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Jaco

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The question refers to wether or not buying an Amazon FBA business off of Empire Flippers is indeed short-cutting the Process Principle. It’s obviously a rhetorical question in and of itself, but I feel that it’s still worth asking, especially if I can get any views from those who may have bought a small business and been able to grow/scale it beyond what it’s founder did.

I’m in the sourcing/sampling stage for a product that I believe will sell well on Amazon and Shopify. That said, the amount of time I have to dedicate to this per week has been limited by a very demanding job, and wanting to maintain a close relationship with my wife and kids.

I’m fortunate in that I do have the $50-100k that might be the buy-in for an existing FBA business purchase, which would leapfrog the initial heavy lifting of getting a product vetted, sourced, listed, and proven, and would put me immediately I nto the latter stages of optimization, scaling and strategy.

Of course the question is begged, “why would any business that provides $3-5k per month in income for minimal upkeep be for sale?” Seeing these sold on Empire Flippers at ~30x multiple.

Any views or opinions, especially those with (negative/positive) experience buying a small business are hugely appreciated.
 

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sparechange

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I belive theres some people on the forum that have flipped eCommerce stores before, not a bad gig if you know what your doing.
 

Phikey

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Definitely not cheating but be very careful that you do your due diligence before you buy. It does help if you've built an ecom store before so you can come to the purchase with experience but also fresh eyes & perspective on the store. You'll be surprised at what opportunities you can find laying right out in the open in a store someone is trying to sell because they see no use for it anymore.

I'd love to hear others weigh in on buying an Amazon FBA store. My experience is in growing and buying Shopify stores and working on growing the brand.
 

Antti

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Of course the question is begged, “why would any business that provides $3-5k per month in income for minimal upkeep be for sale?” Seeing these sold on Empire Flippers at ~30x multiple.
Some of those businesses were probably created to be sold right from the start. Sometimes the owner just wants to exit and do something else for a change. Who knows.

You say 30x multiple, I assume that means it would take 30 months to break even, if the profit stays the same. That is actually a fairly long time. Nothing is certain on Amazon (or any marketplace). Trends come and go, competition gets tougher etc. For example, your niche brand might be making $5k a month in profit but then your Chinese manufacturer starts selling direct on Amazon and your profit goes down to $500 a month.

Besides, like always, you should be very wary of any income claims. It is actually very difficult to 100% verify the profitability of an Amazon store. For example, how do you know that they haven't been running outside Amazon ppc ads just to pump up the revenue and supposed profit before the store is put for sale? Amazon only provides information on page views but doesn’t tell you the source.

I would only consider buying an Amazon FBA business if I had a clear idea how to maintain and develop the brand and product line. I think in most cases it's better (and cheaper) to learn by building your own business first.
 
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lowtek

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I wouldn't say it's cheating exactly, but it can be a costly mistake. If you haven't made any money online, then your experience base to draw from is very limited.

If sales start to fall, what's your plan? When other people enter your space, what's your plan? When sentiment turns against goods produced aboard, what's your plan?

It may very well put you at a later stage of the business, but don't go into it thinking that later stages of a business are problem free.
 

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Not cheating, but running an eCommerce business in a highly competitve space isn't exactly easy. If the "process principle" don't get ya on the way in, it will get you on the way out.
 
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Jaco

Jaco

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I wouldn't say it's cheating exactly, but it can be a costly mistake. If you haven't made any money online, then your experience base to draw from is very limited.

If sales start to fall, what's your plan? When other people enter your space, what's your plan? When sentiment turns against goods produced aboard, what's your plan?

It may very well put you at a later stage of the business, but don't go into it thinking that later stages of a business are problem free.
Much appreciated on the view
 

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Jaco

Jaco

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Not cheating, but running an eCommerce business in a highly competitve space isn't exactly easy. If the "process principle" don't get ya on the way in, it will get you on the way out.
Right. Thanks for that. I guess getting there the hard way (aka organic creation) must increase the odds of surviving what comes. Navigating the desert of despair is proof that the determination is there.
 

