Transferring an Amazon FBA account

Transferring an Amazon FBA account

It’s no secret that Amazon doesn’t like talking about transferring Amazon FBA accounts. In fact, their terms of service technically do not allow FBA accounts to be transferred, but this hasn’t stopped people from being able to buy and sell their FBA businesses. Our goal at Flippa is to remove the barriers between buying and selling of all online businesses, including Amazon FBA businesses. In one of our more recent sales, we worked alongside Amazon Seller Central representatives and were able to capture the exact steps necessary to transfer an FBA business. Here are the steps to transfer an Amazon FBA business:

Step 1 – Update the Primary Email

The first step is to update the primary email of the account over to the new owner. This can be accomplished by going into your account settings and under the related links section, selecting “Login Settings”. Once you’re on the Login Settings page, you can edit the primary user email ID and password. It is recommended to discuss with the new owner which email they prefer using, and then setting the password (and making sure to write it down!). Now that a new email and password has been set, the new owner should be prompted with an email saying the account has been transferred to them. Now provide the login information to them, as they’ll need to finish out the rest before the transfer is complete. (Note: If you’re also transferring the email account, it is recommended to change the password and then give them the login information.)

Step 2 – Have New Owner Complete Tax Interview

Now that the new owner has control of the account, it is up to them to complete the tax interview. This is standard process when updating the business information of an FBA account. The tax interview can be found by going to account settings page and clicking “Legal Entity” within the Business Information section.

Step 3 – Update Bank & Credit Card Information

Once the tax interview is completed, the new owner will need to update both the “Deposit Methods” and the “Charge Methods” which can be found on the Account Settings page underneath the Payment Information section. Once these three items have been completed, the new owner will now have full control of the seller account! If you’re curious about the original contents of the email from Amazon Seller Central, here it is:

I would like to inform you that the seller of a particular account can provide all the authority over the account to someone else by simply updating the primary email address and re-taking the tax interview and updating the bank and credit card information of the other person to whom you would like to sell.   Kindly know that, to update the primary user email ID, all you have to do is go to account settings> Login settings (under ‘related links’) section. Once the page is opened, you can edit the primary email ID and the password. You can update the primary email ID section with that of the email ID of the person that you wish to sell to.   Secondly, ask the other person to go through the tax interview once again (tax interview is nothing but the initial process that you had to undergo to update the business name.. etc..) in the Legal entity link under the ‘Business information section in the account settings page.   Once the other person completes the tax information, he can go ahead and update the bank details and the credit card details in the ‘Deposit methods’ and the ‘Charge methods’ respectively under ‘Payment information’ section in the account settings page.   Once the other person completes all of this process, the account will be under the other person’s control with the bank, credit and email information all will be under the other person’s name.

It’s important to note that the transfer process may differ depending on the circumstances of each Amazon FBA business. It is always recommended to contact Amazon Seller Central before transferring ownership of an FBA business.

Sold on Flippa: Cases Tech

Sold on Flippa: Cases Tech

Platform: Website

Business Model: eCommerce

Business Age: 1 year

Sell Price: $30,000

 

What is Cases Tech?

Cases Tech is an eCommerce business that sells high-quality phone cases and phone accessories. This fully automated, dropship business model sells over 40 different types of covers and phone cases. These include leather cases and phone covers in animal print, glamour, floral and other more simple designs. Cases Tech best selling products include a leather case that fits credit cards, a magnetic phone holder and an ultra slim silicone cover.

The business has enjoyed strong sales, with annual profits of $29k. A well laid out website, high-quality products and excellent customer service have all contributed to this.

We asked the buyer of Cases Tech a couple of questions around why he bought the business and what’s his plans are for Cases Tech. 

 

What was attractive about this business?

I was interested in the business strictly because of the seller. I follow Irene and received notification that she had another listing for sale. I was in the running for one of her previous listings and her communication with prospective buyers in the comments section was excellent. While I didn’t win that auction, I knew that she produced a quality product and was determined to acquire her next project. So when CasesTech hit the market, I performed quick due diligence on the site and contacted her to negotiate a BIN price. The rest was smooth sailing and the site is running great.

