and garden sales could make this a perfect time to sell.
Amazon aggregators are searching for businesses to buy
Your success as an online business owner may have caught the attention of an Amazon aggregator. Aggregators regularly search on Amazon for sellers that they see have a high sales potential.
Receiving an email from an FBA aggregator positioning themselves as a potential buyer of your Amazon FBA business can be flattering. After all, knowing that your success is catching attention affirms the hard work you’re putting into growing your online business.
Their offers in your inbox could have you thinking about selling your business, which might not have been on your radar before.
Growing your business today for a successful sale down the road
There are many reasons why you might be ready to sell your Amazon FBA business. You might be thinking of selling sooner than later, or you could be thinking about the possibility of selling years down the road. Regardless of your timeline, there are some principles to keep in mind when you’re deciding to sell. Each of these will help you learn about your business and grow as an Amazon seller today, which can only benefit the sale of your business in the future.
Increasing the value of your Amazon FBA business boosts your earnings potential. But you can also take pride in owning a stabled business with a streamlined operation, which creates greater opportunities for you as a business owner.
There are many ways to grow your business today, but some of the most common include:
- Reducing the costs of goods sold (COGS) in order to increase profitability
- Improving your advertising strategy
Creating fantastic images to improve the shopping experience for Amazon buyers. In turn, your conversion rates will increase
- Focusing on establishing more repeat customers
- Aiming for never being out of stock on a product you’re selling
How to value your garden supply FBA business
Before you start the process of selling your business, it’s important to understand the valuation process. Similar to many online businesses, your Amazon garden supply FBA business can be valued using the SDE Multiple Method.
- Non-cash expenses
- One-time investments
- Your benefits as the owner
- Unrelated expenses or income.
Essentially, SDE reflects how much money your business makes for you as the owner.
After you have your SDE, you multiply that number by the multiple. For example, if your Amazon business generates $100,000 in SDE and is valued at a 3x multiple, it is worth $300,000 ($100,000 x 3 = $300,000).
At this point in the math equation, you may be wondering how that multiple number is generated.
At Quiet Light, we use four elements to determine the multiple, which we call the Four Pillars of Value. These pillars include:
When we work with you during the valuation, a business Advisor looks at every aspect of your business to determine where it stands in relation to our Four Pillars.
Using the Amazon FBA calculator to calculate the financial viability of your garden supply products
As an Amazon seller, you should always be aware of ways you can increase the value of your FBA business. Growing a successful business absolutely impacts your prospects for selling. Additionally, it sets you up for success while you’re still the owner.
Remember, preparing to sell your business isn’t just about landing a successful exit. Rather, it’s also about educating yourself as an entrepreneur.
The Amazon FBA calculator is in Amazon Seller Central. It’s an invaluable resource when it comes to calculating the financial viability of your garden supplies. It’s a free tool that helps you master your costs and optimize your margins.
After logging into your Amazon account, you can use the calculator to compare Amazon FBA to FBM (fulfillment by merchant), or simply use it to calculate the Amazon fees involved with an FBA program.
As a seller, you’ll provide product details and fulfillment costs. Then, the calculator will show you a real-time cost comparison between fulfillment methods.
The Amazon FBA Calculator also takes into account the following Amazon fees associated with your garden supply FBA business:
- Selling plans: The Individual plan, which costs $0.99 per unit sold, is the best plan choice if you are selling fewer than forty units per month and aren’t planning on investing in advertising on Amazon. Meanwhile, the Professional plan costs $39.99 per month no matter how many units of your garden supply products you sell, and it includes advanced selling tools such as APIs and reports.
- Referral fees: Amazon charges a referral fee for each item sold. The amount depends on the product category, with most referral fees landing somewhere between 8–15%.
- Fulfillment fees: Shipping costs depend on whether you choose to fulfill your own orders or use Fulfillment by Amazon.
- Additional FBA fees: Some sellers on Amazon incur an additional FBA fee due to long-term storage fees or optional additional fees to cover advertising or premium account services.
Costs associated with selling your garden supply products on Amazon will depend on what selling plan you choose, your fulfillment strategy, and a few other variables.
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The Amazon platform offers flexible options, which means you get to choose the combination that works best for you and the goals you have as a business owner and Amazon seller.
Where to sell your garden supply FBA business
When it comes to locating a buyer for your Amazon FBA business, you have multiple options. Generally those options will fall into one of two categories:
- Selling your business directly to a buyer without a third party brokering the sale
- Working with a Business Advisor to sell your business
Selling directly to a buyer
If you have a network of business owners who specialize in the FBA business model, you might already have a buyer in mind for your business. Selling to them directly means you won’t have to pay a commission for the sale. But it’s also important to keep in mind that even if your network is extensive, your pool of interested buyers is still small in comparison to the resources available to you when you work with an Advisor.
It’s important to note that working directly with a buyer leaves you more susceptible to leaving money on the table when selling your business. One common mistake that even seasoned business owners make is omitting important information on their add-back schedule when calculating their SDE. This results in an undervalued business and a loss for you in the sale of your business.
When you work with an Advisor to sell your business, you receive a professional valuation of your company. A buyer purchasing your business directly won’t warn you that you’ve undervalued your business, but an Advisor will look out for your best interests.