Sanj Modha

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Buying a business is a great way to kick-start.
I wouldn't buy FBA though, Amazon can shut you down in an instant.
Good point. Check the Amazon TOS before you commit to anything.
 

Kak

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Is Buying Cheating?
NO!

As long as you are engaged in win-win capitalist transactions, buying and selling businesses is VERY fair game.

The money is still green. The freedom it affords you is still the same freedom. It is business, just a different start.

IF you find a deal you like... with numbers that work for you... and you fully consider your exposure... buy it without any consideration to the nonsensical notion that it isn't "the right way."

This is not to say that you can't screw it up. So consider all of the headwinds and tailwinds.
 

Sanj Modha

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What did you hate about it?
Oh boy, where do I start:

1 - Seller Central was complete shit and counter-productive. I spent more time watching YouTube videos or emailing support vs listing products.

2 - I was selling consumer electronics (mostly Bluetooth shower radios and some other products too) and the batteries were a constant headache. I had shipments blocked by US customs on several occasions.

3 - Amazon controls EVERYTHING. I couldn't personalize the packaging, they wouldn't give me the buyer's list or let me install a FB pixel so I could run ads.

4 - Amazon kept squeezing my margins by increasing their fees.

In the end, I didn't sell my business. I left when I started hearing about a new e-commerce platform called Shopify.

I created my first Shopify dropshipping business in 2015 selling outdoor/prepper stuff and I did that for about 2 years before branding the store/products, ordering inventory and doing it properly.

Now we ship all of our products from a 3PL in the US.
 
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Kak

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I sold on FBA for 2.5 years and hated every minute of it. I'm sure there are other sellers who feel the same.
Yep. Just checking in. :rofl:

FBA is a market of feeding sharks. The only real way to get ahead is to turn it into a science and become a numbers genie. You also have to prime the pump and that takes eating negative cashflow, which to me, makes it speculative. Some people have it down enough that they can pretty accurately predict what will and wont be a success on FBA... But that isn't me. There are people on this forum that have done well with that. I prefer lower competition and/or high differentiation businesses.

Let's put it this way... There is no longer anything "easier" about FBA than other business models. That ship sailed 6-8 years ago.
 
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Sanj Modha

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Yep. Just checking in. :rofl:

FBA is a market of feeding sharks. The only real way to get ahead is to turn it into a science and become a numbers genie. You also have to prime the pump and that takes eating negative cashflow, which to me, makes it speculative. Some people have it down enough that they can pretty accurately predict what will and wont be a success on FBA... But that isn't me. There are people on this forum that have done well with that. I prefer lower competition and/or high differentiation businesses.
I feel very strongly about Amazon - it's not a business. It's a sales channel.

People who say they're "building a brand" on Amazon are kidding themselves. Yes, you're building a brand - Amazon's brand.

I'm not saying you can't sell on Amazon. I did it but what I'm hearing from friends who still sell on FBA - it's savage now.

I read that Amazon leased another 12 planes. You can see where this is going...
 

amp0193

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I’m fortunate in that I do have the $50-100k that might be the buy-in for an existing FBA business purchase, which would leapfrog the initial heavy lifting of getting a product vetted, sourced, listed, and proven, and would put me immediately I nto the latter stages of optimization, scaling and strategy.
Your post sounds like a fallacy.

It sounds like you’re trying to trade money for spending less time on a business. A shortcut.

There are no shortcuts. Whether you start from scratch, or you start down the road a bit, you’re going to have to be busting a$$ to be successful.

If you’re business isn’t growing, it’s dying. Nothing coasts.

If you want to keep the job, and keep the family time, get used to working till 1am or waking up at 4am, every day of the week until you can quit the job.

Of course the question is begged, “why would any business that provides $3-5k per month in income for minimal upkeep be for sale?”
There’s lots of reasons. Your job as the buyer is to figure out what they aren’t telling you. The real reason that they are selling. It might not be what they say.
 
