The First Call
If you are reading this, it means we have already completed the first step. Quick start, right?
This phase will be very useful for both parties to get to know each other. Each will confirm its criteria are matched, and that there is a cultural fit. We will ask you for some basic information about your brand, and your expectations. We will also share about Yaba investment philosophy and resources and answer your questions.
Here we review the information you provided us to confirm the accuracy of the information and start preparing an attractive offer aligned with your expectations
In less than a week we will be able to share with you an official offer. Two important points here. First, we recently raised 75M€ so we are actively ready to make acquisitions, and have the capital in the bank to do so. Second, before sharing an LOI we always do an initial review and obtain internal approval from our Investment Committee, which means that the likelihood of execution with YABA is high.
Letter of Intent
The LOI is a non-binding document that includes everything about our offer. If you decide to sign it and move forward with the process, we will enter into an exclusivity period of 90 days, during which we will run the Due Diligence.
We will run a Due Diligence on commercial, legal, and finance to confirm that everything is aligned with what we discussed over the previous weeks.
Together, we will prepare a business plan to be aligned with the future growth of the brand
We finally draft and execute together a contract agreement
This is the last step where we will make the final adjustments before changing the Amazon account ownership.
Congrats on your time and effort in starting and growing your successful business! From now on, you and your brand are part of the Yaba family, where we Nurture and Grow Amazing Brands and Talents!
How to Sell Your Amazon Business
Are you seeing your Amazon business having its much-deserved success? If so, it’s probably time to consider the possibility that you are ready to sell your Amazon business to a respected aggregator or buyer. A great deal (more than 50%) of the profits business owners make comes when they make a deal, and it all depends on the readiness of your company, the business owner's knowledge of the process, and the level of ability of the aggregator you choose.
If you’ve been scouring the internet looking for answers to “how to sell my amazon business”, we’re here to help! We’ll take you through ways to know when your business has reached its full potential to sell at a fair price, the process of selling a business, as well as what to look for in an aggregator.
How To Know When Your Business Is Ready
Before jumping into how to sell Amazon FBA business, one must first know if the business has the potential to be sold. Amazon businesses with high net profits year-round are valuable, but they have to be sold at the right time. Later, we’ll go through what to look for within the market, but for now, let's start with the business itself.
Just Like Fine Wine, Amazon Businesses Get Better With Age
The most sellable businesses are ones that have been continuously performing well on Amazon, the longer the better. Younger businesses, meaning those that have only been out a year or less, pose higher risks for buyers as they don’t have the sales data for multiple years and therefore are often bought at a lower price. Amazon businesses succeed based on long-term consumer trust, consistently good reviews, and high rankings, all of which show in time.
Sellable Businesses Work Smarter, Not Harder
Aggregators or buyers are looking for businesses that run without long hours, as once they take over they don’t want to be forced into a full-time job with little to no support. The less hours per week a business requires, the more sellable it is. Buyers are looking for Amazon businesses that are run not only by the owner but by virtual assistants and other support employees.
Basically, the ability to sell amazon business depends on the efficiency and time needed to maintain its success.
Business Model Behavior
Sellability is dependent on the business model with private label being most attractive, followed by models such as dropshipping, wholesale, or retail arbitrage. This is because as compared to reselling models, private label businesses own their assets. That doesn’t mean the other models can’t be sold, but unless a business owner has an exclusive resale deal, they may be bought at a lower price. When aggregators or buyers can’t control the supply chain or product development it means they won’t be able to fully control their investment, but a good aggregator will work with you to help you achieve what is needed.
Selling An Amazon Business | Step-By-Step
Selling in the right market is key, but industry reports are showing that in the last year Amazon business sales made up 85% of the e-commerce business sold, meaning that now is the time to cash in if you’re ready!
Step 1: Money Makes The World Go Round
The first step of selling your business is having clear financials, presented in the right way. Cash accounting can make net income and Seller's Discretionary Earnings (SDE) look lower than what they are, so instead one should present profit and loss statements through the Accrual Accounting Method, which allows you to record revenue prepayment for goods and expenses.
Step 2: Give The People What They Want
Along with the information provided on what makes a business sellable, you’ll want to include trend patterns, paths towards diversification, and growth opportunities. A great aggregator can help scale a business rapidly, but they still want to minimize risks as much as possible.
Step 3: The Magic Of Marketing
To sell your business you need to prepare a Marketing Package, which is then presented to potential aggregators or buyers. This should include a detailed overview of all aspects of the business, from its inception to its day-to-day operation, and growth potential. It’s important to never give out a Marketing Package without having the buyer sign an NDA for your protection.
Step 4: The Most Important Step | Finding Right Aggregator
Selling to an aggregator allows Amazon business owners to scale their business exponentially even internationally. Finding the right aggregator means finding a company that not only possesses the resources to grow the business through research, marketing tactics, and optimization strategies, but the funding required to purchase it at a fair price, which also ensures that the process runs quickly and smoothly. Business owners should also look into the ethos of the company, as it's essential to find aggregators that are run with empathic leadership, and value a trusting relationship with their brands.
Step 5: Do Due Diligence
This is when the buyer or aggregator does their due diligence, looking through documents, financials, and key performance reports. They also communicate with vendors and suppliers on their contracts, as often vendors will try to negotiate their contracts for better terms.
Step 6: Closing The Deal
Once you find an exceptional aggregator to sell to, you’ll fill out a Purchase Agreement, which can be completed with the help of an advisor. In this agreement, you’ll finalize all terms and conditions of the sale and schedule when assets will be transferred.
Struggling To Know Where To Start?
With so many steps of sales, it can be difficult to know where to begin! Once you’ve ensured that the business is ready to sell, start to research some aggregators. A great company will make this process simple, beneficial, and easy, while others can slow the process down, or worse, lead to unfavorable results.
Your Amazing Brand Amplifier or YABA is a company founded on the concept of nurturing talent while growing their brands. Companies such as these will help you get the fairest price for your business while also helping you succeed not just through this sales process but throughout the entirety of your career... because this is just the beginning!