How to Increase the Value of Your Amazon Business?
Getting the right Amazon brand value exit is less difficult than building the business.
It depends on a number of factors, including profitability, automation, customer engagement, and brand presence. It requires years of persistence and perseverance to take your business to its rightful pedestal.
Getting an undervalued business with some unoptimized sections is a gem for the buyers. They can buy your business at a lower value and optimize it to create multiples in value. But your efforts to get a fair value for your business will not be useful if you’re not going in the right direction.
Here are seven ways to avoid it and increase the value of your Amazon business:
Strategies to Increase Your Amazon Brand Value
Having a higher value ( > 1 million) makes your business even more attractive to buyers. A greater value allows you to close better deals while selling your business because of the streamlined processes and improved efficiency. And with efficiency comes better profitability.
Increasing your business value is not synonymous with just growing your Amazon sales. Many other factors go into its valuation.
Here’s a list of seven strategies that you can use to get better valuation before exit:
1. Create a Social Media Presence
Amazon has the largest market cap among the ecommerce marketplaces. It’s visited by more than two billion people every month.
The more consumers trust you, the more they’ll buy from you. But restricting yourself to only Amazon because of the number of eyeballs is the worst mistake you can make as a seller preparing to exit. Building a community outside of Amazon will increase your credibility, indirectly impacting your sales.
Make sure you’re present on social media platforms like Facebook, Instagram, and YouTube to increase your brand visibility, trust, sales, and revenue. The platforms allow you to engage with your customers and win them. While you can reply to reviews on Amazon, social media engagement takes your connection with the audience to another level.
The social media platforms collectively have more than 3.6 billion users. A strong presence across these platforms gives you a solid ground to launch new products and market existing ones better. You can also use social media to gather user-generated content (UGC) from your users and showcase it to increase your brand’s credibility.
The reason: the more credible your brand is, the more valuable your business will be. Your potential buyer will have a prepared ground to market your products, generating more revenue.
2. Diversify Your Product Line
Having two or three products in your catalog makes your business appear risky. What if a product is suddenly removed from your Amazon store? Or what if one of the products gets copied and sold by another seller?
The risk of a single-product catalog is way too high. Adding more products to your inventory diversifies this risk if you are a single product seller. This is why having more than five products is recommended to have a better brand value for Amazon.
Pro tip: Make sure you do thorough consumer research before launching new products. Identify what your customers like and need. What can you add to upsell or cross-sell an existing product?
Diversify your catalog based on what your target audience is already buying. But don’t go on to add unnecessary products because all that would do is increase your inventory carrying cost and spread you too thin.
3. Optimize Your Supply Chain
An optimized supply chain is the first thing buyers look at. It’s because creating and optimizing the supply chain is what makes the maximum effort and time. Without this, your business can be valued at multiples lower, even if you have the other factors in place.
A buyer looks for businesses that have established a reliable supply chain with minimal interruptions. It minimizes unnecessary interruptions and helps you cater to customer expectations on time.
Pro tip: Consider having multiple suppliers, preferably in different countries, to ensure a stable supply even when one or more manufacturing units are compromised. Also, having a single supplier puts you at the risk of unanticipated price hikes, but multiple suppliers diversify this risk.
That’s not all. Your inventory also has a role to play in increasing your Amazon brand value. Ensure your inventory consists of active “movers” and not “sitters.” Plan your demand using AI-backed tools to ensure you always have the proper number of stocks – be it the holiday season or a low-order one.
4. Register Your Brand
Being an Amazon-registered brand comes with its share of benefits. It protects copycats and gives you access to exclusive benefits like protecting your advertising data. Even if it’s a lengthy and time-consuming process, it won’t be wrong to say that it’s a necessity.
Your exit won’t be complete without the registration. Sooner or later, you’ll have to complete the legalities. The sooner you do it, the better your Amazon brand value will be.
5. Maintain Clean and Organized Financial Records
Increasing sales will increase your business value only to an extent.
The value will increase beyond that only if the sales are accompanied by minimized losses, managed cash flows, and maximum profits. And until and unless you maintain clean financial records, this won’t be possible.
Use accrual accounting – not cash. Most sellers miss out on this, which costs them a lot during their exit. Instead of inspecting your accounts quarterly, do it monthly.
Organized records also help you keep track of your finances, helping in better analysis and decision-making. No buyer will fairly assess your business metrics if you have messy records and inconsistent accounting practices.
6. Automate Processes
An efficiently operating business is far more valuable than a business with the same metrics but inefficient operations. “Everything in its place and a place for everything” should be your motto.
A clear-cut distinction of responsibilities and processes gives a sense of clarity to the employees and sends out the message of efficiency to the potential buyer.
Identify the functional areas of operations that improve efficiency, create Standard Operating Procedures (SOPs), and cut down on repetitive tasks. Automation makes your business a lucrative investment for buyers as it boosts efficiency, provides accountability, minimizes errors, and makes sure there are defined workflows.
If it sounds like too much, take the help of an Amazon brand accelerator like Scale Brand that helps you increase your business value by multiples. Professionals can guide you through this important journey, and considering the ROI you get, the investment is completely worth it.
7. Collect Reviews and UGC
When shopping online, shoppers don’t have the ability to touch or see your product. Customer reviews solve this problem by giving an unbiased description of the product. 70% of online shoppers are more likely to purchase a product from a brand with reviews.
Encourage your customers to leave lengthy reviews and with pictures, if possible. Providing your customers with exemplary services is the only way to do that.
Reviews (and loads of them) don’t just build customer trust, and it also acts as a virtual salesperson for your products. Set up email sequences post-purchase to make sure your customer doesn’t forget to leave the review. You can also run contests on your social media pages and incentivize your existing customers to leave reviews on your page.
Exit with an Increased Amazon Business Value
Increasing the value of your business takes a whole lot of consistent effort. You have to keep on trying to do so, even if you don’t get results initially, to take your business to that next level.
A profitable and streamlined business is a dream for many buyers and Amazon brand aggregators – and they are willing to pay for it.
Amazon makes millions every day. If you wish for your business to make millions for you, you have to make sure to expand and exploit its growth potential and get its rightful value. And to do that, you already know what to do now!
Contact us today to take the Amazon brand value to the next level.