Building a successful Amazon business requires a lot of hard work and long hours. And most sellers are happy to do it because it can help them achieve their dreams of building a business, becoming financially independent, and being their own boss. And while most people who start selling products on Amazon don’t do it with the goal of eventually selling their business, Amazon brand acquisitions have become increasingly more common in recent years. Indeed, today, Amazon sellers who have managed to build a profitable brand can successfully sell their company to a variety of buyers. In this article, we will look over the main reasons why Amazon sellers may choose to sell their brands.
Top Reasons to Sell Your Amazon Company
Facing increasingly tough competition
Competition is one of the biggest challenges Amazon sellers face today. While a few years ago, it was relatively easy to start a business on Amazon and maintain its profitability, today, this task is becoming increasingly more difficult. As a result, many business owners are considering handing over the reins of their company to professionals.
Minimising financial risks
Running any business is risky, but if you’re selling products on a third-party platform like Amazon, the risks are especially high. After all, the platform can easily suspend your account or products at any point in time without warning. And in most of these cases, you will have no recourse and no way to remedy the situation. Plus, every business requires investments to grow, and many sellers have to take out loans to cover these expenses, which puts their finances at risk in case their business collapses or doesn’t perform as well as expected. Therefore, selling your Amazon brand is an easy way to eliminate all the personal financial risks associated with running a business.
Looking for someone with the necessary experience to take over
While you need to have a lot of skills, knowledge, and dedication to build a business, a completely different skill set is required to scale it. Founders don’t always possess this skill set or want to develop it, so they may decide to hand their company over to someone who can take it to new heights.
Being unable to fund further business expansion
In addition to skills and knowledge, business expansion requires financial investments which founders may not have access to. Amazon sellers who don’t want to go into debt to fund their company’s growth and those who fail to secure cash infusions from investors may choose to sell their companies and use the money to begin a new venture, retire, invest, etc.
Not enjoying the day-to-day of running a business
Some Amazon sellers really enjoy the beginning stages of starting a new business. They love brainstorming and launching new products, coming up with a brand concept, creating a business strategy for entering the market, building relationships with customers, and so on. However, as a company gets bigger, its founder has to spend more and more time analysing data, meeting with team members, and thinking about big picture things. And business owners who realise that they don’t enjoy this stage of the business may choose to sell their company and begin another venture.
Wanting to do something else in life
Once they reach a certain level of success, some Amazon sellers decide that they want to do something else with their lives. As mentioned above, some founders want to start a new venture with the capital they get from selling their company. But it’s not the only option. Others may want to retire, go back to school for an advanced degree, spend more time with their family, join another company as an employee or consultant, give back to the community, travel, or do something else.
Wanting to cash out
Building a company takes a lot of hard work, and there’s nothing wrong with wanting to get a big payday in return for that work. Today, an Amazon seller with a successful business can get several times the amount of profit their business makes in a year in an acquisition deal. Most founders end up selling their company for millions of dollars, and just that prospect is tempting enough for many.
Feeling burnt out
It’s not just employees who can become burnt out, this unfortunate condition affects founders too. Many business owners start out very excited to work on their company and build a powerful brand, but after a while, they get tired of constantly dealing with new problems, running day-to-day operations, and feeling like they have to be online 24/7 to make sure that their business is running smoothly. As a result, some founders want to sell their company in an acquisition and move on to something else.
Final Thoughts
Few Amazon sellers start their business with the thought of eventually selling it to an aggregator, private equity firm, or another entity. However, today many founders who have managed to build a successful business on Amazon see an acquisition as a viable and enticing exit option that allows them to get funds for starting a new venture, find more time for their hobbies and families, and minimise financial risks involved with running a business. No matter what your reasons for wanting to sell your company may be, you need to understand how to choose the right time to sell, how to maximise your exit, and how to value your company. You can find out all of this and more in our articles on Amazon acquisitions. And if you’re interested in growing your Amazon brand, you can sign up for a free discovery call with one of Nuoptima’s experts.