Working with an Advisor to sell your business
When you work with an Advisor, part of the selling process includes a professional evaluation, which means that you will be able to make a smooth exit and sell your business for a price that reflects the hard work you’ve put into growing it.
Working with an Advisor to sell your garden supply FBA business can open the pool of potential buyers that you don’t have access to as an individual. At Quiet Light, our buyer pool has more than $1.5 billion of capital ready for acquiring business just like your garden supply FBA business.
What steps do you need to take to list your business for sale?
After you’ve valued your business for sale and decided which route you want to take to find a buyer, you’re ready for the next practical steps, which include:
- Creating a marketing package
- Listing your business for sale
- Responding to offers
- Signing a letter of intent
- Conducting due diligence
- Completing the asset purchase agreement
- Closing the deal
- Training and transition
Creating a marketing package
If you’ve received a business valuation and you’re working with a business Advisor, the next thing you’ll do is create a marketing package that shows off your business to potential buyers.
This marketing plan spells out everything a buyer needs to know about your business, including details about product listings, inventory costs, storage fees, marketing metrics, and financial statements.
It’s time to list your business
Listing your business for sale is incredibly exciting. You know your goals for selling, and you’re one step closer to a successful exit. Working alongside an Advisor opens up your buying pool to a large number of interested buyers, which means that offers should start heading your way soon.
At Quiet Light, we have an extensive pool of educated buyers who are interested in buying businesses just like yours. Because potential buyers know that there are other investors making offers on your business, they’re highly motivated to ramp up their offers in hopes of landing a deal with you.
If you’re selling your business through a business Advisor, they’ll present each offer to you. You’ll look over the details and decide whether the offer is good for both interested parties. If so, now is the time to jump on a phone call with your potential buyer.
These phone calls are a chance for you to get to know the buyer. Are they a good fit for the business you’ve built? Do they have the skills and passion you’re looking for in someone to sell your business to? Communication at this stage is also a chance for a potential buyer to learn more about your business. It’s important to be clear, honest, and thorough in your conversations when you share about your business.
Signing a Letter of Intent
If you’ve established great communication with your potential buyer and they’re ready to move on to the next step, you’ll receive a Letter of Intent (LOI). This is a document that lays out the details of the deal and could include:
- Purchase price
- Terms of payment
- Closing timeline
- A list of assets included in the deal
- Any other details specific to your business
After reviewing the LOI, you can agree to everything included or continue the process of negotiations until the deal aligns with your goals and values. A business Advisor will help you assess the LOI and negotiate any details with the buyer.
Completing due diligence
Between your acceptance of the LOI and the transfer of funds, your buyer will review and verify sensitive and financial information relating to your business. This can include items such as:
- Bank statements
- Ad account reports
- Verification of your Amazon FBA sales
- Google analytics
- Google trend reports
- Any other third-party reporting services
- Shipping reports
- Marketing ad reports
- Amazon Seller Central reports
In this step, the buyer is verifying the information that you’ve shared with them about your business.
You can help this step go smoothly and quickly by gathering the information ahead of time.
Asset purchase agreement
The asset purchase agreement (APA) is a document containing all the details of the business acquisition deal. Most of the details inside the APA are based on the LOI with the addition of legal protection for both you and the buyer.
An APA is a legally binding document and should be reviewed by attornies who are experts in the process of business acquisition. After you and the buyer sign the APA, the deal is in the final stages before closing.
Closing the deal
All the hard work you’ve put into starting, building, and listing your business for sale has paid off! Now all that’s left is for the buyer to transfer the purchase funds to an escrow account managed by an escrow agent. After the agent confirms the funds, you will transfer your business to the new owner.
Transferring your business assets includes transferring your online accounts, email lists, and Amazon Seller account. The transfers should align with what was described in the asset purchase agreement.
After the buyer confirms you’ve transferred the assets to them, the escrow agent releases the funds to you and the deal is closed. Pop a bottle of champagne, you’ve earned it! But remember that there is one final step.
Training and transitioning
Many business deals require you to be available to assist the new owner of the business with training. The length of time for transitioning and training depends on your specific business deal.
If your buyer knows their way around Amazon FBA businesses, there may be very little that they need from you in this stage of the deal. On the other hand, if the new owner is less experienced with Amazon FBA business models, they may have extensive questions and training requests.
Some deals include a holdback or stability payment. In such a situation, funds from the sale might not come your way until after this training and transition period is over. But once you reach the end of that timeline, you’re ready to go after your next goal.
Maybe you’re excited to invest in a new business that piqued your interest. Or perhaps you’re ready to lounge poolside with your family. Or maybe both! Whatever your goals are, take time to celebrate a job well done!
As a business owner considering selling your business, it’s important to define the “why” behind your desire to sell your Amazon garden supply FBA business. What are you hoping to achieve by selling your business?
Answering those questions can help you determine what kind of sale is the best option for you. Defining your goals not only sets you up to be a better business owner in the present moment, but it also positions you for a successful exit in the future.
Thinking of Selling Your Business?
Get a free, individually-tailored valuation and business-readiness assessment. Sell when you're ready. Not a minute before.