Before you sell your Amazon business, go and speak to

a people love knowing that they have something to do every

single day. The cons of selling the business is that maybe you're going to

lose your purpose in life. Maybe this is also a business that you've created

from scratch and you're going to regret selling it. Stop what you're

doing and write this down because this is absolute gold.

So I went and spoke to a business broker and the advice that

he gave me was, I'm Matthew Fraser, and this

is Amazon Ecom Secrets. I'll be sharing with you the secrets

that helped me go from millions in debt to an

eight-figure entrepreneur. If you're ready to escape the nine-to-five

and live life on your terms, let me show you the way. In

today's episode, we're going to talk about selling your

Amazon business, or it could even be selling your

Shopify-based business. And is it a

good idea to sell or is it not a good idea

to sell? I'm going to talk about the pros and cons for each of those scenarios. Now,

it really comes down to everyone's individual circumstances.

Let's say that you've started an Amazon business from scratch. You've

sourced a product from China. You've created a brand, you've

trademarked it, maybe even you have a patent

on your product which could be a utility patent or a design patent

which is something unique about your product and

in fact creates more uniqueness to

your product obviously through the patent. But it also

creates more value to the overall business because now you've

got something unique to sell. So maybe that's you.

So let's say you've been trading for five years and you've

been doing the hard yards the whole time and you've

got a lot of money that's been invested into this business. Now usually by

the time you get to five years down the track, Depending,

but you may have quite a large amount of inventory,

let's say $100,000, $200,000, $300,000 worth of

inventory. You've maybe invested as well in IP such

as the patent and trademark that I mentioned before, maybe even the R&D of

the product. Gee, that could be anything, let's say even $200,000. So now you've got

$200,000 of just startup. in

R&D and now $300,000-odd in

actual inventory. And so ideally, when you're now looking to exit

this business, and it could be from a range of things, but you've now decided, for

whatever reason, it could be divorce. Hopefully, it's not a divorce. But

it could be you're just sick and tired of it. You're going through a life

change. You want to get rid of this business and look at some other opportunities and

you're looking to cash out. So, you're really hoping

to now get back at least the $200,000 that you

started up the business, and of course, your $300,000 in inventory.

And normally, a selling price will be a multiple figure.

Now, in the US, for example, they actually use a multiple of months.

So, when you go into particular websites, we'll talk about them later, websites

who actually help you sell your business. They

work in month multiples, so they might say times 34, and it means 34 times

the average net profit of the business. In Australia, we talk

about in years, so it'd be 3x, 4x, 5x. And

an Amazon business traditionally would probably sell for probably

a 3x if it's good, maybe even a 4x if it's really,

really unique and has really strong profits and

great IP to protect the brand and the product. So

you're really hoping, let's say the product that you've got in Amazon, it's

selling and it's doing $500,000 a year in profit. At a 3x multiple, you're

looking now at a $1.5 million sale price

and plus stock, plus your inventory.

So that would be another, on top of that, $300,000 in

cost price inventory, cost price to you, not to the consumer.

And so now your sale price is really now $1.8 million. Now,

out of that $1.8 million, obviously, you got your $300,000 to pay back the

stock. And you've also got the $1.5 million, which can

now go towards paying your initial investment, which was,

in this scenario, $200,000. So pretty

good at the end of the day. You would now walk away with

inventory back to you. But if we forget about that for a second, We're

now talking $1.3 million in

profit, not including the inventory, and happy days. You

can now use that money. And also, don't forget tax,

right? Don't forget the government's going to come in there and give you a good

old Yeah, make sure you pay up, steal

your cash out. And that's a whole other story of

why we don't want to pay as much tax. But make sure you've got a good

accountant. That leads me down another little rabbit

hole here. Make sure you've got a good accountant. And in

saying that, when you sell the business, may

be the difference between how much you net or not,

depending on the tax financial year. So before you

sell, go and speak to a professional accountant and

make sure it's the right time because it could have different tax

implications for you depending on the timeline. Let's

say you've walked away though with now $1.3 million, let's say minus

tax, let's say roughly $1 million. You can now use

that $1 million for whatever you want. It might be to now put

that into a new startup because now you've decided you want to do something fresh.

