At Website Closers, we often work with Amazon FBA company owners preparing to list their ecommerce business for sale.
Optional Repackaging: Soon to Be Gone?
News in the world of Amazon FBA is important for anyone who is currently developing or even thinking about selling their Amazon FBA business.
Staying ahead of the curve and being mindful of potential trends can help you to have more room to navigate, if and when changes emerge in the market place will affect your own operation of the company or how a prospective buyer will be able to step in and accomplish company achievements on their own.
Currently Amazon offers a repackaging service for anyone who is partnered into the FBA fulfillment service. This is marketed as a way for Amazon to repackage customer returns so that the item that has been sent back by the customer can be sold as new. In theory, this sounds like a good prospect and could be beneficial for certain types of products.
Amazon has a very low tolerance for buyer complaints, which means that sellers might have nervous concerns about leaving repackaging in the hands of warehouse workers. In the past, sellers have been able to choose whether or not to partner into the repackaging service.
One seller, however, noticed that going into the settings of your Amazon FBA account means that you can no longer disable the repackaging option. It can no longer be disabled even if it previously was inside your Amazon FBA account.
Clicking on the learn more help page associated with these features, Amazon states that repackaging will be automatic for eligible items, even though refurbishment is an optional service. Refurbishment services are marketed as different than repackaging.
Additional packaging services through refurbishment are available through what Amazon calls optional refurbishment. This means that FBA can re-glue, re-tape, or re-staple boxes in addition to taking off non-product labels, unnecessary tape or stickers. Apparel and shoe refurbishment could also include removing stains and odors or steaming. FBA sellers expressed concern a couple of years ago when the repackaging service transitioned to opt out.
Suspensions associated with marketing something used as new led to unhappy customers filing numerous complaints. If you’re thinking about listing your Amazon FBA business for sale and have questions about how effectively to manage this transition and set yourself up for success, consulting with an experienced and knowledgeable website broker can help you in this process.
Staying Competitive with Amazon FBA
Amazon FBA is a very popular business model. However, it has become increasingly competitive and therefore you must be at the cutting edge of your industry and be able to show how your business is viable not just now but well into the future.
This will help to position you in front of the right buyers if you ultimately decide to sell your Amazon FBA business. For current Amazon FBA business owners, establishing policies and procedures that show how you adapt and overcome challenges such as these can be extremely beneficial.
Reports have shown that millions of unsold products were being destroyed, calling the focus on Amazon into the public eye and leading to a new program that is designed to donate unsold products. Third-party sellers often keep their fingers on the pulse of what is happening with Amazon to be able to adapt and evolve their own businesses as quickly as possible, should that become necessary.
There’s plenty of research out there about the value of third-party sellers to the Amazon marketplace and having a knowledgeable and clear plan of how you intend to grow your Amazon FBA business can be powerful when it comes time to sell your company.
We recently published a post about some of the concerns about who gets the tax benefits of the program if you’re a current Amazon seller.
What is FBA Donations?
According to news reports about Amazon’s latest change, the new donations program will affect third party sellers who have inventory storage in UK and US Amazon warehouses. This is the default option for any Amazon FBA seller who needs to dispose of their unwanted or unsold products in those two companies. According to a documentary that aired in France last year, Amazon was believed to have destroyed over three million products in that country alone.
The launch of the Amazon FBA donation program is as a result of that documentary. Amazon is now encouraging third party sellers to step up to the plate to make better use of their unwanted or unsold products by finding a way to pass them on to charity.
This program recently launched on September 1st but sellers are led to opt out of the Amazon FBA donations program if they wish. UK charities such as New Life and Barnardo’s will be able to receive the donations of these unwanted products and a group called Good 360 will be the primary US nonprofit receiving these unwanted or unsold items.
Benefits of the Program
The primary purpose of this goal is not just to respond to the bad press about the dumping of old materials but to put otherwise wasted products to some use and to help the environment. The amount of inventory that is regularly dumped from Amazon’s warehouses is of concern especially since the French level of destruction reached over three million total products.
It is suspected that the number of products destroyed in US warehouses is much higher than the three million number from France. Amazon does charge 50c for sellers to return unsold inventory which is much higher than the 15c that is charged for disposal. Many Amazon FBA sellers decide to destroy their inventory for numerous reasons including those that are no longer safe or are no longer usable.
A spokesperson for Amazon shared that it is their goal to bring the number of destroyed products to zero including efforts through this newly established program.
Have you ever returned some of your products back to Amazon when you needed to dispose of them?
