How can you be involved in your FBA Business?

So, you’ve grown your FBA business to a scale you can be really proud of and are thinking of selling it...

June 28, 2021
How to Value

So, you’ve grown your FBA business to a scale you can be really proud of and are thinking of selling it. At the same, after all the hard work you’ve put into it and the great outlook, it seems hard to let go. You’re not alone: this is a typical entrepreneur’s dilemma.

In the past years, we have seen most entrepreneurs selling their FBA business wanting to at least make sure it’s left in good hands. But for many of them, it’s not just about the money: it’s a lifestyle, a personal network and almost like a baby. Considering that you will have to sign a non-compete agreement and give up working in a particular field for a while, the decision gets even tougher.

Selling your business, keeping it or both at the same time

There are many ways to be involved in your Amazon FBA Business once it’s been sold:

· As part of the management team: This is not an option available for everybody. Many entrepreneurs are happy building new endeavors under their own terms, but struggle when getting involved in the intricacies of a bigger organization. That’s why you will have to culturally and strategically align with the buyer, and this goes both ways.

· As an external advisor: Given your experience in a certain field, your contribution may be really valuable to continue growing your brand, but at the same time you may want to be hands-free to say what you think without frills or caring about any bigger organizational issues. This is usually an excellent cooperation and will give you the opportunity to supervise any earn-out you may have structured.

· As an investor: Either the buyer can offer equity from the parent company or you could be still directly exposed to your asset, via direct equity or via an earn-out. If you have no time to dedicate to the FBA business but you still want to participate in the upside, this is a good idea.

· As a supplier: Let’s say you have a great expertise or infrastructure in logistics, marketing, sourcing or any other operational matter. You may want to stay engaged in that specific front providing your services to the buyer for a while.

· As a friend and occasional (or not so occasional) collaborator: You surely have a strong network in the Amazon ecosystem and will want to introduce your entrepreneur friends to the buyer if you feel comfortable with them, or present new suppliers, pitch new product ideas you want to incubate with a partner… Or just have lunch from time to time to discuss how things are going.

· A combination of the above: It doesn’t have to be a single way to keep contact with your FBA business. The avenues above can be combined to make for a healthy ongoing relationship.

However, if none of the above satisfies you, Boopos offers a product that allows you to cash out while keeping autonomy and ownership, without personal guarantees or fixed term commitments. Our Variable Recap will let you cash out as much as 2x your sellers’ discretionary earnings in less than 7 days without having to even think about the above.

How to build a strong Amazon FBA business?

Whichever option above you choose, one important due diligence item is your product. Investing in your product will make your FBA business stronger and this translates into a better valuation when selling or maximize your chances of getting finance.

A very common way to start an FBA business is to research keyword niches and once you’ve found an attractive one, try to find suppliers in a bulk trading platform like Alibaba, maybe customize it a little bit and start selling. While it looks tempting, this strategy will almost always find problems with the mid – term.

If you look at the most mature niches in the .com marketplace, you’ll find quite a few Chinese merchants directly offering decent products at competitive prices.

So, you definitely have to think about adding value to your product. There are a few strategies for that:

· Build your brand: the same product sold by a reputable brand and an unknown brand will likely see a big difference in sales. This is built by the attractiveness of the offer, but also by how you respond to incidences and customer service.

· Find below-the-radar suppliers or products that are not easy to get to: use your personal network rather than just an open, public marketplace to find the best product manufacturers for your specific niche.

· Build a coherent portfolio of products, ideally with more than one supplier: this diversification will lower the risk of total disintermediation, but will also make your brand stronger as it’s the only one offering such a breadth of goods.

· Invest extra resources in the customization and design.

Whether you finally decide to sell your FBA businesses or keep it, at Boopos we can help you make the best decision.

It should meet both the necessities of the buyer and the Amazon FBA seller and make sense from a business standpoint. Boopos believes in sharing thoughts openly, and we will definitely tell you whether there’s a rationale behind any of these or not. We like to find the right way to partner with each entrepreneur. To know more about our options for your Amazon FBA Business do not hesitate to contact us.