 

What are your immediate plans for the business?

My immediate plans are to enjoy the turnkey site as it requires minimal effort. As a working professional, I needed something that was already running smoothly. I plan to scale the business by adding new products and implementing Facebook marketing.

 

How long have you been looking for a relevant business?

I have been looking for a business for about 5 months and will continue to evaluate quality assets in the future.

 

 

To find other great businesses like this one for sale, check out Flippa.com

Seller interview – Business selling cremation urns and jewellery

Seller interview – Business selling cremation urns and jewellery

Looking for an established business, in a booming industry with monthly profits of $38k? We recently sat down with the Asha Martin, the founder of an eCommerce and wholesale business sells cremation urns and jewellery worldwide. In its 12 years in operation, the business has continued to grow and evolve. Their pets category which includes urns, keepsake pendants and tags, is currently experiencing significant growth. 

Asha started a funeral products business and was inundated with requests for urns and cremation jewellery, seizing a gap in the market. What does it sell?

The business sells funeral accessories and memorial books, cremation urns and keepsake memorials. Their collection can be used for adults, pets and includes a selection of biodegradable urns for the environmentally conscious. 

Interview with seller Asha Martin 

What is your background and why did you start Life Cycle Urns?

At the age of 23, I started my first own small business as a furniture upholster. A year before selling the upholstery business I started the funeral products business. The business first opened as a retail online store. It grew steadily over the first few years and soon enough I added B2B wholesale sales. 

We kept getting requests for funeral urns and cremation jewellery. The funeral homes wanted better quality products at cheaper prices. There are only so many times you can hear the same request over and over again before I thought RIGHT, I’m going to find a way to make it for you!I set about designing a range of different funeral products which we continue to have made at our factories in India and China to this day

For many, this industry will be unfamiliar. Tell us a little about the industry and why people choose Life Cycle Urns?

We operate from a medium-sized warehouse with upstairs office. We hold bulk stock of over 130 different types of funeral urns for ashes and jewellery that has a hidden void for storing ash. Cremation jewellery is very popular, we sell thousands of pieces a year. 

Our company has grown and gained momentum over the years because of our constant focus on supplying high-quality products, great customer service and shipping out orders at lightning speed.

How does the business make or acquire the product?

Over the past 12 years, we have formed trusted relationships with our factories in India and China. Its first name basis stuff and that’s the way we like it. Having good communication with our factors is so important, otherwise, it would be very difficult to manage. We have independent QC on the ground in each country to check each other which means we get the high-quality finish we are after.

 Who are your paying customers?

We supply a range of different customers from the general public via our retail eCommerce store, funeral homes, pet crematoriums, cemeteries, crematoriums, jewellery stores, online stores. We are also about to start supplying a US wholesale funeral products distributor which is very exciting. The market in the US is ginormous compared the to Australia to the potential for things to explode over there is unreal.

How have you acquired customers to date? Where do they find you and why do they use the service?

Our main way of acquiring new customers has been a combination of direct mailing our catalogues, website SEO and trade shows.

What are the biggest challenges in this business? What would I want to know if I was starting this business from scratch?

The biggest challenge is keeping track of stock and manufacturing all of the different lines we carry and supply wholesale. Some weeks certain products just fly out the door like hot cakes and we can’t keep up.

What do you think you have done really well to date? What have customers been really happy with?

I am most proud of our range of exclusive designs. Seeing these items sell really well and having happy customers who buy them regularly really is a pleasure. Our customers have come to rely on us for being able to provide them with high-quality funeral products and the fact that we delivery so fast just makes the service so much better

 What is your best seller?

We have a number of best sellers. Our range of premium cremation jewellery and also our stainless steel cremation jewellery sells really well. Our pet crematoriums love these items and buy large amounts regularly from us. They are small and cheap to ship so I like it when the jewellery sales come rolling in.

Where do you distribute to?

We distribute Australia wide which is our core market. We also distribute to HK, NZ, USA, UK and Canada.

Why do I want to sell if you love it so much?

