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Most would agree that the hardest part about getting into business is starting it. Deciding what business to start and how to jumpstart it is half the challenge. But once you have a clear vision of where to take your business, it gets a little easier. You’ll have already devised a plan, implement them, and manage the progress as you work towards growing your business.
But there is one other decision every successful Ecomm/FBA business owner must determine which is just as difficult to make: to sell or not to sell?
Regardless of what your current opinion is about selling your business, at SellerPlex we recommend that you run your company as if it’s preparing for a big sale. Why?
First, when a given business is ready for sale among other things it usually means that the company has been delivering stable profits for at least two years. The larger the profits, the bigger the sales multiple.
Second, buyers want to acquire organized companies with structured and documented operating procedures (SOPs) and data, allowing less managerial effort from the owner. Essentially, a company must be able to run itself with minimal to no supervision.
Third, growth potential is an essential metric for buyers. A business with a history of growth and/or clear vision of steps to take in order to grow further will be beneficial to anyone involved - whether you are the original business owner or potential buyer.
This Roadmap to 7-Figure & Sellable Amazon Business will lead the way to growing your business to be appealing to buyers from financial as well as operational points of view.
Instead of struggling to find the best steps to take, use this Roadmap, to jump right into earning more money and enjoying your new life and your lifestyle. In the end, if you want to sell your business, this guide will set you up for that. If you want to keep it running, you’ll have a more efficient and profitable business to run.
We’ve seen it firsthand and we know there’s a way to work less, have fewer obligations, and still make seven figures on Amazon. And it’s all laid out for you right here in this guide. See more about us here.
We’ve divided this into three main parts — Administration, Logistics, And Growth. Each has a series of to-do’s for you to complete on your way.
Standard Operating Procedures (SOPs) provided in this article are available by opt-In at www.SellerPlex.com
Each step of your Roadmap is important but you don’t have to do it in order. The purpose of these action rocks build and synergize on each other, but they can also be worked on individually depending on what your business needs help with most.
If you complete all of these action steps, you will definitely have a better, healthier and more fun business that is ready to sell, if you want.
ROCK/Action Step: Create The Vision Doc For Your Business + Start Your Organizational Structure.
Your first step in making your business scalable and sell-able is to Get Organized. This cannot be understated. It is a must and a necessity—your business will never reach its true potential unless you get organized.
It may make you some money, but you’ll always be leaving something on the table if you don’t streamline your operations.
This also pays dividends down the line. Organization is an important step because well-structured businesses are easier for potential buyers or investors to understand and therefore be interested in. No one wants to pump money into a mess.
But that’s the long-term. There are benefits in the short-term and middle-term to consider when organizing.
Try this thought experiment: Have you onboarded someone in your team or business yet?
If you have, think about what was most difficult about it. Were they productive right away? Did they have dozens of questions for you? Did you have an onboarding plan ready for them, or did you make it up as you go along? Most small businesses struggle with this and it’s almost always an organization issue.
If you haven’t onboarded someone, think about what it would look like to bring someone in, today How would they do? Would they know where everything could be found? Are the important procedures and practices in your company even documented?Think about how quickly and hassle-free you could add help in if you had everything catalogued and organized.
So let’s do that. It’s the best place to start.
Organizing Yourself and Your Team
If someone was to join your team tomorrow, what’s the first thing you’d have them do? Review your products? Join a call to learn about your background?
This is a question every business owner should have an answer to—even if it’s only a loose idea to be honed later.
Hiring itself is a such an undertaking that often entrepreneurs feel exhausted after. And, confident that they found a great person to join the team, they leave the new person on their own to figure things out. This isn’t ideal.
We built a Hiring SOP for Amazon assistants that you can find on Sellerplex.com. It helps to ensure that you’ll get great talent for your team and that their motivations to work with you, and indeed their attitude, align with your business, vision, and culture.
But what happens after?
You want to fit them into your business’s organizational chart. In fact, the best businesses can pinpoint on day one where a new employee will fit into its org chart. You should be able to do so too.
The best companies can also give a proper onboarding to new team members, including providing a set of vision and values for their new company. You should be able to do the same and the ‘BIG ROCK’ for this chapter will help you do that.