Are you looking ahead to 2020 and hoping that your business will be effectively sold by that time? If so, you need to be prepared to take quick action steps including potentially even hiring knowledgeable business and website brokers who can help you navigate this process.
The support of experienced website brokers can make a big difference in the outcome of your situation, enabling you to sell your business more effectively and quickly before the clock turns into the New Year. If you’re ready to start the next chapter of your life by the beginning of 2020, you don’t have to despair. But you certainly shouldn’t take on the process of attempting to sell your business all on your own. It will definitely take some work to get your business prepared for what to anticipate.
A simple plan of action that is devised and reviewed by an experienced website broker can help you figure out what is most appropriate for you. In general, there are six primary steps you need to consider in deciding how to set up your business to be sold by 2020. These can help you get your business in the right shape, attract an appealing buyer and to get the very best price, all without enabling the sales process to go on too long and not enabling you to get enough money.
Get Your Exit Strategy First
First of all, consider why you want to sell, whether or not you can afford to lose the income or live on the proceeds of the sale, and what you intend to do with your time after you transfer the business over. You’ll need to have exit strategies in place and transfer strategies already developed in order to show a potential buyer that the business is not reliant on your success and role alone. You want to make sure that you do not accidentally step in the way of holding up the business sale. The next step in selling your business quickly is to get your books in order. You should notify your accountant as well as your attorney about your plans to sell, and bring them into this process. This can require a complete overhaul of any of your record-keeping processes, and verifying that your paperwork is fully up to date. A business valuation is one of the most important steps of this process, but it can also be one of the most easily neglected.
You’ll need to be prepared with a proper business valuation before you enter the due diligence phase. In the due diligence phase, a buyer will ask many different questions and request to see the financial details that you have led them to believe up until this point. This is a crucial part of the transaction and unfortunately, where many transactions do break down. If you’ve already completed the necessary steps for pulling together a business valuation with the help from a team like Website Closers, you already have this documentation organized to be able to support the due diligence phase.
Professional advisors can help you navigate any challenges that emerge during the due diligence part of the process. Asking your website broker upfront some of the questions that a buyer is most likely to ask about your company and how best to handle these can assist you with identifying any red flags ahead of time and attempting to resolve them.
Once your business is listed for sale, it will need to be marketed. Partnering with a broker like those at Website Closers can help you understand the important role that is played by outside party with an existing network of qualified and experienced brokers. Knowing what you have to look forward to can assist you with listing your company of sale sooner rather than later.
While plenty of people who have stepped into the realm of fulltime Amazon FBA business ownership are now thinking about the potential to sell their company since they have gotten it to a certain profit point, there are many others who are running their Amazon FBA business as a side hassle.
Do I Have to Run This Company Fulltime?
The amount of time that you dedicate to growing your Amazon FBA business does not necessarily require that you work fulltime in order to scale a successful company that is ready for sale. In fact, it could be even more appealing to a potential buyer that you have a company that is ready for sale that has not taken up the majority of your day to day scheduling.
Plenty of people are exploring the option for an Amazon FBA business as a side hustle and someone interested in stepping into a proven product space might benefit from the work you have already done to build up your Amazon FBA business. There are seven different steps to get started with an Amazon FBA business and many of these can be overwhelming for an outside party to consider.
When you have essentially done all of the work in setting up in picking the product niche, engaging in product research, establishing the brand, and advertising products; you can showcase your business’s potential to a prospective buyer. Because most of the leg work done in establishing an Amazon FBA business is created at the beginning, showing that you already have established systems, processes, and strategies in place for consistent and successful success as an Amazon FBA business gives a great deal of peace of mind to someone who is thinking about purchasing your company.
This is because someone who is stepping into purchasing your Amazon FBA business is essentially buying your brand. Established brand themes and taglines might even be sold alongside your Amazon FBA business. You’ve already done all of the work in establishing niched sites, PPC advertising and building your company up to the point where it is a thriving side hustle for you.
Making Your Business Appealing
This can be especially appealing to someone who is thinking about starting their own business, but is nervous about some of the traditional risks associated with launching into Amazon FBA. Incomes from running an Amazon FBA business run all across the board. While some people who are just getting started with Amazon FBA can see a return on their investment and grow their company quickly in the first couple of months, others will need a longer period of trial and error to get things right.
So, now you can see why someone who is stepping in on the outside would be interested in partnering with your business and getting the benefit of all the hard work you put in with your sourcing team, your virtual assistants, and testing your various ideas at the outset of running your company.
