Amazon FBA Business for Sale with Mark Daoust of Quiet Light Brokerage - a podcast by Michael Veazey

Putting you Amazon FBA business up for sale can sometimes bring about mixed feelings. Learn if you are in a position to sell your Amazon business.
Who Quiet Light Brokerage work withQuiet Light Brokerage help online entrepreneurs to plan and execute successful exits.

They work with both Amazon and E-commerce, plus SaaS. They work with a lot of “bootstrappers”.Most clients have a business around for 2-3 years or more.

At the moment, one business around 25 years (ancient for internet business!).Business sales
About $75M in enterprise value in 2019.In 2020, expecting $100M.

Last year,  80% of Transactions were E-commerce businesses.Around 55% of those were based around Amazon:

- 46% was strictly Amazon10% mixed platform - including Amazon

A lot of businesses have an off Amazon element. But to qualify as a “mixed platform” business, it needs to have about a 50/50 split between on- and off-Amazon revenue.Mark Daoust’s  Background
Been doing online stuff for going on 20 years.15 years ago had a content website. He was newly married.

Thought it would be fun to sell this. Hired an advisor (broker) and was very unimpressed.Marked looked at the broker’s work and thought, “He gets 10% off the sale value - how hard could it really be?”.

This presented itself. Mark sold the business.Mark worked in some fledgling businesses for a year - a good friend decided to sell a company. He knew Mark would help him with it. Mark did indeed get the business sold.

The first 2 years was about honing processes two achieve two main aims:Making the transactions safe and secure in the M&A industry.
How to really prepare a business for sale.How Mark felt like a business seller
There were the usual exclusive contract and long agreement.But the broker didn’t seem to do much!

For the business brokerage, the industry norm is that the value is in the number of contracts you sign, a certain percentage of those work, and that is how the brokerage makes money.Mark felt that the broker and seller interests were not aligned.

Mark wanted to help business owners understand what drove the value.It makes the decision making cleaner.
Mark’s experience selling his businessMark was just given a number for the value of $350K.

Then the 1st offer was junk $75K.The second offer eventually went ahead at a slightly higher valuation, but still, way lower than Mark had been lead to expect.

The aim is to be a real advisor - what is the value of the asset I’m holding?Should I sell or hold? It’s a critical decision and you don’t get two chances.

So you want to be well informed as a business seller.Why bother selling a business if it’s a successful one? 
Mark suggests you shouldn’t aim to sell a good business if…It generates cash flow
Not too much timeHappy to do it

It’s usually harder to create a new business than you think. Partly because luck comes in, so in this case, do not put your Amazon FBA Business up for sale.Creating twin values
You have 2 values in building your businessCashflow (like stock dividend)
You’re creating an asset (like the value of the stock) in your overall portfolioThere does come a point in time when selling makes sense. That’s when you realize the asset value.
Why sell?Especially with the physical product business, most of the value you’ll get is when you sell.

The economics of e-commerce business -or even SaaS - is such that you have to reinvest most cash.The right time to sell a business
There comes an inflection point in your life.Eg: A client acquired a business 5 years before for $30-40K

It grew to about 400-500K per year in Profits (about $2M revenue)“Why not continue to sell the business?” Asked Mark

On Tuesdays and Thursdays, I keep the inventory in the second garage.To grow this, we would have to get an office, staff, etc.
Other life inflexionsGetting married

Further episodes of Amazing FBA Amazon and ECommerce Podcast, for Amazon Private Label Sellers, Shopify, Magento or Woocommerce business owners, and other e-commerce sellers and digital entrepreneurs.

Further podcasts by Michael Veazey

Website of Michael Veazey