“Plans are nothing. Planning is everything.”
- Dwight D. Eisenhower
Mid-term plans are important as they help to control the directions that your enterprise is taking and essentially push your business forward. We suggest you update and reevaluate your mid-term plans board every quarter.
It’s good to give a project (whether it’s a new product you’re selling or a new sales channel that you’re exploring) some time for testing and to allow the team to adjust, and find the best ways to implement a given project and receive feedback from the market.
After some time (a quarter), you can evaluate the results and put further focus on what is working. Further, you can remove things (tasks, projects, vendors etc) from your funnel that are not yielding good results.
Next, as you do your quarterly planning, prioritize your plans and set goals.
To do this, ask yourself the following questions:
Then let your team know the answers to the above questions.
Prioritizing these goals isn’t quite enough. You’ll need to do check-ins to make sure everyone is aligned. We recommend weekly team calls or meetings.
It is good to be in touch with your team and be available for questions in order to provide needed advice during projects. Weekly calls or meetings with your team will allow you to have good control over the ongoing workflow and adjust, correct, and set directions along the way.
Keep these meetings as consistent as possible so your team knows what they should bring, what questions to ask, and give everyone a chance to review the goals and priorities set together as a team.
For the same reasons that lead you to having weekly team calls, you should have one on one calls or meeting with your team members. This will allow you to get into more detail on each person’s set of goals and responsibilities.
Of course, your ability to sit down for a one-on-one call with everyone on the team will depend on the size of the company and number of employees. As your business grows, it could transform into having one-on-ones with your department managers (or C-level managers) and occasional calls with key employees.
Don’t forget that you’re also part of your team. What can you do as the founder and leader? Focus on your one thing.
As you are able to unplug, it will free up your time. So what’s the best way to use that time? Focus on the one thing that you either excel at or find what you can do to move your business forward. That could be running marketing, hiring, or product research. Whatever it is, the ability to unplug means you can flex the best muscle you have instead of being spread across all aspects. Think hard about your one thing (try a few if you need) and then double down on yourself and watch the returns of your focused labor boost your business.
Now that you’ve worked on organizing yourself and your team, you should begin to organize the operation itself. Everything above will pay off dividends as you scale and expand, but this next section will have immediate effects. It will help you organize toward efficiency and systematization leaving behind any bad habits of a chaotic past.
The best place to start, for obvious reasons, is your Amazon account. This is the central hub of your business, it should be accurate, clear, and concise. Or said another way: it should be organized.
You may close a listing at any time, up until the time it is purchased. There is no fee associated with closing a listing. The SKU is still retained and you can easily re-list a closed listing.
This cleanup will make your Amazon Seller account easier to navigate and also give it a sharp, organized look. This will be crucial in the case of an external audit (by a potential buyer, for instance).
While you’re reviewing your product listing, check in on what’s still active. Are all colors listed? Are descriptions still accurate? Here’s more information on that:
In most cases, changes you make to product information appear on Amazon within 5 minutes. However, some updates can take up to 6 hours. Product descriptions longer than 500 characters are generally updated at 8.00 am PST (4.00 pm GMT) the following day. Images may take up to 24 hours to appear on a product detail page. To edit details for an existing listing:
We recommend you do this at least once a month. Put it on your calendar. Now. Go do it. It’s like spring cleaning every thirty days. If this seems small, good! You should start small and build habits through these things. And if that doesn’t give you motivation, remember: how you do anything is how you do everything.
It is vital for you to do these steps with any parent and child variations. The value of having a clearly organized operation is full enough but this is customer-facing. You don’t want confused customers leaving your page because they weren’t able to find what they were looking for easily.
To register your brand, you’ll need three things:
If you have the means to do this, do it as soon as you can.
The biggest hurdle for most is step one: having a registered trademark. You may not have thought about trademarking your brand, but you should! That, too, comes with many benefits.
Trademarking a brand varies country by country, so check in on your country’s requirements. Or, ask us! We’ve helped businesses through this from all over the world and would be happy to help. No payment needed, just contact us through our website.
