Sell or acquire Amazon FBA account
Most online entrepreneurs today use additional sales channels in addition to their online store. These are usually sales accounts on the marketplaces of parties such as eBay, Bol.com and Amazon. These accounts are normally linked to the own web store so that stock and prices match. The importance of these channels seems to be increasing and sales accounts on these platforms are already seen as real 'shop in shops'. With the increase in importance of these accounts, their marketability has also become a relevant issue.
What is an Amazon FBA ('fulfillment by Amazon') sales account?
Amazon started as an online book seller: as early as 1995 Amazon started its operations and since 1997 Amazon has been listed on the NASDAQ. Since that time, Amazon has grown into a huge e-commerce company with almost worldwide coverage, which is unparalleled in the Western world. To date, Amazon has virtually not focused on the Netherlands and Belgium, although a semi-translated version of the platform has been available on Amazon.nl since 2014, primarily featuring books. The idea seems to be that we will also find our way to the German Amazon.de and the English Amazon.co.uk.
It will be clear: Amazon has a huge network and as a online business owner you can make use of this nowadays. Amazon has opened up its platform, and with it its reach, to third parties by means of so-called seller accounts. You can see these accounts as a shop in shop, as the Bijenkorf, for example, does with various brands. As a shop owner, this can be an interesting way to take the first steps abroad, for example.
These sales accounts have grown enormously, especially in the neighbouring countries of the Netherlands, making them an important sales channel for many web store owners. In addition to the regular sales accounts, Amazon also offers a full-service variant, where they not only open up the network and pass on orders to third-party sellers, but also take over logistics and customer service. Sellers then not only use Amazon as a sales channel, but also place their stock in Amazon's warehouses and have the order processing handled by them. This is called "fulfilment by Amazon" (also "FBA"). As a seller, you then only focus on the product selection and the on-time delivery of the products to Amazon's warehouses and on the marketing & sales: Amazon does the rest. Not surprisingly, this way of working has taken off. In fact, it is so popular that several investors are actively buying up and bundling FBA accounts.
To clarify the spelling: In Europe we talk about 'fulfilment by Amazon'. In America, they talk about 'fulfillment by Amazon' (double 'l'). This is not a typo: Americans write fulfillment in a different way than the rest of the English-speaking world. In the Netherlands, we are also used to the version with a single 'l'.
Can I sell an Amazon FBA account?
On our website, you will find mainly online businesses and websites that are eligable for takeover. But with the increase in the use of sales accounts, we also offer sellers of Amazon FBA accounts the opportunity to offer them on our platform: the target group for these accounts overlaps with our buyers file and they are, just like the Bol.com sales accounts, an interesting addition to the regular online businesses
Amazon FBA sales accounts are now a thriving international business but before buying or selling you should look carefully at the transferability:
Amazon FBA sales account transfer
The buyer and seller of a sales account can arrange the transfer without Amazon's intervention. The seller transfers the login of the account to the buyer, after which the buyer can change all the data himself (make sure that the bank account number is also changed!). An important point to note here is that the buyer will be asked for a TAX ID. This must be present. Especially if you are going to offer your products in several European countries and maybe even in America. Note: we hear that Amazon does not always cooperate with the transfer. So always draw up an acquisition agreement subject to a successful transfer.
An additional advantage when selling an Amazon FBA account is that there is no need to move the stock: it is already in Amazon's warehouse, only the owner has changed with the Fulfilment by Amazon account transfer.
A second concern is payment terms: Amazon pays sellers a few weeks after a consumer places an order. So, in the period before the transfer, the FBA account seller may have already delivered the order, for which the FBA account buyer receives payment from Amazon. This can be easily settled but is something to keep an eye on during the transfer.
What do I look for when acquiring a Fulfilment by Amazon FBA account?
The acquisition of an Amazon FBA account is basically a business acquisition like others, but as in every industry and with every type of business there are specific idiosyncrasies to watch out for this is of course also the case with Fulfilment of Amazon accounts Below we give in ten steps the most important tips we have for the acquisition of an Amazon FBA account:
(most Amazon FBA accounts are transferred through an asset transaction and that's where the tips go)
- The numbers are the foundation. In the Amazon FBA account you will find an income statement based on the data entered by the seller and the sales achieved on the platform. This shows the advertising and logistics costs (these are the costs that are paid to Amazon and are usually in the range of 20-35%). Provided that the seller has entered the purchase prices, the Amazon results overview will give you a first impression of the performance. Look not only at the result (the so-called "Amazon profit" which is often the starting point for the valuation by the seller, but what is actually closer to a gross margin than a net profit: costs such as entrepreneurial wages, office costs, staff costs and other operating expenses are not yet included), but also look at the trends and developments: does the gross margin increase or decrease, do the marketing costs increase or decrease. The historical developments are partly the basis for a forecast of future profits and you take over an Amazon FBA account for that.
