How To Find And Purchase an Amazon FBA Business

Can You Buy Amazon FBA Businesses?

Yes, you can buy an Amazon business. Though Amazon does not explicitly condone the purchase of seller accounts, they do not have any rules against it.

Many individuals and companies buy Amazon FBA businesses to increase their income without the hassle of setting up the business and coming up with product ideas.

If you wish to buy an Amazon FBA business, you can either use a business broker or search alone.

If you want to buy an online seller business, you will need to equip yourself with all the info on knowing what you’re looking for and how to acquire it. So, read on to buy the most profitable Amazon FBA business for you.

How Much Does an Amazon FBA Business Cost?

FBA businesses are usually valued at an asking price of 2-4 times their annual revenue before taxes, interest, and depreciation.

So, if you were to buy an FBA that makes $250K per year, you would need to have a million dollars.

Don’t have that kind of money but still want to buy a highly profitable FBA business? There is a way!

It is best to go for low-earning FBAs that have the potential to increase sales and increase earnings. This way, you can maximize your return on investment.

For example, if you went for an FBA that is making $10,000 per year, you will pay no more than $40,000 for that business.

But, if the business has consistent sales yet tonnes of room for improvement (i.e., it needs more products, better marketing, etc.), you could triple its earnings.

These are the businesses you need to look for and let’s look at how to spot them!

How To Find The Best Amazon FBA To Buy

In the process of buying an Amazon business, you should look for online businesses with potential. There are some critical characteristics that can indicate a good investment:

Key Indicators of a Store’s Potential

Stores with high potential can be identified by these characteristics:

Stores with high-demand, low-supply products.
Stores that have a good seller rating and lots of product reviews from customers.
Stores with private label products.
Stores that sell products in high-ranking categories.
Stores that have good sales but haven’t reached their potential.

There are some characteristics that indicate a seller account is not worth buying; these include:

Stores with a poor seller rating and poor product reviews.
Stores that are selling products in unpopular categories, fad products, and seasonal products.
Stores that sell products in oversaturated, overly competitive areas.
Stores with poor sales figures and profit margins.

The Types of Products Sold By The Business

When you search for FBA businesses for sale, you should consider what type of products the business is selling:

Private label products – You will have your own brand, consistent supply, and if the product has a good sales history, it will likely continue to sell.
Resold products – Sellers that resell products usually struggle to supply products during high seasonal demand, which can be a poor investment.
Proprietary products – Sellers with proprietary products have their own products under their own brand, and so their brand stands out. Customers will not find the products anywhere else, and so this eliminates competition. Overall, these stores make a good investment.

The Age of The Business

The age of the online business is also an essential factor in your search as a buyer. Your search should be refined to seller accounts that are over 2 years old as you will need as much data on the seller’s sales as you can get.

How To Research The Business

In order to gauge the potential for growth within the business, prospective buyers will need to perform research. You will need access to the following information in order to assess the entire business:

Accounting records- this will give you all the data you need to assess the business. You will learn the annual revenue, shipping costs, the profit margins of the product listings, and other helpful information.
Supplier agreements – You will need to have a good understanding of the supplier arrangements in order to take over the business.
Account health – you will definitely need assurance that the seller account you are going to buy isn’t under threat of suspension.
Advertising arrangements -looking at the advertising the current seller is using is an excellent way of determining the potential of the online business. For instance, if the seller has great sales figures despite hardly using advertising, this online business will make a lucrative purchase.
The competition – you will need to pore through competitors’ seller accounts to assess whether your product listings are getting better reviews and sales. Then you can investigate the reasons why to come up with plans to improve the online business, or you may decide the business can’t compete and abandon your pursuit.

How Do You Purchase An Amazon FBA Business?

Once you have chosen the business you would like to buy, and the owner has agreed to your offer, there are some steps you must take to make yourself the new owner of the account.

Firstly, the seller must change the account information and put it in your name. You can accomplish this by calling the Amazon seller support line.

Although Amazon’s terms don’t expressly condone the transfer of account ownership, they will provide the necessary information to transfer ownership of the seller account.

Once the account is in your name, you will need to update the seller’s information. You need to:

Update your banking information- you need to ensure the account charged for the Amazon FBA business expenses is your own. You also need to ensure the money from purchasing goes into your account.
Update your personal information – your email should already be registered to the account from the transfer of ownership, but you still need to provide your address and phone number.
Update tax information – your Social Security number and EIN should be listed on the account for tax purposes.
Update the account name – the Amazon account needs to be in your name to make it clear to Amazon that the previous owner is no longer in control of the Amazon account.