Do note that it typically takes Amazon one (1) to two (2) weeks to approve your brand registry application given that they will not require more proof of ownership from you. When that happens, they usually just ask for a copy of the Trademark License.
If you don’t have everything ready for this, put it on your to-do list (and later into your organizational chart under an umbrella like ‘Product’ or ‘Operations’). If you’ve tried to set it up and can’t quite figure it out, contact us and we’ll help guide you through it.
These Amazon steps are important. You want to have a clean and organized relationship with the site in order to move forward.
[Product] | [ship month] | [FC] | [qty]
Example: T-Shirts (TS), 3000 units, to be shipped out by March, shipping to BHX1 Fulfillment Center would be TS|MAR|BHX1|3000
Mnemonic: (what | when | where | how many)
In addition to the FBA Shipment Naming Structure above, we instruct all clients to develop the following:
Each of these will have its own nomenclature system. We use a suggested structure but often work with clients who tailor and adapt that to their needs. You should too.
This helps keep your records in order, but also helps tremendously when onboarding someone new as we discussed in the first part of this chapter.
Accounts payable can either be the bane of your existence as an Amazon seller or it can be a breeze. It’s really up to you.
What you’ll need to get to ‘breeze’ status is a good system. A good system is one that will help remind you to pay your bills to your vendors and suppliers, and the method in which you’ll do that. One method is having an assistant or team member handle this, but not everyone is comfortable delegating payments. That’s okay.
What’s important is that your system can save you time and be reliable enough not to miss payments. Because missed payments can have effects far beyond that simple payment—it could mean stock and supply problems, or souring a relationship with a good supplier.
So, a good AP system will help you save time needed for processing, be on time with your payments, and help manage your Cash Flow. One of the things we always recommend to clients is to make payments twice a week, and on the same days. We recommend Tuesday and Thursday just because both give wiggle room on either side of the week.
This task is easily delegatable and a good assistant or employee will make sure these payments go out without your strict supervision. Make this one of your ‘Weekly’ to-do’s every week, or for someone that’s helping to run your business.
When I worked at a big company, one of our unofficial mottos was “document, document, document”.
Why? Because we were a multinational company with different regions at different stages of the business. If my team did something right, we should document that so we could share with others and they can model our process. If we did something wrong, we can pinpoint exactly what happened.
This is true across any business, even if it’s just for yourself. Documenting a win or a loss and your process for getting there will repay itself down the line—especially the wins. This is especially helpful when you bring someone new onto your team or even to just help you get through a busy and chaotic day.
What you want to have for your business—any business—is Standard Operating Procedures. This is so important that we’ve made it a keystone part of our business at Seller Plex. We made SOPs for what worked for our Amazon businesses and now we’re sharing them with others.
The reason is simple: what works is valuable. That could be a product, a service, a process, or a procedure. Some of these are universal, but others are specific to one business, like yours. Look through our SOPs on our website, but most importantly, make sure you have your own SOPs.
ROCK: A Systemized Store Where You Can Find Answers In Under One Minute / or / Always Ordering At The Right Time, Never Too Much
The second big step in our Roadmap To 7-Figure And Sellable AMZ Business is to get on top of your Inventory. The basic rule of inventory management is making sure orders are done in a timely manner and to avoid running out of stocked items and unfulfilled requests. You should be able to determine when orders need to be made within a few minutes—or, better yet, have this done on a perfectly balanced cadence when certain measurements are hit.
In order to be successful at forecasting demand and making your purchase orders accordingly, you need to have an inventory system. What that system looks like will vary from person to person (though we have SOPs to help you out!).
But that’s all okay—what works for you might not work for the next seller. The most important thing is that you a) HAVE a system; and b) TRUST that system.
Without these two elements, you’re exposed to human fault every day and can easily miss, forget, or misjudge something important involving your inventory.
Here’s point one in developing your system: A good system optimizes for both cost and inventory. If you order too much and your inventory gets stuck in an Amazon fulfillment center being unsold for months, it means that your cash is also stuck in a form of this excess inventory. You’ll also be paying extra in Amazon storage fees, which can get costly. You don’t want this.
