How do you buy or sell an Amazon business? Today we talk to an expert broker who will shed light on this question. Mark Daoust, Founder and CEO of Quiet Light Brokerage sits down with us to talk about strategy.
- How do you buy an Amazon business?
- Buy business with weakness where you have strength
- Why buy a business instead of build one?
- Most important thing to avoid or mistake to avoid when buying a business?
- Product protection, intellectual property is super important.
- Background of Quiet Light Brokerage.
- 70-mil in transactions average about 1 mil per deal.
- Maturity phase - sophisticated sellers buying other businesses.
- When selling business in next 12 months, what is the prep work?
- 4 pillars of value
- Risk
- IP protection
- Sku diversity
- Marketplace diversity
- Growth
- How to go from 1 mil to 5 mil
- Reasonable ways to growth.
- Transfer-ability
- Etsy hard to transfer
- Vendors may not work with someone else.
- Licensing issues?
- Documentation
- Documentation is the largest impact.
- Financials - Recorded accrual highly valuable.
- Switches value of business hundreds of thousands of dollars.
- Mistakes to avoid
- Reasons why you should sell
- Feather in the cap - I sold a business
- If selling just for financials, don’t do it.
- Lower end of spectrum - want one payday.
- Build to hold
- If you’re able to sell it, it’s because someone wants to buy it to hold.
- Get an evaluation - 2.5-3.5 close variation of EBITA
- What will buyers get excited about? Object to?
- Are buyers excited about niche but too specific into a couple of skus vs diversified
- Prep
- Get all information that buyers want.
- Answer buyers questions before they ask them.
- Sell into the objections
- Average time on market: 90 days
- 200 inquiries per business. Several conference calls. Offers.
- 30-60 days of due diligence. Hopefully then close.
- Broker adds value
- Prep
- Navigate transaction
- Stressful.
- If you have an offer just take it, don’t use a broker.
Find out more about Quiet Light Brokerage at https://www.quietlightbrokerage.com/
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