The FBA (Fulfillment By Amazon) business model has become a very attractive model in the online space. A successful FBA business is a highly desirable asset, so if you are in this sector, you might be sitting on a business worth a considerable amount of money! Even if you are not considering selling just yet, it’s worth working on increasing the value of your business and look into different selling options that will help you get the best price for it in the future.
The guide on how to sell Amazon business will help you develop your brand and build a strong business that runs more efficiently.
Increase the Value of Your Amazon Business
If you want to sell on Amazon business for a good price, the first step is to do everything that you can to increase its value.
- Focus on One Niche
Focusing on a single niche will help you build a stronger business. For instance, selling yoga products allows you to understand your target customers’ likes, dislikes, and preferences. It also makes it easier to expand your inventory with related products that your audience may appreciate, which will result in repeat sales.
2. Offer Product Diversity
If a single product comprises 70% to 80% of your total sales, potential buyers will consider your business a risky deal. What will happen if there is a supply issue? Or the competition becomes fiercer? Adding complementary products will ensure that the revenue is more evenly distributed, thus helping you diversify your risk and allowing you to demand a higher price.
3. Optimize Your Store
Similar to Google, Amazon uses an algorithm to show users products relevant to their searches. One of the best ways to optimize your Amazon store and get highly targeted traffic is by using keywords.
Think about what terms would your customers use to search your products and distribute those terms (keywords) strategically throughout your copy, product listing titles and descriptions, images, as well as questions and answers.
4. Amazon Brand Registry
Be sure to apply to be a part of Amazon’s Brand Registry. Amazon’s Brand Registry allows FBA business owners who make or sell their own branded products to get greater control over their listing page, allowing you to create improved listing titles, descriptions, and product images.
It also protects them from copycat sellers and gives them ownership of the Buy Box, which can greatly increase their sales (To get a sense of how important the Buy Box is, consider this: more than 80% of Amazon sales go through the Buy Box, and this percentage is even higher for mobile purchases!)
When buyers see these things, they will feel much more confident that they’re buying a well-established and well-protected business.
5. Build a Brand Outside Amazon
Today, people will always check a business online before making a purchase. Building a presence outside of Amazon will make it easier to generate user reviews and, as a result, boost your credibility.
Social media channels are perfect for building communities and attracting more organic traffic. You should also consider creating a website for your FBA business. Haseveraling a website will allow you to tell your brand’s story and distinguish yourself from the competition. In addition, it will allow you to access customer data, collect customer emails, and re-market to them later on.
6. Automate Your Operations
You should do everything you can to make your business run more efficiently as this will make it more valuable to buyers. Fortunately, you can choose from a number of solutions and apps that can help you automate and streamline your business’s processes.
For instance, using accounting software will help you automate your bookkeeping and significantly reduce the amount of time you spend creating spreadsheets, thus allowing you to focus on more pressing tasks.
7. Sign Exclusivity Agreements with Suppliers
Seeing that inventory can be sourced from the same suppliers with little or no interruptions is a big plus in the eyes of potential. Signing exclusivity agreements will add value to your brand while at the same time helping you create an entry barrier for competitors. If this isn’t possible, you should at least aim to get more favorable terms.
8. Use Multiple Sales Channels
Amazon should be just one of the multiple sales channels you’re using. When you sell your products on other marketplaces besides Amazon (such as Etsy or eBay), you’re boosting your brand’s potential to grow and instill trust in customers. This also allows you to gain more insight into customer preferences, which might result in new product ideas, increased sales, and a business that’s more valuable to potential buyers.
What Are Your Selling Options?
In general, smaller Amazon businesses, i.e. those making less than $500k a year, are best sold privately by the owner through forums or classified sites like Flippa and BizBuySell.
However, if your business is bigger ($100.000 to $20 million), it is best to work with a broker. The process of getting the best deal in negotiations is something that most sellers have little or no experience with. Without this knowledge, it’s unlikely that you’ll be able to perform an efficient and accurate asset valuation, assess the growth potential of your business, or negotiate the terms of the sale contract.
Larger businesses (over $20 million) will require assistance from a merger and acquisition company or an investment bank.
You may be surprised by how much buyers are actually willing to pay for an Amazon FBA business! Applying the above-listed tips will help you develop your online business and get the most from its sale. In general, even if you are not looking to sell at the moment, thinking about an exit early on can help direct you toward building a more streamlined and profitable business.