How to Buy an Amazon FBA Business [STEP-BY-STEP]

So 3 years ago, I purchased my first Amazon FBA business and it completely changed my life. And back in 2022, when I first purchased that business, I paid $190,000 for it. And no, I didn't put that money all down. I did seller financing, got an investor on board, and kind of did different types of creative financing where I owned, or I put down $0 of my own money. And 3 years later, that same business is for sale on that same platform for over $2.5 million. In this video, I'm going to show you proof of that. I'm going to also show you exactly how to purchase your first Amazon FBA business. And I'm also going to show you different types of lenders that I work with now that really require you to put down $0 of your own money, depending on the purchase price of that actual business. So this is going to be a step-by-step tutorial as far as how to purchase an Amazon FBA business, what to look for, as far as purchasing an Amazon FBA business and the, basically the different strategies that I saw when I purchased this business that helped me go from purchasing it from $190,000 to selling it now for $2.5 million. And a little shocker here as well though, that even if I don't sell this business for $2.5 million or higher, this actual business goes ahead and cash flows more than $65,000 in profit every single month. And again, I'm going to show you proof of all of this, but first things first, where do you purchase Amazon FBA businesses? On a quick Google search, you can go ahead and see there's different types. Um, but the most actual places or brokerages to get reliable Amazon FBA businesses is Quiet Light is one, Empire Flippers is another one. Um, we also have BizBuySell, which isn't so great. Uh, Flippa as well is okay as well. I used Empire Flippers. And just to go ahead and show you proof of it, I've purchased multiple Amazon FBA businesses now. That first one, like I mentioned before, for $190,000. But if you guys don't know what Empire Flippers is, I have the website link down right below this actual video. I'll have it pinned on the actual comment as well. They are a brokerage, basically a marketplace that is not only Amazon FBA businesses, but they also sell other e-commerce type of businesses as well, whether that's software services, whatever it might be. But they do specialize in Amazon FBA. And how do I know this? Well, it's because I've talked to them numerous times now. I've been vetted through the whole process. I kind of probably the number one customer when it comes to Empire Flippers nowadays. And basically when you set up on Empire Flippers, regardless if you're buying or selling the actual business, you have to get kind of pre-approved. And I talk about pre-approved because they want to see as far as what you have liquid or from a lender as far as what you qualify for. So whenever you go ahead and sign up, they'll go ask you, like they'll prompt you just specific type of questions based on that. They'll go ahead and pre-approve you. This is how the pre-approval kind of looks like, right? Like they'll give you a maximum unlock list price because you will see that they have a lot of different businesses at different price ranges. And this is why I really like Empire Flippers the most because you are not on, you are not able to unlock listings more than this actual price here. And this is really good for sellers of Amazon FBA businesses, because you don't want people to know the exact cost of goods sold or different types of intellectual property that's being unlocked here, unless you're able to actually qualify from it. And this is a cool thing about me seeing it now from the selling portion of it. This is really, really extremely important and valuable information because you want to be able to go ahead and protect your assets as well. Right? So when you go ahead and sign up and get pre-approved, regardless if you're working with the SBA, you have a lender of your choice, or you have those liquid assets in your actual bank account, you'll get this unlock button. And you can see on the marketplace here, there are businesses that are, you know, brand new that just got listed for $400,000. But you also have businesses that haven't been listed yet that are for $10 million, $7 million, $5.5 million, $4.7 million. But don't worry, there's also businesses here that you can go ahead and purchase for as little as— you can go down here— $35,000 or Right over there, right? So what we're going to go over is basically the step-by-step, right? Because that's what I went ahead and promised you guys. So once you unlock this actual listing, it'll take you to this marketplace, right? But we're in this essence looking for Amazon FBA businesses. And I'm going to zoom out so you can go ahead and see my entire screen over here. So basically you can go ahead and filter out because you can see that there's different types of monetizations. And basically this is how they make their money, right? SaaS, YouTube, Amazon FBA, digital products, dropshipping, whatever you name it. They have a bunch of different types of options