Now that you have taken control of your new Amazon FBA seller account, it’s time to start thinking about how to improve your Amazon store and increase your net profit to maximize ROI.

Why Do People Buy Amazon Seller Accounts and Online Businesses?

Amazon stores can take a lot of time and effort to set up. If you’re not an ideas person but still want to cash in on the profits offered by Amazon stores, buying an Amazon FBA business is a good route to take.

By buying existing Amazon seller accounts, people can avoid the risk of failure that sellers face when starting their online businesses.

If you are equipped with the knowledge to grow and expand the business, you stand to receive all the benefits of owning an Amazon store without the risk or effort of establishing it.

Why Sell an Amazon Business?

For many Amazon sellers, their online business is a side endeavor alongside their current day job.

While they may be making money, they may not be able to maximize their sales figures because they simply do not have the time. So, rather than quitting their day job, they might prefer to sell the business.

This way, they can make up to 4 times their annual revenue without doing four years’ worth of work.

For a lot of Amazon sellers, selling their online business has been the plan all along.

How Much Money Can You Make From Buying an Amazon Store?

E commerce businesses can be very lucrative. If you choose to buy an Amazon store with potential or one that is already making a lot of money, it could make you one of the many Amazon FBA millionaires.

The average monthly profits of Amazon FBA businesses range from $1,000 to $25,000. So, on average, Amazon sellers make between $12,000 and $300,000 a year.

A solid Amazon FBA with good sales figures for its current listings can be a stable source of income. And, the more time you invest into improving and expanding the business, the more money you stand to make.

How Can I Grow and Expand My Amazon FBA Business?

Once you have bought your Amazon store, it’s time to evaluate your current listings and where you could improve management, costs and launch new products.

You can cut the costs of running your Amazon seller account in the following ways:

By changing shipping provider – you can cut costs by switching to a more cost-efficient global shipping provider like Coshipper. They handle the packing of your products, quality checks, and inspections so that you can streamline your supply chain to make it more efficient.
By speaking to your supplier – third party sellers have to foster good relationships with suppliers. This way, third party sellers can negotiate with suppliers for improvements on the price of current and new products.

Once you have minimized the costs of the business, you may want to improve management and reduce your to-do list by automating the business using account management.

Launching new products and improving on existing products is a great way to increase your monthly profit. You find new products by looking at what your competitors are selling.

You will need to improve the business you have bought if you want to make the most of your investment in an Amazon store.

Is It Better To Buy or Set Up an Amazon Business?

Getting any business up and running takes a lot of dedication. If you wish to start your own Amazon business, you have to accept the risk. 15% of new Amazon FBA businesses aren’t profitable.

If you are confident that there is a high demand and low competition for your product and have a passion for your product, then setting up an Amazon business is the way to go.

However, if you are unsure about what product to sell but still wish to cash in on the incredible earnings selling on Amazon can offer you, then buying an Amazon FBA business is for you.

Buying an Amazon FBA business can be a lot more expensive than establishing one, so factor the costs into your decisions when considering how to go about owning an Amazon FBA business.

What Makes an Amazon Business Successful?

Two things make an Amazon business successful; the products you sell and your commitment to growing the business.

Buying an Amazon store with a product that already sells can remove one element of the business’ success off your hands.

The rest of the business’s success is up to you; if you nurture the business and source the products cheaply, reduce shipping costs, advertise, and optimize the marketing of your products – you can ensure the success of your Amazon selling business.

What Does an Amazon Seller Do?

An Amazon FBA business is an online selling business that uses Fulfillment by Amazon to store their products and ship them out to customers.

The role of an Amazon seller is to source products and advertise them on Amazon to be sold and shipped from one of Amazon’s warehouses. Products may be shipped from another country to Amazon warehouses.

The Amazon seller is responsible for the supply of products, the pricing of products, the advertisement of products, the packaging of products (unless they use a packaging service), and the overall management of the online business and seller account.

In Summary

Amazon businesses can be very profitable, but for those that aren’t comfortable with the risks of starting a new business, buying an Amazon FBA business is a great option.

If you wish to buy an Amazon business, you must ensure you have both the capital to buy one and the commitment to growing and expanding the business to get a good return on your investment.

Choosing the right Amazon FBA business is essential to ensuring that you aren’t wasting your time and money.