We recently posted Amazon’s news about FBA donations. The purpose of this new program is to allow donation of returned products or excess products to Amazon for those sellers who use fulfillment by Amazon. This allows sellers to get rid of unnecessary or unwanted inventory and Amazon then takes these products and returned items and transitions them to charities where possible.
Should You Use The Donations Program?
Those sellers who participate in fulfillment by Amazon previously had to pay fees to have the market place disposed of their unwanted inventory. That also included overstocked products and returns.
Amazon could dispose of that inventory by evaluating it and then pushing it out to liquidators who could re-sell it or destroy the inventory entirely. Partnerships with numerous charities mean that Amazon gets a PR boost by enabling the FBA donations program, but sellers should not assume that this is without any potential consequence for them.
Who Gets the Tax Benefits?
Many sellers were confused about who would be able, for example, to take advantage of the tax write-offs for those donations that are made through the program. No seller should make assumptions, and should instead consult directly with their accountant about whether or not it makes sense to participate in the Amazon FBA donations program.
Merchants might not be able to report both the donation and the removal of inventory. Removing items from an inventory was a write-off itself, so therefore sellers should be advised about the dangers of potentially taking both and complicating their tax situation. In the help file associated with this, Amazon clarifies that they are not able to provide any tax advice to those sellers who participate in the FBA donations program, and encourages Amazon FBA sellers to instead discuss their tax reporting obligations with their accountant.
Given that the Amazon FBA donations program has already launched on September 1st and that sellers can now disable FBA donations in their FBA settings, it might be wise to consider whether or not benefitting charitable organizations is in your best interests and comes without any strings attached. Amazon states that they will automatically make any eligible inventory items available to charitable organizations if the Amazon FBA seller has opted in to dispose of returns, unwanted products or overstock.
Any inventory that was selected for disposal manually will enable the donation option in addition through automatic disposal settings. The company states that their usual disposal fees will still apply. Make sure you understand the pros and cons of potentially going this route with your unwanted or excess inventory. If you’re thinking about selling your Amazon FBA business, contact us today for a consultation about how to leverage your policies, procedures and existing stock to become as appealing as possible to a new buyer.
Putting together all of the work to launch a startup can be overwhelming and exhausting, and suddenly realizing that this is a path you no longer want to be on can be an eye-opening experience.
When the appeal of selling your start-up business becomes too hard to resist and you consider the temptation, a knowledgeable business broker like those working at Website Closers can assist you with making the process seamless, easy, and a way for you to obtain maximum profit from the sale. According to the Kauffman Index of Startup Activity, over 550,000 people become business owners every single month.
When the appeal of selling your start-up business becomes too hard to resist and you consider the temptation, a knowledgeable business broker like those working at Website Closers can assist you with making the process seamless, easy, and a way for you to obtain maximum profit from the sale. According to the Kauffman Index of Startup Activity, over 550,000 people become business owners every single month.
Many of them are starting not just to build a life-long legacy and to scale a company, they’re looking to sell a business in the future. Entrepreneurs who develop successful businesses and then partner with experienced business brokers can make significant money selling these companies, but a lot of work goes into the process of making the company prepared for the right sale.
For example, finding the right buyer can be a very difficult one if you do not have an existing network. The transaction can also become even more complex the more expensive your business is. This is why plenty of people turn to the process of speaking with an experienced business broker when thinking about selling their start-up. A broker can help to facilitate the transaction and remove a lot of the red tape and confusing aspects of selling a business. It can also lead you to the closing of the sale sooner rather than later.
Of course, using a website broker is your personal choice. You will have to pay the broker a commission for their role in facilitating the sale, which can certainly eat into your business profits. However, working with a broker can speed up the process and more importantly, empower you with navigational tools and options once you are in the midst of the due diligence phase.
A good business broker can eliminate a lot of the unnecessary interactions associated with selling your business, and the best brokers will also be able to screen out people who are not in the right position or are willing to make a true purchase. The right business broker can help you to craft a compelling narrative all about how you got your business started and why now is the right time for another person to step in to sell it. Make sure that you ask about the broker’s marketing practices, previous experience, and ask for referrals and testimonials.
The right business broker will be able to provide you with this information easily and can help explain to you why they believe they are perfectly positioned to assist you with selling your company. The process of selling your online business or start-up can be very appealing, but this is not a process you should undertake without first consulting with someone who has been there and done that before. The right broker can make this process exciting for you and allow you to still continue running your business and putting in place the next steps of your future ventures while the sale is still active.