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Jaco

Jaco

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I feel very strongly about Amazon - it's not a business. It's a sales channel.

People who say they're "building a brand" on Amazon are kidding themselves. Yes, you're building a brand - Amazon's brand.

I'm not saying you can't sell on Amazon. I did it but what I'm hearing from friends who still sell on FBA - it's savage now.

I read that Amazon leased another 12 planes. You can see where this is going...
I really appreciate the input on your experience. @Kak as well, thank you. I view Amazon for what it is, the worlds largest digital storefront. I get that relying on it solely to run a business and a brand is highly speculative, and clearly lacks the C in CENTS in that they can suspend your account or pull your listing on a whim. Here I’m looking at a business that’s had 6 years of pretty consistent revs of $10k month and $4k of net profit/month. At a ~$100k sale price, as someone highlighted earlier, yup would take 3 years to break even if all stayed constant. Obviously if I was able to scale/expand, then shorter. I can only imagine the seller simply owns many more lucrative businesses and wants to focus on them. The description for requirements is 4 hours of work per week at a minimum (sound like a popular book title?) which is managing PPC and re-ordering the goods once a quarter. Now, $3-4k of passive income per month ain’t going to get me to leave my job, and really won’t impact my quality of life substantially, but would get me in the game. Still contemplating and am patient. I think with the economy in the shits for the foreseeable future, there will be more and more businesses for sale just due to the sheer magnitude of the shift in people’s lives.
 
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Jaco

Jaco

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Your post sounds like a fallacy.

It sounds like you’re trying to trade money for spending less time on a business. A shortcut.

There are no shortcuts. Whether you start from scratch, or you start down the road a bit, you’re going to have to be busting a$$ to be successful.

If you’re business isn’t growing, it’s dying. Nothing coasts.

If you want to keep the job, and keep the family time, get used to working till 1am or waking up at 4am, every day of the week until you can quit the job.



There’s lots of reasons. Your job as the buyer is to figure out what they aren’t telling you. The real reason that they are selling. It might not be what they say.
Like it. Posted a reply to another thread before reading this. I don’t disagree, and it really was a rhetorical question, it’s clearly a shortcut. I like your point on busting a$$ even if it is down the road.
 

Ing

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buy a business on Amazon.
What does that Mean?

What I know ( I don’t know much about it), the thing you can buy, is the site with the items and the reviews.

Or do you get the complete source information and the importing process, too?

imo the work of it is sourcing and tactic of growing.
And that you cant buy.

Is that wrong?
 

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The-J

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Cheating? Lol what do you mean? The goal is to make money in an ethical and legal way. If you can buy a business, make it better, and sell it for a profit, then you didn't cheat. You did the work.

Not everyone is bound to be a founder-CEO. Most people aren't.
 
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Jaco

Jaco

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Cheating? Lol what do you mean? The goal is to make money in an ethical and legal way. If you can buy a business, make it better, and sell it for a profit, then you didn't cheat. You did the work.

Not everyone is bound to be a founder-CEO. Most people aren't.
Click-baity title maybe, I really meant cheating the process principle. Doing the hardest (?) part of creating from scratch. I get your point - the end result is the only real judge & jury.
 

Walter Hay

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Some of those businesses were probably created to be sold right from the start. Sometimes the owner just wants to exit and do something else for a change. Who knows.
I can only imagine the seller simply owns many more lucrative businesses and wants to focus on them.
A lot of good sense in Antti's post, but the stuff quoted above shines. Don't ever imagine why a seller wants to sell. Chances are if they tell you, you are still not getting the real story either.

See comment above, but I think (imagine) :smile2:the most likely reason is that the vendor knows that his/her product/s are starting to fade in popularity, or the going is getting tough for some other reason.

Walter
 

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A lot of good sense in Antti's post, but the stuff quoted above shines. Don't ever imagine why a seller wants to sell. Chances are if they tell you, you are still not getting the real story either.