Maybe you're going to go put that into property. Maybe you're going to put that into first

mortgage fund and just collect 10% a year. It's completely up

to you. And so really it becomes a

lifestyle type of sale of the lifestyle that

you perhaps don't want the business. Hopefully it's not because of

a divorce. But there's some of the reasons why

you want to sell. Now, you're probably going to ask me now, but

Matt, you know, is it, so that's, that's sort of, I guess, the pros

of selling. I'm going to get an upfront lump sum and I'm going to be

able to exit the business. And now I just have no business at all. And

I can just go and sit on the beach if I want to. Yes, there's

that. But just think about this though, from a

negative point of view, what is the con of it? And that is that

in the first three years, if you continue to make $500,000 a

year, after the first three years, you're now back to zero,

right? So you sell it for 1.5 mil. And

in fact, when you take away tax and other expenses,

you've really got roughly two years. So two years

of profit until you catch up with your lump sum that

you would have got two years earlier, yeah? And maybe that's now

not such a good idea. Maybe it was better to hold on to that business

and collect the $500,000 for the next 10 years

because that's now over 10 years going to be $5 million. And

maybe that sounds better for you. But as I said before, it really comes down

to your personal circumstances and maybe you want a new life change,

something different to do, or go sit on the beach. So that's something to think about. But

I want to share with you a story of in

my situation when I thought about selling. And

I had this healthcare product and I had an exclusive distribution for

selling this product on Amazon around the

world, let's say, most countries around the world. And I

just sort of woke up one day and thought, you know what, why don't I just sell this business and

cash out? And I think at the time I was able

to probably, you know, doing sort of three to five X, I can't remember exactly,

but it was about, it was almost $10 million I

was thinking I was going to be able to collect as a sale price.

And I thought that was gonna be great. So

what did I do? As I went and spoke to a business broker.

Yeah, someone who buys and sells businesses. And

I actually got that advice though from my

coach at the time. My business coach said, hey, if you're thinking about

selling, you should go and speak to a business broker first and

make sure the business is packaged up in a way that's going

to be in the best position to get the best price.

And it was something that I obviously had never thought about selling an online business before,

so it never crossed my mind. And so that's what

I did. I made an appointment with this guy. I paid him a very

small fee, really. But I got his advice. And there was

something that came out of it which was absolutely extraordinary.

And if you are If you're traveling, if you're

driving, riding a bike, walking, stop

what you're doing and write this down because this is absolute

gold. And the advice that he gave me was because

I set the stage. I've been in the business for a

few years and my distribution agreement only

was for five years initially.

And I was already three years into the business. So

now there's only two years remaining on the exclusive distribution contract.

Not something I had thought of would be an issue. But as he sat down

and worked out the numbers, he said, look, you're only going to be able to sell this based

on a two-year multiple, because that's all the person who's buying the

business is going to be able to really guarantee the business for the

two years for them. And after that,

they would have to renegotiate the Exclusive Distribution Agreement. Now,

as you can appreciate, if they go back to the owner of the business, he might say, no,

I'm not doing anything. So therefore, that's the end of it for them. Or

he might change the terms, which then obviously changes a lot of things in the

initial buying of the business and what their profit is going to be ongoing. So

he said, what you need to do, and this is the point I'm going to get to, so

write this note down. What he said was, go back to the owner

of the business and renegotiate the terms of

the contract. And I thought, I'd never even thought

of that. So I went, I literally did that.

I went back to the owner, and I had to put my thinking hat on. What

do I really need? Now, he said to me, I only had two years remaining.

So to make it more attractive for a buyer, I needed a

longer term. So straight away, I went in and said, 10-year contract,

please. That's what I asked for. But keep in mind, the

only reason why I was able to get it, and I did get the

10 years, but the only reason why I could get the 10 years was because

I had proven sales. I was selling in literally

like this, Amazon, US, Canada, UK,

Australia, Japan, Europe, and

I was selling on Shopify. And I was actually packaging up the

whole thing, just like, here it is, take the whole thing

to the new buyer, you can have everything. and

all the countries. So then the owner has granted the

10-year term. I'm thinking this is brilliant because now I

can go back to the market and say to a new buyer,

you've now got a guaranteed 10 years of trading, which is going to be way

more attractive for someone than just two years. Now, the other

thing I put in was something, this is another one to write down. I was

also concerned at the time that the owner of the business may,

and this was something that we discussed and I knew was probably

on the cards, is that he was going to sell his

business, right? And now I'm talking like for

50, 100 plus million dollars. And I was afraid

that if he sold it to a big, let's

say pharmaceutical company, that they would just cut

me out. They'd just tear up the contract and say, no, sorry Matt, we've

now bought the business and we don't need you anymore. Now, I don't know if that

would have happened but that was certainly a concern for me and I

didn't have that in my initial agreement. So this is

something that I tell my clients now that I'm telling you

is this is something that you should have in your distribution agreement

if you can. Now, sometimes you might not be able to get it, but

you might need to prove the sales first and then

come back later and ask for more after you've proven

yourself and your sales. So I said, I

want, in lieu of the fact I was afraid of the owner selling

the business, I said, what I want is if you, Mr.

