Jul 09 2020 31 mins 2
How do you buy or sell an Amazon business? Today we talk to an expert broker who will shed light on this question. Mark Daoust, Founder and CEO of Quiet Light Brokerage sits down with us to talk about strategy. How do you buy an Amazon business? Type of car? Budget? Buy business with weakness where you have strength Why buy a business instead of build one? Buy then build - book. Most important thing to avoid or mistake to avoid when buying a business? Product protection, intellectual property is super important. Background of Quiet Light Brokerage. 70-mil in transactions average about 1 mil per deal. Maturity phase - sophisticated sellers buying other businesses. When selling business in next 12 months, what is the prep work? 4 pillars of value Risk IP protection Sku diversity Marketplace diversity Growth How to go from 1 mil to 5 mil Reasonable ways to growth. Transfer-ability Etsy hard to transfer Vendors may not work with someone else. Licensing issues? Documentation Documentation is the largest impact. Financials - Recorded accrual highly valuable. Switches value of business hundreds of thousands of dollars. Mistakes to avoid Reasons why you should sell Feather in the cap - I sold a business If selling just for financials, don’t do it. Lower end of spectrum - want one payday. Build to hold If you’re able to sell it, it’s because someone wants to buy it to hold. Get an evaluation - 2.5-3.5 close variation of EBITA What will buyers get excited about? Object to? Are buyers excited about niche but too specific into a couple of skus vs diversified Prep Get all information that buyers want. Answer buyers questions before they ask them. Sell into the objections Average time on market: 90 days 200 inquiries per business. Several conference calls. Offers. 30-60 days of due diligence. Hopefully then close. Broker adds value Prep Navigate transaction Stressful. If you have an offer just take it, don’t use a broker. Find out more about Quiet Light Brokerage at https://www.quietlightbrokerage.com/
