Buying an established Amazon business is an appealing investment opportunity. Acquiring an existing Amazon FBA or Amazon FBM business can provide you with a head start when comparing to starting your own Amazon store. Remember that it’s crucial to approach a purchase like this with caution. To ensure a successful
If you’re looking to sell your Amazon business, the financial statements you provide are typically the most critical information that potential buyers will consider. These statements reveal how your business’s unique selling points translate into actual profits. They also serve as useful tools for buyers to assess the risks and
We’ve talked a lot about valuation metrics that determine the value of your FBA business when the time comes to sell it. But looking at metrics like Inventory to SDE ratio or whether Advertising as a % of sales is trending up and down, is quite dull and boring. Instead, let’s talk about things that matter to
There are hundreds of metrics that are in play when it comes to business valuations. But all of them belong to one of 4 distinct categories, making up the 4 Pillars of Business Valuation, as we like to call it.
I’m going to break down the 27 factors that matter most to an FBA business valuation. Ultimately, this is the price someone would be prepared to pay for your business if you decide to sell and move on to something bigger.
Seller’s Discretionary Earnings, Discretionary Cashflow, Seller’s Discretionary Income – call it what you will, this is the most important figure when it comes to the valuation and sale of any business. If you don’t know your SDE, you have no way of knowing how much your business is worth, period.
Regardless of whether your business is valued by a human or by a computer-based valuation tool, there are two key prerequisites that need to be in place for any valuation to be even close to accurate. These are: …
Everyone knows how extremely important it is to have a healthy profit margin. We’ve even covered it right here just a little while ago. But what’s a good margin? 15%? 25%? 50%? The answer, as you may guess, is it depends.