Business Owner, if you sell the business, I

want 10% of the gross amount of sales.

So if he sold his business for $100 million, I

was going to get a payout of $10 million. And the

other thing I put in there was and

or, it

was and or five times my

last year's profit So if I'd done $500,000 in

profit, I would get $2.5 million. But

in the cause, it was whichever is the greatest. So

if the $10 million is the greatest, that's what I was going to get. And

that just gave me a lot of peace of mind. that if anything

happened from his side through a sale, that I would also have my

business protected either with the $10 million payout or the $2.5 roughly

million payout. And this was something that now,

I guess this is something that you could put into your contract to give you more

protection. The other thing that I put in there was I made it

really, really clear that if

I wanted to transfer this business ownership, transfer my

business ownership, the exclusive distribution, that it

was very, very simple. Now, what the owner ended up doing

was putting in another clause that said, he has the first right

of refusal, which means that if I had someone come

to me and say, Matt, I'm gonna give you $10 million for your business, the

owner of the brand had the first option to

also agree to buy it out at $10 million. So

either way, I was now protected. And that is definitely something

that you should think about putting into your contract and something that I talk

to my clients about all the time in putting something like

that in their contract to protect themselves for whatever happens in

the future. So guys, that bit of information that I

paid for with the broker, I just gave to you for

free. So do not underestimate that bit

of knowledge that I just passed on to you. And I hope you write that down somewhere,

at least think about it when you're doing a contract with

an exclusive distribution or similar, that you

protect yourself if possible and write that down in the contract. So,

so powerful, absolute golden information. So

we've really focused on what are some of the positives of selling

the business but what are the cons of selling the business? Well, first of all, I just

touched on the fact that you could lose cash flow. Obviously,

you're not going to collect your $500,000 a year if you sell it today.

The other thing though is the cons of selling the business is

that maybe you're going to lose your purpose in life. Some

people love knowing that they have something to

do every single day. So if you get rid of this business, I

think it's important to know what is your next step going to be

in life. Maybe this is also a business that you've created from

scratch and you're going to regret selling it. A lot of people who,

particularly if they're really married to the business and it's something they've started from

scratch, they've developed the product, they've come up with a brand

name, they can get quite emotional about it. But

maybe you won't if you're going to be checking them out, I don't know. But just think

about that as a consequence of selling this business and

are you going to be I guess emotionally and intellectually

satisfied if you were to just let this go. Of course,

one of the advantages of selling it is that now you've got

a whole bunch more time on your hands. So now you can really think about things that

you want to do into the future. One other thing that

you should consider that could be a con in selling your business

is the fact that What sort of expenses do you currently run

through your business? A lot of people run car, fuel,

insurance, insurance is potentially on a home office,

your computer, your lighting in

the office. There's just so many things that people run through

their business. Now, if you sell the business, and you don't have

the cash flow now, you're going to have to still continue most

likely to pay for the car. Unless you're going to sell the car, but you're probably not. So

you're going to have to still pay for the car, the fuel,

the insurance, computer expenses, maybe there's subscriptions. Most

people have a lot of subscriptions that put through the business. So you're

now going to have to come up with that money yourself. and

if you don't have another source of income, that could be a challenge for you. So you're

probably looking at this episode or listening to this episode now and thinking, but

Matt, what have you done? Have you sold a business or

are you looking to sell your business? And I can tell you, I

mentioned before about going to sell the business and I was thinking about selling it

but I obviously redid the whole contract. What happened after that

though, I didn't end up selling the business. And

I don't know upon reflection if it was something that I now regret because during

that time, it was absolutely in its heyday. I was making so much money.

If I could have sold the business, In

hindsight, I probably should have if I could have

collected $10 million. But that said,

I've actually made more than $10 million in cash flow in that time, like

in profit. So I'm actually ahead financially

and what it's also done is it has enabled me

to put a lot of things through the business like I just said before. So now

that I really think about it, I think the best decision now having looked

back, was to not sell the business. And to date, I

still haven't sold that business because it's still generating

cash flow, I'm able to put a lot of things through the business, it's

generating profit, and it's giving me a lifestyle which

most people would really envy. Now, If

you're someone who's in a position where you do want to sell either your

Amazon or Shopify or just an online business in general, then

there are places that you can go to to do research and

also sell and buy businesses. And I'm going to give you some

of them right now. Two top platforms that come to mind.