I’m a creative, this business is built now and is ticking along nicely. I need to build and create something new. If I’m not learning, I’m not living life to the fullest. This is a brilliant industry, the people are warm and easy to deal with. 

What sellers need to know about valuations

What sellers need to know about valuations

There is no shortage of motivated buyers on the lookout for great online businesses. While the stock market is highly volatile, there is increasing enthusiasm for investment or purchase of online businesses. So, the potential appetite for buying is enormous. However, by far the major brake on buyers committing to a final purchase decision is their uncertainty about pricing. There is little understanding of sound valuation principles and buyers are wary of what they see as pricing based on an arbitrary multiple of net profit. Not to put too fine a point on it, buyers believe that sellers generally over-value their businesses and they find it hard to define a reliable and objective valuation method. The outcome is that too often an enthusiastic and highly motivated buyer fails to follow through with a final purchase because of the understandable anxiety about paying more than the business is worth.

How to value an online business

Typically with an online business, there will be little or no inventory to value and only a very limited if any physical asset base. Accordingly, the business will generally be valued almost entirely on the projected profits, calculated on the basis of current and relatively recent past profits.

While there are various alternative techniques for valuing an online business, including the traffic valuation method for sites with high traffic as a business asset but with no or incomplete monetization, many of these methods are highly technical and yield disputable outcomes. They are often suitable only in highly specific situations, depending on a precise definition of the particular revenue model, current and projected OR you are the next Facebook which is highly unlikely.

For that reason, online businesses are almost always sold on a negotiated value based on an earnings multiple or a price to earnings ratio. While it is very common to define the ratio in terms of a multiple of average net monthly profit, it is simpler for most purposes to quote the ratio as a multiple of annual net profit. Using this basis, average asking price multiples have increased from 2.4 in 2010 to around 3.4 now (sourced from our good friends at Centurica), with final selling prices typically at around a 10% discount to the asking price. This suggests that generally speaking sellers who value their businesses realistically can expect to achieve a sale outcome within reasonable range of the asking price. But putting a realistic value on the business is complex and there is an understandable tendency of business owners to over-value their business.

The average net profit multiple varies markedly from one kind of online business to another and also depends greatly on the specific market niche. However, the absence of highly consistent profit ratios can cause buyers to be both surprised and sceptical about the valuation proposed by a vendor. On objective grounds SaaS and e-commerce businesses sell for a significantly higher profit multiple than content-based or media businesses, because of the higher reliability of recurring income in the former models and the generally much higher operational time demands in the latter cases.

As an example, a currently listed relatively small SaaS business (not on Flippa) with a claimed $55k net annual profit has an asking price of $250k, a hefty earnings multiple of 4.55. You would expect that ratio level to make any buyer hesitate. Let’s assume it doesn’t have rocket ship growth (doubtful because they are selling) a buyer simply will not pay that amount.

Vendors who are seeking to sell at an earnings multiple above the prevailing average need to factor in the understandable buyer nervousness and be sure that the audited income and expenses figures are going to stand up to serious interrogation. While there is never an absolutely guaranteed success in any investment decision very few buyers overall, and virtually none in the six and seven figure range, are interested in taking a wild gamble on getting value for money.

The valuation factors that buyers will weigh up

Because it goes without saying that buyers generally regard sellers’ asking prices as inflated, it’s important that the vendor has realistically priced the business having regard to all the considerations which the prospective buyer will be factoring in.

The income figures must be accurate and cover the duration of the business operation, including only those income streams which will fully transfer to the new owner with the sale. Gross and net income trends will be crucial to the buyer’s assessment. All expenses must be transparently declared in detail, including all payments made to service providers and suppliers of goods and expertise. It is vital to new owners that they will be able to maintain all of the necessary business operations within the same cost structure, or ideally achieve some savings where possible. Any outstanding expenses or other debts transferring with the business obviously must be declared.

