Individuals cannot compete against the institutional capital coming into the Amazon FBA space. So, how does an entrepreneur grow their company? Are we all forced to innovate and come up with new businesses – or are there still opportunities to buy brands that we can then scale up?
I recently spoke to Walker Deibel, author of the bestseller Buy Then Build. We discussed how a business owner can still buy and grow existing companies – even as competition for Amazon brands skyrockets.
Two Options for Successful Buyer Entrepreneurship
Many successful entrepreneurs were not start-up founders. Instead, they purchased the company they now own. Another iteration of buyer entrepreneurship is the business owner who initially built their own company but now wants to buy more similar companies to support growth.
Either way, purchasing another company is key to this type of entrepreneurship and, with big-dollar aggregators on the scene, it can seem impossible to do so.
In our conversation, Walker agreed that the average brand owner could not compete with the sheer dollar amount that aggregators have at their disposal. However, there are still opportunities to “buy then build.” They are:
- Buy an off-Amazon business and bring it onto Amazon
Seek out new brands on Shopify, Facebook Marketplace, or elsewhere. Brands that haven’t leaped to Amazon may be ripe for acquisition and growth.
- Consider buying platform businesses
Content platforms have two uses. First, they often make money on their own and can be purchased at a nominal fee. Second, you can utilize them to promote the products your eCommerce business is selling.
Exiting from an Omnichannel Company
Omnichannel entrepreneurship is becoming more prevalent as business owners consider growing by buying other, off-Amazon companies. However, this type of entrepreneurship makes it tricky to attract an aggregator looking for a successful Amazon FBA business to buy.
If you are considering an exit in the next year or two, the big question is, “How do I grow my company while also remaining attractive to big-dollar investors?”
The answer depends on when you’d like to exit.
Six months to a year: Focus on growing your Amazon FBA business and bringing as much into Amazon as possible. This may mean that buying an off-Amazon brand and bringing it to Amazon is the most effective use of your time and capital.
One to two years: The market is constantly changing, and omnichannel growth may be seen as more valuable over the next couple of years. Continuing to grow, creating new revenue streams, and building your business will add value to your eventual exit.
Finally, consider what an amazing exit looks like for you. Some business owners don’t entirely leave their company, only selling parts of the business or retaining some rights that keep them involved. If you find the omnichannel model attractive, it’s possible to get a deal with a buyer that allows you to continue running a portion of your business.
Should I Hire a Broker for My Exit?
Are you considering an exit? Are you getting bombarded with offers? If so, why should you hire a broker? Can’t you just sell direct?
The answer is, you can, of course, sell your business to aggregators or any buyer. Just like you can sell your house without a real estate agent, you can sell your business without a broker.
Here are a few reasons that Walker Deibel gives for hiring a broker:
- Getting more money by utilizing broker services to find the best buyer possible.
- Getting the deal that works best for your need. Even if you have dozens of offers, they may not cover all of the aspects you’d like included in your exit plan. A broker can obtain the deal that works best for you.
- Finding out if your business is saleable. If you’ve never sold a business before, utilizing broker services will educate you on what is needed to ensure your business is saleable.
- Have someone to talk with about your exit. Working alone in an unfamiliar field is difficult. Talking to your broker about your needs helps you formulate your own ideas about what an amazing exit looks like.
If you have heard exiting exit stories and exiting seems like “what everyone is doing right now,” Walker’s best advice is to take a step back. Think about why you want to exit and what the ultimate goal is. Then go to a broker with all of your offers with that ideal in mind and see what they can do to help you achieve your goal.
If you are considering an exit, the Amazing Exits team would love to hear from you. Let’s schedule a call and do a deep dive into your ideal exit. We want to know what an “amazing exit” would look like for you.