that you're able to purchase on Empire Flippers. But obviously this is a monetization channel of us going ahead and purchasing an Amazon FBA business. So that's a cool thing. But also realize that there's different niches, platforms, list price, monthly net profit that you can go ahead and look for that you can filter out even further. But for this case, right, if I'm not approved for, let's say, a $7 million listing, why would I want to even show it on my actual dashboard? So right here, we're going to go ahead and see exactly what you're comfortable with actually spending. In my case, I'm comfortable spending right around $600,000 on a new listing. And you can see based on just that criteria alone, there's around 67— if I go ahead and hover right over here, 67 listings that I'm able to go ahead and unlock. And even there, right, like for me, I like to go ahead and look at businesses that have less than 20 SKUs. And what SKUs mean is basically products that are for sale under one umbrella of brands. You see, I do Amazon FBA because it allows me to have the money freedom, the time freedom, and the location freedom. And I have— if I have more SKUs, which is products that I have to go ahead and manage, I go ahead and have to spend more time on the business. So this is why I always have a SKU count of 20 and lower, because you can see see actual businesses here. And based on experience, there's some businesses that have over 200, 300 SKUs, and there is no way I'm going to go ahead and manage all of those different types of SKUs. But even with that, you can go ahead and see that there's a lot— there's 37 types of businesses based on just that criteria and the filters I went ahead and set. And I'm gonna go ahead and kind of make myself a little bit little here because I kind of want to go over some important points when it comes to information, right? So there's obviously some people that have a make my offer, which I don't consider serious sellers of their actual business. So I don't even want to reach out to them, but let's go ahead and see exactly those people that do have their items for sale. There's a couple of things here. There's the list price, the monthly net profit, the monthly revenue. And I'll go ahead and highlight what I'm talking about here, the monthly net profit, the monthly revenue, the monetization. So how do they get this monthly net profit? It's not basically the last month, how much it went ahead and made, but this is a trailing 12-month average, meaning that over the last 12 months on average, this business generates right around $13,000 in net profit. And this is their actual revenue as well. And obviously they do Amazon FBA and you can see this multiple here and this multiple, this monthly multiple changes, right? There's this one that has 35. This one has 22. This one has 23. This one has 26. This one has 38. So basically how they get this sales price is that they multiply their net profit times that monthly multiple. And we're going to go over exactly what determines that monthly multiple in a second. But basically how they determine it is that if the seller wants to sell their business for a 35 times multiple, that means they're taking a 35 times multiple, multiplying it by $12,940, and they're getting their sales price of $452,000. Okay. So what dictates this monthly multiple? One, how serious are you or motivated are you to actually sell your business? So if you're highly motivated to actually sell your business, you're obviously going to list this multiple, uh, at the lowest multiple, you know, basically comp here. So you can see people are listing it for 22 times multiple, 23 times multiple. There's other people that are not going ahead and in a rush to start the actual business. So you'll go ahead and see a 38 times multiple. I've seen as high as 48 times multiple. And in the crazy days, and we're talking 2020, 2021, where there's all these aggregators like ThriveDeals, um, and like Perch and all these other aggregators, I saw them go as high as 60 times multi-monthly multiple, which is insane to say nowadays, but So this is how far we've come. And now that aggregators are not in this actual space, I do think, and I am very bullish on actually purchasing Amazon FBA businesses. As you saw, I've already purchased 3 of them. I want to purchase more, right? But there's often things, key things to look for when it comes to purchasing this business. So that's one, motivation to sell. The next one is what type of industry you're in, something where you are a brandable product, get repeat customers, and basically have a brand that is going ahead and having growth opportunities. You're going to go ahead and buy those at a higher monthly multiple because there's still room to grow with those actual products as opposed to a business that might be stagnant or declining. Those are the monthly multiples that are going to be a little bit lower because they have, quote unquote, more risk. There's also, you know, different factors like how the age of these actual businesses, a business that's probably only been around for 2 years that don't