Absolutely all operating expenses need to be disclosed, not disguised, by the seller and discoverable by the buyer. Often overlooked, the full value of any unpaid work which has been invested in the operation of the business will be accounted for in the buyer’s own valuation of the business. The predicted cost of the new owner’s time, and any specific technical expertise required, will significantly affect the buyer’s business valuation. It is absolutely essential to the prospective buyer to be able to rely on an honest declaration of the time and expertise required to manage the business, as the new owner will need to put a dollar value on this expense.

The prospective buyer will need to analyse all the financial indicator trends over the longest time frame for which the figures can be produced. Sources of customers and the cost of gaining them will be important factors for the buyer, as will the effects of any changes to attracting traffic such as Google algorithm changes or even penalties which may affect search traffic.

The buyer will need to assess how competitive the niche is and whether there are barriers to the entry of competitors, which raise the business valuation, or the likelihood of increased competition in the absence of any significant barriers to entry, which will lower the valuation. It is crucial to the buyer to ensure that any licences required are fully transferable, or readily obtainable by the new owner, and that any branding, trademarks or other unique advantages will transfer with the sale.

The seller needs to appraise the business through a buyer’s eyes

The seller will be keenly aware of the time, energy, money and vision which has brought the business to its current status and positioned it for a successful sale. Naturally the vendor wants to achieve the highest possible price. However, seller over-valuation is the prospective buyer’s biggest turn-off. It really enables the sale process if the current owner evaluates the business using the same valuation indicators that the buyer will be applying.

It is worth mentioning that some buyers will apply a discounted cash flow (DCF) measure in their valuation. This is a somewhat less relevant consideration in an era of low inflation as at present, but put simply the principle is that a dollar of profit now is worth more than a dollar will be in the future, so a formula is applied to compensate by lowering the notional future profit value, given that the buyer will be paying in advance the equivalent of some years of projected net profit.

The bottom line for the buyer is that the online business acquisition must be fully transferable, it must be sustainable, it must have scalability, and above all it must be purchased at a reasonable earnings multiple. While it is still relatively unusual for an online business to be bought using funds from an institutional lending source, lenders may place a ceiling on the multiple, determined by the actual business model and specific market niche.

Overall, to achieve a reasonable pool of potential buyers interested in undertaking onerous due diligence and finally negotiating a fair sale price, sellers need to keep their initial asking price close to buyer expectations. Avoid ambit claims with the view that eventually you will negotiate down. The process of carefully considering a purchase is time-consuming for the prospective buyer. The factors outlined above will determine where the buyer expectation sits in terms of an earnings multiple. There are so many variations in play that the ratios will vary between around 2 and 4. There would have to be exceptional circumstances taking a selling price outside this already wide range.

Know exactly why you have decided on your own seller valuation, and understand what the buyer will be factoring in. Your initial asking price should not be more than 10% higher than you believe on reasonable grounds the buyer will consider fair after all due diligence and consideration of all the factors covered here.

It is very clear that a reasonable seller valuation is always the key to a successful sale.

 

How does Broker Matching work on Flippa?

How does Broker Matching work on Flippa?

Flippa’s business broker network

Flippa partners with a world-leading network of business brokers. Each of these brokers has been reviewed by Flippa and hand-picked to represent our ecosystem of high-value business owners. We’ve chosen them because we believe they can help you better prepare your business for a sale, liaise with buyers and ensure you get the most out of the Flippa platform. When you join and choose to list your business for sale on Flippa we offer two options; either ‘Self Service’ or ‘Broker Matching’. The big difference between the two relates to the value of your business. Businesses over a certain value will tend to require a little more time and effort to sell and a broker is there to help. They’ll take on the process. They will work review your valuation, work with potential buyers, help prepare critical paperwork including the necessary prospectus, field offers and manage the DD process which can often be time-consuming and cumbersome.

So how does Broker Matching work? 

If you choose Broker Matching Flippa will:

1. Review and categorise your business Flippa will ensure your business meets the relevant criteria, request some additional detail including a current accountant verified P&L and ultimately categorise your business by size.

2. Match you up with up to three business broker This part of the process involves us reviewing our broker profiles and ultimately picking the most relevant broker for you. We’ll tell them a little bit about the business and review their fit.

