Buying an Amazon Business As a Growth Tool

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Coran Woodmass joins us to talk about buying an Amazon business rather selling one.

  • Why would you want to buy an Amazon business – especially as an Amazon Seller
  • This is the biggest opportunity in Amazon right now
    • Multiples are less that in other businesses right now
    • Multiple arbitrage – go and buy several FBA business, put them together and sell them for a higher figure. Increasing your net profit through increased revenue. Larger businesses acquiring other smaller businesses
  • Buy a business that is already running and doing what it needs to

What to look out for when buying and Amazon business

  • This only makes sense when you:
  • Do a stock take on you and your team
    • What skillset do you personally have as owner of the business
    • What skills does your team have
    • If you doubled your business tomorrow, could you cope?
  • Do you have access to Capital?
    • Struggle to keep up with your own inventory
    • Bank will only lend when you don’t want the money 🙂
  • Yes, you can find an investor – Coran runs a service
  • What is your goal
    • Domination of a niche – acquiring competitors
    • Looking at margin – optimized your business, turnover of inventory
  • Open to buy anything?
    • Not a good time to buy – you want your strategy bottomed out first
    • You have to be ready and prepared to make this purchase

Selective Buying

  • Make sense to acquire smaller businesses in our category?
    • One SKU s their winner and thy have a couple of others.
    • Makes sense if you want to add that line to your product offering
    • Look at doing micro-deals – putting them together and selling them on for a bigger multiple
    • The return on time in doing this with ‘small’ businesses then consider how much time is needed for finding this…
    • Integrating a new business
      • Take the listing and put it into your account as aligned
      • Do a brand transfer to your existing seller account
    • Having more than one Amazon Account
      • Reach out to Amazon and be very upfront that you suggest
      • Every case is different and so need to speak to Amazon on this

Acu-hire a team

  • Buy a team with skills that you don’t have

Sourcing System & Team

  • Buy a company for its marketing team and the strategic aspects are good
  • Sourcing and cold-outreach

Top 5ish

  1. Why do you want to acquire, can you expand
  2. How will you fund it, investor, extra cash yourself
  3. Run your numbers and get an idea for what you’re looking for
  4. Put your filters on and research then go to market – maybe wait
  5. Options when buying – a $100m – look at bigger businesses, they have borrowing or credit setup that you could actually leverage in buying it!
  6. Look at the Category or Margin approach
  7. All in your account or have a 2nd account