One is empireflippers.com. That's empireflippers.com. probably

one of the biggest brokers out there at the moment. And

they sell not just Amazon FBA businesses, but

content sites, affiliate sites, subscription

sites. There's just so many variations of

online businesses and they sell them all. So if you get

a moment, jump onto empireflippers.com and just have a look. And

you'll actually see, keep in mind that it's in America, so they use a monthly

multiple. monthly multiple of the profit to get their sale price,

but it tells you the type of business it is, what niche it's in,

what its turnover is per month, and what they're asking for

the business. And if you supply your details, in other words,

you log in for a free account, when you click

on these particular listings for businesses, you can actually even

go deeper and find out exactly what the product is,

what sort of assets come with it. So assets can be things like, the

patterns, the trademarks, but also things like Facebook

accounts, Instagram accounts, YouTube accounts, because

all those platforms are worth money, because you can use

those platforms, obviously, to help make sales. And

if you've been in this space for even a little bit, you know, starting, for example, a

YouTube channel, It takes a lot of time. So what's

happening here is you're fast-forwarding your time by just buying

an established business, potentially, or even you're selling, and

you just simply get that right then and there without the time delay. But

you can go through all these different checks. Now, another question

that comes up to me is, well, how do I trust An

online business like this, how do I just fork out my

money and hope that the sales are going to be there or I'm going to even get the business? Empire

Flippers, as an example, has been in the industry for

many, many years. And what they do is they also

grade and do due diligence on the business for

you. That said, you should also do

your own due diligence, which is basically just checking things out and making sure everything's legit.

One thing to note though, with something like an Amazon business, you can't

actually fudge the numbers. If you're getting the exact

data from Amazon, then you

can't just fudge it. Like if you go and buy a milk bar down the

road or a hairdressing salon, they

can easily run a second set of books. The books they

provide to the tax office and to you, which are going to be lower sales,

and their own, probably a lot of cash in hand, et cetera, et cetera. And

so you don't really know what the sales are going to be because they can manipulate it.

Whereas an online business, it's much harder to manipulate the

sales because it's going through other

platforms systems which are spit out the numbers. So that's one

thing to note. The other thing to know too is that when you're buying one

of these businesses, the money goes into escrow, which

means that it's sitting in, let's say,

someone else's account, not controlled by the buyer or

the seller. And so let's say you are buying a business and

it's a million dollars. You could put in the million dollars into escrow

and then the seller will release the details of the business. You

can then verify the details, make sure it's all hunky-dory. And

then once you let Empire Flippers know that everything is good to go, they

then release the money to the seller. So there's all these kind of checks and

balances that are in place to protect both the buyer and the seller.

And that's why these platforms are so well trusted now. The

other company you can check out is Quiet Light Brokers,

same as Empire Flippers, but I don't really like their dashboard as

much. I think Empire Flippers is much easier to understand and navigate. And

the other platform that you can check out is Flippa.com, that's

F-L-I-P-P-A.com. Flippa.com, I

would say, sells a lot of businesses, or buys

and sells a lot of businesses as a brokerage platform. that

are in much lower tier. So probably under the

$500,000 mark, whereas Empire Flippers will do

under the 500 and also well into the sort of

six, seven, up to $10 million range. Quite like brokers, they

probably do more of the higher ticket things. So that's something to

consider when you're looking at these types of different platforms. But please,

go and check them out, get an understanding of what's out there, because maybe if

you're going into the Amazon niche or into the Shopify niche, Selling

your business is something that you should be considering and at

least planning for even if you never end

up selling. Always have your business ready for sale. So

guys, thank you so much for joining me. I really hope you've enjoyed this episode. If

you are enjoying this episode, please leave a five-star review on

Apple Podcast and Spotify. I'd really appreciate that. And also

for any future topics that you want me to address, leave

a comment somewhere in the comment section. And thank you so much. Look

forward to seeing you next time. Thanks for tuning into Amazon Ecom Secrets.

If you enjoyed this episode, the best way to show your support is

to give a five-star review on Apple Podcasts and Spotify, and

make sure to subscribe on YouTube so you don't miss an

episode. You can also find more at I'm

Matthew Fraser on all social media platforms. Thanks