That system should be based on the level of sales per given period of time, and account for order production times (indicated by suppliers), and transit times for international shipping (indicated by FFs), possible delays, and warehouse handling.
You can run these calculations through automated calculators in Excel or Google Sheets. We also have templates available for you to freely use. Being able to project properly will help in inventory management, but don’t forget to keep records of changes that will help build your system instead of your own memory.
Below are the most important parts to your inventory management system.
The next step in systemizing is using Purchase Order Trackers to order enough supply, but not too much. As we said, it’s crucial for an Amazon seller to properly calculate the sufficient amount of stocked products, place orders, and ship at the right time. This is necessary so you don’t run out of products and don’t overpay for storage of excess inventory.
Your system should be able to help you time orders correctly. If you are having problems with forecasting, you could use our Reorder Calculator (available as part of our Core SOP package, opt in www.sellerplex.com), where you can simply input your data — such as daily unit sales, current inventory levels, production time and transit times for shipping — and it will tell whether or not you should reorder.
Place On-time Reorders by considering the production lead times and transit times. Make sure to account for unforeseen delays.
The SellerPlex team typically runs Regular Inventory/Sales Reports, reviewing stock levels in AMZ, in production, in transit and also 3PL (if it is in use) on a weekly basis.
Data on Daily Sales also goes into the reports. That way you have a consolidated sheet for all products which allows you to make a decision on reordering.
Sign up on www.sellerplex.com to access our SOP on Reorder Calculator as well as the Inventory/Sales report Template.
We highly recommend to use the Inventory/Sales report to stay on track with your inventory.
Step Three is dedicated to the importance of successfully managing your workflow with your supplier(s). Why does this matter? Because the arrangements you have with your supplier has a direct effect on your bottom line, profit margins, as well as the flow of your operations as a whole.
Imagine if you could optimize this to get better terms, better communication, and set the stage for expansion through greater supplier relationships. That’s where we want to get to. And it’s something everyone should do, because the effort can pay off significantly.
Your first step, in terms of successfully navigating this part of your business, is negotiating the best supplier terms. This is easier said than done, and some people are born with negotiation skills while others are not.
Still, to make your business as profitable as it can be, you’ll need to get good at negotiating on terms with your suppliers. It may take practice and you may face some rejection, but this is a skill that goes beyond Amazon selling. It’s a life skill.
We’ve prepared tips to help you improve on your negotiating adeptness. Our DIY document has several important talking points for negotiating terms. Use them, re-use them, and add in what you find from others. Ask other Amazon sellers you know what they’ve done to be successful and consider replicating their techniques. Remember, suppliers also want your business. It’s not a one-way street.
You’ll want to negotiate not only on the price of goods, but also on things like payment terms and added services such as FBA labeling.
This can be fun, and at the same time, one of the most effective ways to positively affect your profit margins and also cash flow. The better you get at it, the more money your business makes.
To help with this whole process, it’s a best practice to build relationships with your suppliers. You’ll always be able to ask for more (or better terms) once they are more familiar with you as one of their reliable customers.
Remember the most important aspect to the suppliers will be how much you buy. As such, as your volume grows, ask for a lower price per item, or whatever would be better for your payment terms.
Most suppliers in China will ask for 30% downpayment at the point of placing an order and the remaining 70% before shipping. However, better payment options can be negotiated. For instance, in case you are buying in bulk and shipping in full containers (FCL) over the sea, some suppliers will agree to let you make the final payment when FCL is on vessel, en route to a destination, like the USA port, prior to Bill of Lading (BL) release.
But how will you know how you’re getting good terms? Just perform price comparison, which means shoppinghop around for other suppliers If you get lower quotes, ask your current supplier to match.
As you scale, you can also consider hiring an agent to negotiate terms for you. Even small price cuts can result in big savings if you buy in bulk and regularly. As a foreigner, if you simply contact a seller via Alibaba, often times you will get higher prices than a local agent would in China.
However, be careful with your choice of agent. If you know other importers in your personal network, ask them for a referral. A poor choice of agent can bring undesired results such as delays in communication (more people in the chain, the more time spent to pass information). Added costs associated with agent work must be reasonable (compare them with potential price savings).