have tax returns and this and that are going to go ahead and have a lower monthly multiple as well. And also with that, if you have steady sales over the last 5 years, you're SBA eligible, meaning that you qualify with your tax returns. You're going to net a way higher type of multiple as well, because you're going to have more buyers that are interested in your actual business. So again, this is all information based on knowledge that I currently have, but okay. Now that we know all this information here, let's kind of look to see exactly like, uh, when we do go to unlock a listing, how does that look like? Right. So let's say we click on this actual listing. We see that it's in the supplements niche and now Empire Flippers gives us a lot more data as well. Right. So you can see, this is the list price. This is their multiple. This is all based on averages over the last 12 months. So over the last 12 months, on average, this business does right around $20,000 in net monthly profit. They do right around $90,000 in monthly revenue. They have a 22% profit margin. So everything looks solid right now. Right? They have the SKU count that I'm looking for. Excuse me. So, and they have 3 parent ASINs. What this means, right? If someone has a parent ASIN, that means that they have 1 product, right? So in this case, they have 3 actual products. What SKU in this situation means, and basically them being in the supplement space, which, you know, I have knowledge of as well, is that they have 1 type of product, but they have 3 different types of variations. Whether that be a 30-day pill, a 60-day pill, or a 90-day pill, right? I don't know exactly right now, but this is what I'm assuming. So they have basically 3 products, but within those 3 products, they have different variations of that same product. And variations can mean different colors, different sizes, different bundles, whatever it might be, right? You can also see what the TACoS is. And what TACoS basically refers to is based on this actual revenue figure that they're making exactly every single month, 12% of that, or close to 12% of that, goes through advertising. So they do advertise. A good rule of thumb here is that you don't want to buy a business, based on my opinion, that has somewhere of a TACoS of less than 5%. Why? Because they're really, really reliant on organic search. And with Amazon and organic search, someone can come in here at a lower price point, take your ranking, and then you have to go ahead and start spending more money on advertising as well. And I also don't want to buy a business that's over 30% TACoS because they're highly reliant on ads itself, right? And you can also see the percentage of their actual, um, you know, uh, sale price coming as COGS, which is cost of goods sold. This is to go ahead and produce the actual item, get it shipped into an Amazon warehouse, which is the cost of goods sold. So this is really great information that Empire Flippers also gives you, right? So another thing that they also give you is this section here as far as what is included in the sale of this actual business. So you can see that you get the entire seller account. So now you save all the data and you have the 9 SKUs that are currently for sale as well. You get all the primary domains, any employee contracts, any supplier contracts, you get the trademark, any copyright, any email lists, advertising accounts, everything basically is for sale. You're buying the brand and the Amazon account. And if they have a Shopify store as well, right? So you're getting all of this, right? So if everything looks good here, Right. There's other things as well. Like this wasn't the reason why I haven't went ahead and unlocked this listing is because they have a listing in the United Kingdom. And there's one thing to consider here is that if they have, basically, if they're selling supplements or any type of products outside of the United States, and you're not a United States, basically business or corporation, you might have to go ahead and apply for VATs, different shipping contracts when it comes to United Kingdom, EU. And I don't want to deal with that headache. Right? Like I mentioned before, I try and buy businesses where I don't have to go ahead and work, right? This is the beauty of Amazon FBA. And by me going into different marketplaces, me having to get different types of red tape and documentation and all this other stuff, I've been through it before. I don't want to deal with that headache, but let's say you do already, right? So basically we go ahead and unlock this listing and right off the bat, we're able to go ahead and get way more information. Like what are the products that this actual person is selling. For in this case, I'll go ahead and reveal the actual products, but we won't dive into the P&L, which is the most important thing when it comes to vetting these actual brands, because we want to know exactly what to look for when we purchase these actual businesses. So as this goes ahead and refreshes here, I'll go ahead, refresh myself. And then you're going to be able to unlock the full