YES, you can buy an Amazon FBA store.
In fact, if you google "where to buy an Amazon FBA store," you'll find entire marketplaces dedicated to buying and selling online businesses, each with thousands of listings. It constitutes its own thriving industry.
But should you buy an Amazon FBA store? Are there any lucrative benefits to it compared to building one from scratch? And how exactly do you do it?
In this article, we'll discuss why buying an Amazon FBA store makes sense, the risks involved, and how to do it. We will also explore the top considerations to maximize your investment.
Why You Should Buy an Amazon FBA Store
Besides the hefty upfront costs of buying an Amazon FBA store, you also need to search for a profitable business that meets a long list of criteria, which is like finding a needle in a haystack. Yet, many entrepreneurs find this option appealing. Why? Two reasons:
- It allows you to skip the setup—the hardest and riskiest phase of starting a business. Every business owner knows how hard it is to come up with a unique and selling idea, create a business plan, find capital, obtain licenses, negotiate with suppliers, test products, and build momentum, among many other steps. Plus, if you do the math, you'll realize that buying an Amazon FBA store costs almost as much as building one from the ground up—minus time and effort.
- Do you have an existing edge in the niche you're eyeing? If yes, then buying an Amazon FBA is a smart move. For instance, if you have a successful YouTube channel about gadgets, you can buy an Amazon FBA store that sells the same gadgets you feature in your videos to diversify your investment and add a new revenue stream. You can then capitalize on your huge YouTube following to exponentially grow your Amazon FBA store.
Why do people sell their Amazon FBA store?
If buying an existing Amazon FBA store is so lucrative, why are people selling their stores? This is a valid question. After all, you want to be sure you're not assuming responsibility for liability or investing in something bound to fail. Turns out Amazon sellers sell their stores for various reasons.
- Reinvestment: Many Amazon sellers want to try a different niche or venture
- Early retirement: Some long-time Amazon sellers want to call it quits
- Emergency funds: Unfortunate circumstances may have forced the owner to sell their assets
- Overwhelmed: The owner can't keep up with business demands
How to Buy an Amazon FBA Store
Buying an Amazon FBA store is similar to any Amazon purchase you've made before, except it's riskier, involves more money, and is carried out on a different platform. Let's break down the process to make it digestible and shed light on aspects you find vague or incomprehensible.
Step 1: Build a roadmap.
The process may be straightforward, but it goes beyond the actual purchase. You're probably planning to sell this store or merge it with another one in the future. In that case, your research and selection process will slightly differ from when you plan to own the business for good. Instead of searching for something you're passionate about, you'll have to consider what future sellers would want.
This is where a roadmap can come in handy. A roadmap should outline the purchase process, from conducting due diligence to transferring ownership, and your new store's growth milestones. If you plan to sell it in the future, your long-term strategy for priming your store for sale should reflect on the roadmap.
Step 2: Do your product and market research.
You're not just buying a piece of item from a store. You're buying the store. Much more is at stake, making product and market research all the more crucial. Here's how you can simplify your research process:
- Use a deductive approach when doing your research. Start by taking note of products that sell well and stores with the highest growth potential.
- Choose a niche you know about from the list (examples: jewelry, baby products, dieting, electronics, etc.).
- Gather and analyze relevant data using tools like Glimpse and Tableau to get real-time insights and make more accurate choices.
Step 3: Find a seller.
Now that you've identified a profitable niche, you can start searching for stores within that niche. There are two ways to do it—private sale or through a broker.
A private sale means you'll do the research yourself, including reaching out to Amazon FBA sellers who might want to sell their stores. This can be tricky for a couple of reasons:
You have limited perspective and can only see the cherry on top, which is often expensive and may not always be profitable when taken over by a new owner. Many Amazon FBA stores for sale are hidden gems tucked away in obscurity, and you have no way to find them.
You'll have to vet the Amazon FBA stores yourself, which can be risky if you're not an expert in business valuation.
Consider hiring a broker if you lack confidence in your business vetting skills. Not only do they have the expertise, but they also have access to an extensive network of vetted Amazon FBA stores. They even use advanced tools to sift through massive listings and find exactly what you want.
A broker can be an individual, a firm, or a personal assistance service offered by a marketplace. Here's a list of brokerage firms and marketplaces you can go to when searching for Amazon FBA stores for sale:
- Empire Flippers
- Flippa
- Quiet Light
- BizBuySell
- Website Closers
- Business Exits
- com
- FE Internation
- Latona's
You won't be on your own when you search for businesses on these platforms. Most of them will provide a representative who can help narrow your choices by analyzing the information you provided upon signing up. This representative specializes in online businesses, particularly Amazon FBA stores, has dug deep into the analytics, and has talked to the actual sellers.
When you sign up for an account with a brokerage firm, you'll most likely be asked to provide a sheet of liquid assets, including cash in reserve, stocks, and bonds. This will help them filter out listings that are beyond your budget.
Step 4: Buy the store.
Using the data you've gathered or your broker has shared with you, choose the store you want to buy. If the list of choices presented to you can be further narrowed down, most brokerage platforms have filters you can navigate. Besides price range, you can filter your search based on monetization, niche, and inventory size.
Once you're ready to make a decision, contact the seller. Many sellers are open to negotiating their price and mode of payment. Some accept financing, which they will know before you talk to them through your brokerage account details.
What to Consider When Buying an Amazon Store
You're looking for a business with guaranteed growth potential and within your budget. The only way to find one is to conduct due diligence. Here's a list of things you should include in your due diligence checklist when comparing and valuing Amazon FBA stores.
- Financial Health: Ask for the store's profit and loss (P&L). This will show you how much the store has made since launch, whether its profit spikes are seasonal or consistent, where it is gaining or losing money, and other critical financial details.
- Testimonials: Scan all reviews the store has received over the years. Find out what buyers say about its products and services. If there are bad reviews, what actions did the owner take? Ask the suppliers or subcontractors for their opinions as well.
- Amazon Account Status: Find a store that consistently hits Amazon's metrics and hasn't been penalized before. You want an account with a clean record and no restrictions.
- Competition: What is the store's standing in the competition, and how is it holding up? If the competition is too high, you might have difficulty keeping up. Choose a business from a low-competition niche.
- Suppliers: Find out who supplies the store's products and their terms. Read their existing contracts to determine how much freedom you have in case you decide to explore other options.
- Scalability: Does the brand allow for diversification or expansion to target other markets? Are the tools, methods, and processes upgradable?
Buy an Amazon FBA Store Now!
Buying an existing business is a VIP ticket to success in e-commerce. If you have the budget, don't hesitate to explore this avenue. Keep in mind, however, that with bigger investments come larger risks. Take your time in performing your due diligence to land the best possible deal.