If you feel like you lack experience in this field or just want someone to take over supplier negotiations and free yourself from having to be responsive at late/early hours, visit www.sellerplex.com to learn how we can help.
Next, try to save on FBA labeling when possible. To do this, ask your suppliers in China to label your product for Amazon before shipping it out. Usually, they will do it at no extra cost.
In most cases, Amazon sellers have to pay additional fees for FBA labeling after cargo arrives in the US. 3PL warehouses in the US charge for this added service. (Note: This tip does not apply to shippers that prefer to buy in bulk, save on the price of goods and shipping, store goods in the US-based 3PL warehouse, and then ship to Amazon fulfillment centers when it’s time to restock. This is due to the technicalities of Amazon’s seller central—you can only obtain FBA label after your create an FBA shipment.)
Proactive communication is key in a successful Supply Chain Management. If your communication is not clear, the risk of misunderstanding goes up and you risk unforeseen costs, delays, or a lower quality of goods or services than you expect.
When one communicates with FFs/Suppliers you have to take into account things like distance, time difference, and possible language barrier. So communicate in a timely and easy-to-understand manner. Always put important things in writing.
Communicate your expectations about the product, timing, packaging, etc. to the vendor clearly and ahead of time (and again in writing). If you are lacking experience in supply chain, many terms used by suppliers and FFs might sound like computer code. Make sure you understand each and every term. Also expect that texts/emails might be coming through at weird hours. Often, you will have to answer right away to avoid delays with production/shipping, etc.
We would be happy to provide SOPs and scripts on managing communication flow with the suppliers to you as part of our DIY package. We also offer services that provide this for you entirely.
Lastly, in terms of the relationship with your supplier(s), you’ll need to do quality assurance and control. There are two ways to handle your QA/QC: You can either be proactive or reactive.
As you may have guessed, a proactive approach is always better. It is best to prevent problems with quality vs reacting to them later because of actual customer complaints. Amazon can be quick to block your product listing if they notice a quality problem.
One proactive technique every seller should do is setting quality expectations with your producer at the point of initial negotiation and/or at the time of placing an order. Put these expectations in writing on the order comments on your contract with the supplier. Then, check the quality of the goods prior to shipping out of the origin country. The least you can do is ask them to send detailed pictures of the ready-to-ship goods.
However, it is best to physically check the quality. If you have the chance to do it yourself or can have one of your employees do it - great! In many cases, this just may not be an option due to the cost of travel, so we suggest using a local professional agent in China (or whichever origin country you’re supplying from).
Cut logistics costs, when possible. Logistics-related expenses are going to be your second most significant cost-center after the price of goods. Here are a few ways to optimize your logistics in order to save money and win in terms of timing.
First, get multiple freight quotes. Shop for a freight forwarder and rates in the same general way as you shop for the best quality product at the best price.
Before you shop, it’s important to know what you are looking for. Ask your supplier for a Pack List, which must contain dimensions, weight, number of packages of the goods being shipped and also prepare info on the Incoterms (or Sales terms) that you set with the supplier. Know your origin and end destinations, of course.
Next, determine the mode of transportation—your main options would be to ship by Air or by Ocean mode. If you lack experience or understanding of the difference between transit times and prices of each mode, you may ask a few forwarders to quote on both options.
Regardless, send multiple requests with all of the above info for freight rates and compare prices apples-to-apples style. Then, track how quickly FFs respond with the price. Quality and speed of their response could be an important indicator of the quality of their future service.
Our DIY package has detailed SOPs with additional information on ways and resources to use in order to obtain the best freight quote. Reach out to us to get access.
Next, manage your logistics cost-effectively. How exactly do you do that? There are several ways!
A good business knows its finances. This is true in Amazon as it is anywhere else.
What may be different about Amazon is the number of different and variable costs that you may face, especially as you scale.
A good seller has a tight grasp on these costs; using spreadsheets to fully document costs of all kinds and revenue. It should punch out a clean and understandable number for you to see whether your business is in the red or black.
Oh, and when it comes time for taxes, you’ll thank yourself for being organized earlier on. This chapter is all about getting your finances under control and in one organized place.