See comment above, but I think (imagine) :smile2:the most likely reason is that the vendor knows that his/her product/s are starting to fade in popularity, or the going is getting tough for some other reason.

Walter
I've seen the opposite as well.
I've seen stores where they're growing so fast, that they have to take out debt to keep up with the growth, and still haven't paid themselves a wage. Eventually it takes it's toll, and people are afraid to throttle growth.
 

Ronak

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The question refers to wether or not buying an Amazon FBA business off of Empire Flippers is indeed short-cutting the Process Principle. It’s obviously a rhetorical question in and of itself, but I feel that it’s still worth asking, especially if I can get any views from those who may have bought a small business and been able to grow/scale it beyond what it’s founder did.

I’m in the sourcing/sampling stage for a product that I believe will sell well on Amazon and Shopify. That said, the amount of time I have to dedicate to this per week has been limited by a very demanding job, and wanting to maintain a close relationship with my wife and kids.

I’m fortunate in that I do have the $50-100k that might be the buy-in for an existing FBA business purchase, which would leapfrog the initial heavy lifting of getting a product vetted, sourced, listed, and proven, and would put me immediately I nto the latter stages of optimization, scaling and strategy.

Of course the question is begged, “why would any business that provides $3-5k per month in income for minimal upkeep be for sale?” Seeing these sold on Empire Flippers at ~30x multiple.

Any views or opinions, especially those with (negative/positive) experience buying a small business are hugely appreciated.
If you have 100k, you can buy a decent business that produces respectable cash flow that isn't as fickle as the latest "amazon slap". Its akin to gambling. But if you do go the fba route, find something that you can guarantee will scale into something beyond Amazon, and fast, otherwise you're paying for a time bomb. And you don't know whether the blast will come from jeff Bezos, Chinese competitors, or the US government, amongst many others.

But no, it's not cheating, it can potentially be s smart way of doing things if you play your cards right.
 

Walter Hay

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I've seen the opposite as well.
I've seen stores where they're growing so fast, that they have to take out debt to keep up with the growth, and still haven't paid themselves a wage. Eventually it takes it's toll, and people are afraid to throttle growth.
Quite right. I have seen many businesses struggle because their growth has outstripped their funding.

Walter
 

Walter Hay

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But if you do go the fba route, find something that you can guarantee will scale into something beyond Amazon, and fast, otherwise you're paying for a time bomb. And you don't know whether the blast will come from jeff Bezos, Chinese competitors, or the US government, amongst many others.
Jeff Bezos is likely to be one of the biggest competitors, Amazon currently have well over 100 Amazon brands, with the number of products being sold under those brands now approaching 30,000.

Amazon compete with their own customers.

Every seller on Amazon should have their own eCommerce URL either embedded in the product or at least printed on their label.

Walter
 

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Like it. Posted a reply to another thread before reading this. I don’t disagree, and it really was a rhetorical question, it’s clearly a shortcut. I like your point on busting a$$ even if it is down the road.
You have a good attitude... you’ll be ok.

Some are more skilled at scaling, some at creating. If you’re the former, buy a business. Just don’t assume you can do nothing and make your money back in 3 years.

I sold a business doing more, with the same time requirements. They decided to coast. It degraded into a shell of what I had built in 3 years.

Do extreme due diligence. Assume they have ulterior motives. Increase competition? Increasing ad spend? Decreasing profitability? Supplier problems? Cogs increase? Lawsuit? New regulations? Amazon changing stuff up? Rankings decreasing?

They will tell you what you want to hear “I want to focus and invest in other things”, but you need to find what else is there. If there’s nothing else, cool. But there probably is.
 

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See comment above, but I think (imagine) :smile2:the most likely reason is that the vendor knows that his/her product/s are starting to fade in popularity, or the going is getting tough for some other reason.

Walter
The best time to sell is at the peak.

Anyone thinking about selling would know this.

Buyer beware.
 

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