Besides the results in the Amazon account you also want to see the regular accounting: not only for cross checks with the data in the Amazon account, but certainly also to get an idea of the other costs that are incurred. A tip we also received recently is to look for small (Paypal) payments in the regular accounts that may indicate purchased reviews: Amazon is very strict about this and it is something to be keen on in due diligence.
- Delve into the fee structure of the 'Fulfilment by Amazon' model: Amazon charges a fee for listing on the website based on the sales you make. This ranges from 8% to 20%. In addition, Amazon charges for the fulfilment part (warehouse, shipping, customer service). Depending on the product category, the total costs can be as high as 35%. That may seem hefty but keep in mind that as a seller you are only responsible for marketing and sales and the supply of the products to Amazon's warehouses. The rest will be taken care of. Nevertheless, it is important to understand the fee structure and when assessing the account of a third party: the income statement in Amazon only includes sales and direct costs to Amazon. Other costs are not yet in here, so be careful about a multiplier on the "Amazon profit.
- Amazon does not store all data. And that is a potential problem because as a potential buyer you want to be able to look back as far as possible to assess the acquisition option. For example, Amazon only stores advertising data for 3 months, but sellers will in most cases have downloaded their advertising data monthly: so request that data to be able to make a good historical analysis. Pay particular attention to trends: are relative costs relative to sales increasing or decreasing? Amazon offers the option for manual ad campaigns, but also automated ad campaigns. Analyze them thoroughly using key keywords to spot future opportunities. Also remember that with an Amazon FBA account, you are dependent on Amazon: if advertising costs increase, you have little choice but to pay more to maintain the same positions. This, we believe, is also one of the problems with marketplace sales accounts. For Amazon, the ad fees that sellers pay are now more than half of the total revenue for the platform, and count on this source of revenue to build out.
- Sellers have the option to use additional promotional features. Pay close attention to these! Sellers may have temporarily given away products or at steep discounts with the goal of obtaining better positions on Amazon. These orders are also considered regular sales and can improve positions. However, they are also loss-making sales that additionally evaporate once the promotions are over. Whether the seller has taken advantage of this can be found in the Amazon FBA account under the reports in the fulfilment section.
- In addition to marketing and sales, the supply of your products to Amazon's warehouses is very important: no (on-time) delivery means no sales and, moreover, the Amazon system will award you penalty points for not being able to deliver on time. The same goes for products that have a lot of returns and/or many warranty issues. In short: the suppliers of an Amazon FBA account are important! So inquire extensively about this: examine the supplier agreements (due diligence) and ask whether the price agreements and other agreements are transferable, Ideally, before the final transfer you will make contact with the suppliers and ask for confirmation that the current agreements will be maintained after the acquisition. Also find out what the delivery times are (you don't want to have to sell 'no' to Amazon customers) and what any unforeseen costs might be. If the suppliers are located outside Europe, as an importer you are responsible for all local registrations (including EN numbering) and all quality aspects of the products. Investigate how quality is assured at the supplier and how problems are resolved.
It is possible that the products are white label or are being imported on an exclusive basis: find out whether these agreements and rights (including intellectual property rights) have been properly recorded. This exclusivity can be regional (quite difficult with the international Amazon), per product category or per sales channel (you are the only party who sells on a specific platform).
Furthermore, read up on the exact costs that are levied when importing and the type of delivery that has been agreed with the supplier. Communication is often essential so find out what the regular channels are: email, WhatsApp, WeChat for example.
- Research who the competitors of the Amazon FBA account to be acquired are: what is their pricing strategy? In general, you can assume that Amazon gives the provider with the lowest price the best position. Many providers of the same item usually mean the start of a race to the bottom and you don't want to be a player in that. With the top-listings, you can also investigate whether Amazon itself does not also offer the products that the account to be taken over has in its range: do not compete with Amazon.
- Are you taking over an FBA account with your own products? Then make sure you also receive or license the applicable trademark and/or related rights from the seller. These rights can be a strong weapon in the long run to guard your margin.
- Investigate whether any social media accounts are registered in the name of the account/brand and ensure that their transfer is included in the acquisition agreement. Other channels for reaching existing buyers (think newsletter files) are also of value and worth investigating.
- Always ask the seller to sign a non-compete clause. This is a common part of an acquisition agreement and prevents you from being in competition with the previous owner of your new business after the acquisition....
- And perhaps the most important: conduct a thorough investigation of the status of the Amazon FBA account to be acquired: after the acquisition, you are dependent on Amazon, so if the seller has not had its affairs in order (trademark claims, poor delivery times, low ratings), the website may decide to close the account. It is therefore essential to establish that the account is in core health!
Buy or sell Fulfilment by Amazon FBA accounts via our website!
Our website has its focus on selling and buying webstores, but the acquisition of FBA accounts is also supported on the platform. As a buyer you can find the accounts between the regular offerings on our platform. As a seller, you can register on the platform in the regular way. When you register, the URL to the FBA account can be included as a reference.