“Beware of little expenses. A small leak will sink a great ship.”
Even if you are not a professional accountant, you’ll need to learn and perform key financial tasks or at least understand how it works so you can supervise when you hire someone to do this for you. Either way, it’s essential for you to stay on top of your finances.
Amazon marketplace has millions of sellers worldwide competing amongst each other, so setting up a high price often won’t be an option, if you want to make a competitive offering to the market. Therefore, in many cases Amazon/E-comm businesses have to focus on bringing their costs down.
Make sure to keep marketing efforts up as you build other parts of your business. In the end, it comes down to how well your products sell. Amazon is a great platform and has consistent shopping traffic. However, you must market your product right, service your customers, and promote your products in order to stand out from the crowd.
"Ask your customers to be part of the solution, and don't view them as part of the problem.”
- Alan Weiss, Author "Million Dollar Consulting"
Customers will message you, leave positive and negative feedback, ask for refunds, invoice, product replacements, and more. As an AMZ seller, you must respond and provide high quality service in order to keep your customers happy. If your customer service is great, clients will leave good reviews, recommend your products to others, and help you make sales!
On the other hand, if you get too many complaints or unresolved issues, Amazon can block your listings and you may no longer be able to sell. If you are having issues with any part of your customer service, we have SOPs available in our DIY package that can help you with the following issues and more:
Step Seven is an obvious one. You’ve got to manage your products. You know this. You’ve been doing it, or you know that’s part of the role of being an Amazon seller.
But how do you manage products? Or, more importantly how do you manage your products well and with systems in place to ensure success?
Focus hard on exactly what your product keywords should be. Even if a keyword ranks well, if customers aren’t finding what they’re looking for on your page, they won’t buy. See our DIY package for the procedure on using the right keywords.
Another way to get customers is through the Lightning Deals.
Customers love sales! Amazon’s Lightning Deals Promotion Section allows sellers to promote chosen products for a short period of time. This helps create a sense of urgency that will push many customers to make a purchase.
There are certain technicalities that one must understand in order set up Lighting Deals, so be sure to read through those. Once you run these promotions, you will have to monitor their performance and act according to the results. For instance, you’ll want to run similar promotions as those that succeeded.
As with any promotion, you’ll be best set by monitoring conversion rates.
Conversion Rate is calculated by dividing the number of sales by the number of visits to your listing. It is one of the most important metrics for any e-commerce website or store.
Statistics on average Amazon conversion rates vary, but it’s likely higher than most e-commerce sites. Typical conversion rates for most decent e-commerce sites is estimated to be about 3-4%, where Amazon is said to average about 9-13%. And the rate is even higher for Prime members.
Some Amazon statistics show conversion rates on products as high as 70% even. So there is no doubt that Amazon is doing its part to rise up the conversion rates. However, it does not always mean that your product will sell. Monitor your conversation rates and compare them with averages. Make changes to your listing(s) if you notice any are underperforming.
Good sellers are always monitoring their product listings, and keeping a lookout for product hijacking. Best advice? You should monitor your product listings very closely!
There are things that can happen to your listings that you’ll need to monitor as they can affect sales. For instance, part of your title, pictures, description and bullets can be amended or deleted by Amazon. Also, your listing could be hijacked by other sellers. If you notice this, you can take action by reaching out to AMZ support immediately. There should be someone dedicated to monitoring your listings consistently.
We offer services that help monitor page listings and any deals, promotions or campaigns you want to run. Visit sellerplex.com for details.
In Step Eight we’ll cover growing and scaling your business. There are straight forward reasons why most business owners put special focus and set specific goals on growth on a regular basis.
Growth is crucial for all parties involved—for a business owner seeking to grow their personal wealth, for employees looking to take the next steps in their careers, and for outside investors and buyers that want to see a growing business that has the potential to deliver returns on investment.
So let’s talk about scaling your Amazon operation.
First, to scale, you’ll want to add products and expand your portfolio.
For AMZ Sellers adding new products and expanding their product portfolio is a key activity to help stimulate business growth. See below for suggestions on how to approach New Product Development.
Expansion is all the better when you know how to pick the right product, of course.