3. Invite brokers to review your business and register their interest Once they’ve been assessed for fit we’ll invite them to formally review your business. They’ll sign an NDA and be given access to some key data.

4. Set up a ‘Meet the broker’ call Finally, it’s your chance. Talk with up to three brokers and make your decision. Once you have decided your listing will be converted to a ‘Broker Managed’ listing. Your success fees are fixed unless they have otherwise been negotiated, and from there, brokers will handle the Flippa marketplace and associated services.

If at anytime prior to your listing being converted you wish to opt for self-service instead simply contact [email protected]. Good luck. It’s a big decision to sell your business and regardless of the service you select Flippa will be with you every step of the way.

Seller showcase: Dion Lovrecich, oktoberfest.com.au – eCommerce business for sale on Flippa

Seller showcase: Dion Lovrecich, oktoberfest.com.au – eCommerce business for sale on Flippa

This week we caught up with Dion Lovrecich, who along with his sister Andrea, are the owners of business oktoberfestcostumes.com.au. The business is currently listed on our Businesses For Sale page if you would like to check it out. Here is the full conversation below. 

Background of the business 

Tell us a little bit about the background of oktoberfest.com.au? I understand your sister is involved in the business in some way?

Yes she is and we can’t believe how this has taken off! Within three months it’s doing $60,000 in revenue and has already made $14,000 in profit. This is my sister Andrea’s business and I’m helping her sell it. She’s had ten years experience in costumes but always in a bricks and water capacity. I told her she had to take it into an online capacity and I was open to helping her since I have worked in digital marketing for years. Within just a couple of months, it absolutely took off and we are still getting sales even though October has finished now.

 

That’s probably a big question and tell us more about your customer base? What do you sell on oktoberfest costumes.com.au?

We sell a traditional German costume with the ladies wearing a dirndl and gents a lederhosen. These costumes are actually used all year round which many people don’t realise. In truth, this a highly seasonal business and we did more than 800 transactions over the last two and a half months. The thing is, customers still come through, but if I’m being honest it is a seasonal business. It has achieved huge growth and the potential is there for someone to build the business with other types of costumes or for a buyer to attach the business to something else.

 

The customer base and how this was grown

 

There are customers coming through thick and fast from the October period, in celebration of Oktoberfest of course. As you have said, the opportunity for the new owner is to obviously take it on in its current form but is it also to grow this into a generalist costume business?

Yeah, it could be a generalist costume business or it could be a closer niche to German costumes or you could pick another niche entirely to get into. There is a lot of organic traffic coming through and we have used social very successfully, along with some paid advertising too. The combination of the two was such a beautiful start. Andrea and I are keen to sell it but she is torn because she wants to keep the business given the phenomenal results we have seen in the first few months. At the end of the day, we’ve decided ‘let’s do this, it’ll be good for you (Andrea)’ and hopefully, we can find the right kind of buyer. Andrea wants to pass the business onto the right buyer.  

 

The business opportunity and marketing efforts to date 

 

Fantastic, when we talk about buyers, we here at Flippa often educate buyers and tell them to make sure that they know how the business is acquiring customers. So from the perspective of Oktoberfestcostumes.com.au, how has it been so successful early on? What are your marketing methods?

You can’t be that successful without paying for traffic. If you see a website that says they don’t pay for traffic and claim to have thousands of viewers, ask them a few questions. In fact, ask the guys at Flippa, they’ll help you out with that.

 

So you guys are buying keywords around the Oktoberfest period and around no doubt the specific product units so lederhosen and dirndl. You mention social, so how has social been beneficial? What platforms have been working for you?

It has been Incredible and the cost per click has been so low. There can be a lot of industry terminology that people throw around. But, at the end of the day, the cost per acquisition/cost per sale was exceptionally low. People liked the adverts, and they were being shared a lot on Facebook and Instagram and that’s how we built the business so quickly.

 

Andrea and Dion’s business is now on Flippa and its Oktoberfestcostumes.com.au. This successful start-up is six months old and has already made $60,000 in revenue. Make sure you check this profitable listing out.