Inside: How to sell your Amazon business step by step
I know that selling your business is perhaps the last thing that you wanted to think about while creating it, but now a few years have gone by. Perhaps you’ve been contemplating whether or not now is the time for you to sell, if your business is ready to be sold, or what you can do to maximize your profit when you finally decide to take the plunge.
Well, I am here as your guide to all the things that you need to know in order to sell your amazon business. It can be a very daunting field, but if it’s done right, I promise you it can be so worth it.
Below I am going to walk you through why you should sell your business, figure out how much you should sell for, and how to sell in a way that would maximize your payout. Let’s jump in!
This isn’t really an easy decision, so be kind to yourself throughout this process. You have spent years building this baby up from the ground floor. Of course, you are going to have a hard time letting go. But life comes in seasons, and perhaps you are ready to move on. It’s bittersweet, but it will free up space for a new adventure. Plus, the money is nice.
Why Sell Your Amazon Business?
Selling your business can be a hard decision, but sometimes those hard decisions are the ones that lead us into the next phases of our lives! I am going to go over a few reasons why you should sell your amazon business. If these resonate with you, perhaps it is time.
1. Your Business Grew Bigger Than you Bargained For
Some of you may have started an Amazon business with the intention of creating a simple side hustle that could earn you more income. But the internet is a crazy thing, and you never know how quickly things can turn in your favor. Pretty soon, you could be the owner of a super successful business, but you don’t have the time or the energy to manage it properly, nor do you want to.
You may not even know that getting out is an option. But I am here to tell you from experience that it is. Not only is it an option, but it could actually be a smart move on your part.
2. It doesn’t align with Your Values
This is something that I dealt with when I created my own Amazon business. Having to deal with sourcing products from factories around the world constantly, I realized that this wasn’t what I wanted. It began to feel overwhelming as if consumerism had taken over my entire life. This did NOT align with my values, and I found my way out: Sell!
If you imagine your day and it just makes you want to sigh with sadness, this is your sign that it is okay to sell your business and invest in a life that you are going to be happy to live.
3. The Selling Market Is At An All-Time High
If the two reasons above made you start to consider the idea of selling, then this last one is going to drive it home. You can pay attention to the seller markets to see when the best time to sell is. If you are able to catch it on an upwards wave…you are going to be able to make A LOT of money.
How Much Is Your Product Based Business Worth?
This is a fun one to calculate because you may be surprised. I had originally assumed that a business could be worth about as much as it makes every year. Boy, was I wrong! If your business is doing well, then you will be making much more than that.
The multiple depends on different factors, but generally speaking, it is usually between 24x and 48x your average net profit from the last twelve months. Meaning two to four times your annual net profit. So if you make an annual net profit, for example, $400 000, then likely your valuation would be something between $800,000 and $1,600,000.
Your net profit may be smaller or larger than that. Depending on the way the seller’s market is going, you could potentially make even more. If you are designated with some of the reasons to sell above, perhaps the payout would be worth it. You could take that money and create a new endeavor that speaks to your soul.
How to Sell Your Amazon Business To Maximize Profit
Below is a guide on how to sell your Amazon business in 10 simple steps. If you have made it this far and you’ve decided to do it…YAY! Congratulations on entering your next chapter. Take a look below to get started.
1. Get Your Finances In Order
One of the most important things that you can do before selling is to get your finances in order. You are not going to be able to sell if you don’t have proof of income to offer your potential buyer.
One of the best things I can recommend you do is put together a Profit Loss statement for the year that you are going to sell. You may also want to gather some from previous years as well so they can see how much your business has grown.
2. Get Into the Mind of a Buyer
You need to understand what your buyer is looking for in order to get the most out of them. They want to see you as a sound investment with few risks. Of course, they also want to make sure that there is room for growth as well.
3. Write a Strong Engagement Letter
To do this, you are going to have to get in contact with an advisory firm. This is a legal process, so there is no way for you to avoid this. Sign the letter and prepare yourself!
4. Get Your Marketing Package Together
A marketing package is essentially a detailed description of your business, why you created it, how it operates, what the workload is like, and if there are opportunities for growth.
5. Get on the Phone
Talking on the phone with your potential buyer is an important next step in this process.
6. Get a Letter of Intent
This is where the real paperwork starts to come in. A letter of intent is essentially a signed document that the potential buyer is interested in your business.
7. Verify Information
This is called the act of Due Diligence. It is essentially when all of the information that has been given thus far is verified.
8. Secure Your Asset Purchase Agreement
You are nearly there! These are the last few steps until you are all squared away. The asset purchase agreement is basically pure gold(meaning it’s very important). It goes over everything you need to know about the sale and discusses your terms and agreements. Once this is over, you are done!
So now you know how to sell your amazon business. Are you going to do it? Whatever you decide, know that it will be the right thing for you. I could not be happier with how my life has turned out so far after selling mine.
If you are interested in learning more about how I have made money online over the years, you should check out some of my other articles. Who knows, they could be the inspiration you need for this next chapter.