One of the easiest ways to expand your product base is to add products of related nature to the ones that you already sell. For instance, if you are already selling sporting goods, like footballs, try to research other football gear to increase selling potential. Chances are that your existing supplier will be able to offer related products to you, too.
Importantly, you’ll want to pick products that have enough demand, but where there may be a lack of offering on the market. The goal is to find a product that fits existing demand that will be unique in some way (to stand out and gain competitive advantage).
In order to understand demand, one should perform keyword research (how many customers are looking for this type of goods, for instance). It is useful to research the amount and content of reviews for existing product offerings on the market. This will help you understand how competitive the niche that you are looking into is, and also whether customers are happy with existing offerings.
The SellerPlex team has a dedicated unit focusing on New Product Development and a set of related SOPs available as part of the DIY package.
As a sneak peek into that, one item we host is a New Product Checklist. The following checklist will help you understand a potential new product fit:
After your new product research, put together a report that allows you to make a final decision on the potential new product for your portfolio. See our DIY package for a useful template that can help you with that report.
After you add new products, it’s time to think about new sales channels. A whole book could be written about finding sales funnels, but we’ll offer some quick ideas here.
Facebook or Instagram Ads can be effective marketing tools, depending on the nature of the product and the quality of ads. Much the same, Retail partnerships can be a way to get your product in front of shoppers globally. Advanced sellers will grow a distribution network of retail stores both online and offline to maximize their products’ presence.
Adding new products or experimenting with social network advertising can be quite costly. There are a few ways to finance your growing business if you want to focus on expansion.
The first, and most recommended way to go about adding new products is to reinvest your business cash flow. If you’re already making profits, your best option is putting that excess back into business growth.
Otherwise, there are a variety of options to obtain needed amounts externally.
The first is using credit line through credit cards. Be very way of APR rates and debt piling up. This can be a killer for early business without proper planning.
If you want to go through a channel for debt financing, Brinc is a legitimate option and partner we can recommend. Another loan option is to take out an SBA loan—the US Small Business Administration 504 Loan or Certified Development Company program.
Another recourse is to take on an investor/partner. If you want to go this route, you must be ready to share part of your business. However, if you make the right choice, you may find that your partner can bring their own experience, connections, and insights into your growing business.
Selling a business is often a main goal for business founders. Even if you are just starting out, and not ready to sell at this very moment, preparing yourself for when the right time comes is prudent.
The first consideration to think about when selling is how much your business is going to be worth. To answer, you’ll need to know how to evaluate your business properly.
It is a complicated analysis and there are lots of details to consider such as business size, industry, financial statements, trends, etc. However, to put it simply for a small to a medium size Amazon or e-commerce business, typically, the value of it at the point of sales is evaluated at Yearly Profits multiplied by a 2-3 coefficient.
So if your business brings $1 million per year, chances are there may be buyers offering between $2 million to $3 million for it.
Of course, that’s dependent on a variety of other factors. Some factors are out of your control (larger market) and some are very much in your control. One easy thing to control is making sure you have your business financials in order.
Investors will look at your financial statements and results. For help on keeping these in order, see Step Five of this guide.
In addition to the financials listed and described previously, there are a few metrics to focus on specifically for selling your business.
The first is showing positive growth trajectory. We cannot stress it enough: business growth is important! Especially at the point of selling your business. See step 7 for more insight on this topic.
Next, you’ll want to be able to show multiple sales channels. It will look good for the buyers if your sales channels are diversified and at least 10% of your sales are coming from other channels than Amazon.
When it comes time to think about selling, you’ll want to look at options. One is going through business-selling brokers. Brokers let you shop around to potentially see different terms of deals. At Sellerplex, we can help connect you with brokers with a proven track record of helping AMZ businesses. Two that we’d recommend looking at are TheFBABroker.com and EmpireFlippers.
Additionally, strategic acquisition is a great way to sell your business. This is fielding or making offers to buy or sell a business within your niche. For you or a buyer, this helps take advantage of economies of scale that come with acquiring similar businesses. So if you or your broker can find buyers that might consider acquiring your business and merging it into their existing structure they may be more interested in making a quick and easy deal.
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