Due to the global lockdown, consumer behavior shifted towards online shopping. Currently, it is prime time to become an FBA broker. Additionally, it is also the best time to sell your Amazon business. In the past three years, E-commerce industry sales growth set historic records. The principal catalyst of the sales growth was COVID-19.
Amazon became the leading online sales platform globally out of multiple E-commerce platforms. It is expected that Amazon’s net sales will reach 729.76 billion US dollars in 2022.
E-commerce sales are further expected to grow in the future. For this reason, there are many buyers in the market interested in acquiring your Amazon business.
However, selling the Amazon business is a complicated process. There are multiple steps involved in the selling procedure that must be handled effectively. If you are inexperienced in this field, you need the help of an experienced professional in the market. The FBA broker can help you in this regard.
This guide will include in-depth knowledge about FBA brokers and how to become an FBA broker.
Amazon FBA Broker
In short, an FBA business broker acts as an intermediary between buyers and sellers in the sales and purchase of businesses. They charge a specific percentage as a fee for the final sale.
How to Become an FBA Broker?
It’s not an easy task to become an E-commerce FBA broker unless you have significant expertise in understanding online business and its ins and outs. You should know how to scale online businesses to provide them with successful exits and learn the core elements of a successful business.
Moreover, having a vast range of buyers’ and sellers’ networks is vital to becoming an FBA broker. The dedicated and talented team to help you become a successful broker is also crucial.
Before becoming an FBA broker, ensure that you possess the core capabilities mentioned below.
What Does an FBA Broker Do?
We have discussed how to become an FBA broker? let’s explore what core services they provide:
Assessing Business Valuation
Before selling your business, it’s imperative to know its monetary value. A business broker provides you with the exact valuation of your business by thoroughly analyzing your financial records.
According to the Business Daily News, valuation is processed by calculating the business’s tangible and intangible assets vs. debts and liabilities holdings. The valuation of your company is also dependent on your annual profits.
E-commerce businesses mostly have intangible assets like Amazon accounts, trademarks, reviews, etc. The inventory you are holding at selling time is also fully transferred to the cost you paid to acquire it. It is neither added nor subtracted from the total business value, but the new owner purchases it at a specific price.
If you didn’t prepare your bookkeeping or don’t have any financial records, FBA brokers can help you in this regard.
You can define a sales memorandum as the catalog of your company that includes all the information about your business that buyers are interested to know.
The sales memorandum will generally include:
- Business description
- Financial records of business
- Target market
- Strengths and weaknesses
- Current financial statements and projections.
The information incorporated in the sales memorandum acts as your business advertisement, so presenting attractive and accurate information in this catalog. Business brokers have significant expertise in this area.
Many brokerage firms have marketing departments to promote your business in front of willing buyers. Usually, these brokers have an internal database of buyers that you can easily access on your own.
Getting your business in front of the buyers is half the job done; the other half is the remaining process to follow for selling business. Most Amazon Sellers don’t have time to indulge in the complexity of selling a business, so the FBA broker service is worth paying for.
Good brokers never waste your time. They will always provide you with serious buyers for your business who are not there to waste your and their valuable time.
Negotiating Sales Terms
After having potential buyers for your business, now it’s time to offer negotiating prices. Ecommerce FBA brokers do negotiations on your behalf, and sometimes they also demand your presence to sit down with the buyer and finalize the price.
Conducting Due Diligence
Buyers always require a thorough investigation process before finalizing the deal. It’s for the safety purposes of both parties to ensure all claims made during negotiation are valid.
Under this procedure, your business’s legal, operational, technical, and financial aspects are analyzed. Working on it alone would be a hectic and challenging task. However, if you are working with a business broker, it’s not a big deal as they are experts in handling due diligence procedures.
For finalizing the sale, there is a need to draft a contract or agreement. FBA brokers have a dedicated team responsible for preparing all the legal work of your business that was finalized in negotiations.
Brokers are very effective in handling this duty; still, we advise you to read these documents on your own for your convenience. After everything is done, the business broker will handle all the payment procedures and business asset transfer.
Providing After Sales Support
Besides the broker’s role in ensuring the successful deal closure between buyers and sellers, a few things need to be communicated after the sale. Brokers are responsible for connecting seller and buyer in this aspect.
How to Choose the Right Broker?
Selecting the right broker is a very tricky step. In choosing the right business broker, you should follow these below-listed points:
- Always research the track records, credentials, and client reviews of the brokers.
- Choose the broker who listens and prioritizes your interests.
- I prefer the brokers to have solid sales strategies and confidentiality policies.
It may seem hard to pay a business broker a specific percentage of fees for successful deal completion. But most probably, they will sell your business at a higher price than you can receive on your own. Besides, you can efficiently deal with all the terms and conditions of the deal without missing anything important.
Why do people fail Amazon FBA?
Most of the failures are due to a lack of experience and knowledge regarding online FBA business.
Why become an FBA broker?
E-commerce sales growth has broken records in the past three years, and they are expected to grow further in the future. The number of sellers and buyers is also escalating immensely. Therefore, this is the best time to show your expertise as an FBA broker.
How to become an FBA broker?
One should have significant e-Commerce business knowledge and a vast network of buyers and sellers to become an FBA broker.