After working hard to create a successful online business, it is only fair to ensure that you get the most out of your business when the time to sell it comes.
There are many ways through which you can increase the value of your FBA business. The freedom that an FBA business brings can in, many ways, open a lot of doors and improve efficiencies.
Read on to learn how you can boost the value of your business before selling it.
1. Web Traffic
If your business has its own website, an excellent search engine optimization (SEO) campaign can help gain huge search traffic and ultimately new customers. While this activity will require time, planning, and effort, when done right, it can lead to high dividends and can make customers trust your brand.
You can earn affiliate income by adding links to products listed for sale on Amazon if you have a brand website. You can earn between 4 and 10 percent commission if a customer buys a product from a link on your site. What’s more, the Amazon Associate scheme allows you to diversify your income sources, which will lead to increased cash flow stability.
2. Financials
If you get revenue from a few products, it is advisable to diversify into other products or look for seasonal products that you can sell when your current product is not selling. This will not just provide more cash flows stability but also reduce dependency from individual product sales.
The sale price of your business is largely based on your gross margins. If possible, get rid of all unnecessary overheads at least six months before selling FBA Amazon business.
Be sure to remove expenses such as employees by automating or outsourcing tasks as well as equipment, building, vehicles, and travel costs if they will not affect the running of the business.
Also, be sure to remove stock that is hard to sell as it can turn away potential buyers.
3. Type of FBA Business
Buyers are more likely to value businesses with a unique brand or those with proprietary technology. Private label businesses and resellers also tend to be more valuable.
You can significantly increase the value of your FBA business while still enjoying what you’ve worked so hard to achieve by investing your time and energy to transition your business up the value chain.
4. Customers
You can get more value for your business by having more information at your disposal. If possible, develop a website that showcases your brands and products and encourage dialogue with customers through social media.
Since sales coming from Amazon don’t have much information regarding your customers, it is important to develop a presence outside Amazon which can add much value in your future marketing efforts.
5. Suppliers
You can make sure that no one can have access to your products by signing exclusive contracts with your suppliers. While these contracts are not always respected, they can present a barrier to competitors planning to take your market share. What’s more, they can give value to prospective buyers.
If you’re dealing with popular products that you can’t access exclusively, make efforts to gain favorable terms.
Potential buyers will want to know that they can continue getting products from the same suppliers without interruptions and with the same terms.
6. Operations
As earlier mentioned, you should automate or outsource anything in your business that can be automated or outsourced. Your business will be more attractive to potential buyers if you remove yourself from the driver’s seat as much as possible.
Develop processes and systems, document everything relating to you and the suppliers, and wherever possible, integrate your business into existing systems.
Some of the processes you should document include inventory reordering, product sourcing criteria, tax calculation, day-to-day operations, collection and payment, and details regarding third-party contractors.
By documenting your processes properly, your business will be more efficient and, in turn, attract more buyers.
7. Diversification
If you’re selling just a few products, it is important to add more products that could bring more value to your business. Testing out new suppliers is also good if you aren’t happy with the current suppliers.
8. Ensure the Books Are Clean
Sometimes you can easily have messy financials regarding the daily business operations. Buyers can be scared by simple mistakes, for instance, putting numerous expenses in the miscellaneous category.
9. Identify Your Target Buyers
Who is likely to buy your business? Is it an individual? Or a private or corporate entity?
By clarifying who your target buyer is, you can make the required preparations to ensure your business is attractive to potential buyers.
