One thing rarely discussed when preparing to exit is how a deal can fall apart early on in the acquisitions process. No brand owner wants a deal to fail because of something they did, so we wanted to take a moment to discuss red flags that buyers look for when entering a deal.

Five Red Flags You Can Avoid

You can avoid red flags and remove them from your business practice now, before you enter into a deal. This will help you prepare for a smooth future exit and simplify things for you and the aggregator or brand buyer.

1. Using sketchy business practices

There are many “gray hat” business practices that Amazon sellers can use to get a leg up over competitors in the short term, which can also cause the store to be kicked off of Amazon. If you use sketchy business practices or are riding on the edge of Amazon rules, clean up your act now – before considering an exit.

2. Purchased or coerced reviews

Your product must have trustworthy reviews. There are many legitimate ways to get genuine reviews on your products, including using that “request review” button in Seller Central. Expend energy on accumulating many honest reviews on all of your products before and during any sale to assure your brand’s saleability and success.

3. Unreliable shipping/sourcing

Shipping is a huge issue right now. However, even without the current shipping delays at ports, some brand owners fail to keep up with best practices when shipping products, sourcing products, and keeping the FBA warehouses stocked. If this is a recurring issue, revisit how to source and ship your products to find the best and most cost-effective solutions now to improve profitability before your exit. Increased profitability will only make your brand more enticing to a buyer.

4. No or very little inventory available

Understanding how to keep inventory available while remaining lean is a difficult balance to strike. Especially, again, with those current shipping issues. However, your inventory must remain stocked up and ready for heavier seasons.

Another way that inventory can be strapped is by releasing a product without having enough in stock to meet demand. Do your market research and create the best available estimates so that you can ensure your inventory meets demand, no matter what is going on. This shows a buyer that your brand can weather any storm – and that you can bring additional and valuable knowledge to the table as a brand owner.

5. Products steadily falling off the first page

If you want to sell your brand because it is failing, that is a huge red flag. It may be that a buyer can do due diligence and determine that your brand is recoverable. But, not only does a failing brand mean a reduced sales price, but it also means that the buyer is purchasing a product on its downswing.

Put in the time and energy to get your brand back on that front search page – and go for the top three listings. It’s a ton of work, and if you are exhausted and checked out of your company, you may feel like it’s more worth it to sell your business at a loss and exit. But that doesn’t sound like an amazing exit – and it’s not what we want for you. If you can get your brand back up to the top of the first page, do it and sell out rapidly.

Many aggregators promise a 30-45 day closing period after the LOI is accepted. If you are feeling ready to exit, but your business isn’t where it needs to be to do so, give yourself the goal of rebuilding your brand to be in the best place possible and ready for sale in a set period. If you aren’t quite ready to exit, but know you will want to eventually get out of the Amazon FBA game, it’s time to start planning for the most ideal exit possible.

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