actual listing. So now we can actually see exactly what products that this actual seller actually sells. And this point, there's already a red flag because it already shows that there's actually no products that are listed. But you can also see their Shopify store, right? So in this case, we can actually see what products are being listed on their Shopify store. And why I say this is a red flag is because I just noticed that on Amazon, they actually don't have a listing on Amazon to actually sell. So you have to be careful of that because this is in the supplement space. This is why I don't like purchasing supplement brands itself, is because they're very, very sensitive with the information on Amazon. So in this case, I'm not going to go any further. I already saw that they don't have a listing on Amazon, and I don't want to go ahead and go any further. But let's go ahead and see another unlock listing to kind of see exactly how it looks like for the whole process. So we'll go to all my unlocks right over here, and I'll take you through a different type of brand that I currently unlocked. So we'll go— this one's for sale. We'll go here. We'll go ahead and re-unlock this one, unlock this actual listing. And again, I'm doing this live. I hate making edits on my actual videos. So Bear with me if I do make a mistake. I try and be as raw as possible, but you can see here they have 80 SKUs. This already doesn't meet my criteria, but let's go ahead and take a look at their Amazon account. So this is a better understanding right now. We get a sense of how it looks like when we're able to actually see the products that they sell. So what I do here is I like to go to the actual listing and come down here to sold by, because now we're going to get a sense of all the products that they go ahead and sell. So once I click on that, I click on their storefront and now I'll get a sense of every single one of these products that this actual brand sells. Right. And one thing that already stands out to me is this is a brand. And what I mean by that is that you can see that there's different types of products that highlight exactly what their brand name is. And it looks like all of these different types of products are within the same category. So I see growth in the future. I see that when somebody, runs out of any of these actual products, they're going to come back and not type in the actual product name, but they're going to type in the brand name. So that goes ahead and gives you repeat customers as well. So you can see that all of these different things are really high as far as what branding really is, um, and what makes an actual successful brand on Amazon, right? So now let's say everything kind of checks off the list, right? All the numbers make sense. The profit margin is good. The TACOS is really good. Cost of goods sold is good. Let's go ahead and start analyzing their P&L statements. And again, I'm not going to go ahead and release this information just because it's confidential information and a lot of people are going to be on lock for a $600,000 listing. But basically, um, we'll go— we're going to go ahead and kind of look at it. But just proof that I've purchased Amazon FBA businesses before, these are all the businesses that I have went ahead and purchased. The first one that I talked about in this actual video is $190,000 that I went ahead and purchased. And if we look at the dashboard, You can see that I didn't have that up front. Well, what I had up front was $100,000 and I negotiated seller financing within this actual deal. So if you guys are interested at all in how I went ahead and did this, check out that first link below on my school community. I have lenders there. I have how to go ahead and, you know, sell on Amazon, how to scale your actual Amazon, how to get it prepared to actually sell. And I'm adding a section of how to actually buy as well. So if you guys are interested, hit that school community, join the community itself, be able to have access to me on all the live streams that are there to ask questions. It's literally the cheapest price possible right now. So it's a month-to-month subscription as well. So cancel at any time, but this is the actual purchase agreement that I had. Right. And just proof I purchased this actual business and you can see it here. And I'm going to go over the information here. I purchased this health and fitness industry category, and now I am selling it. This is the actual listing here. The whole process of me going ahead and filing all the final valuations, going through the whole vetting process. And this is the actual listing, right? So again, I always like to be truthful. I always like to provide proof. This is Maverick. I went ahead and purchased for $190,000 and it's for sale for $2.5 million. Okay. So let's go ahead and look to see the P&L statement when I purchased this business and what I looked for, um, as far as like little caveats that wanted me to actually buy this business, because you're going to see a P&L sheet that looks exactly like this, right? And at the bottom here, they're going to have a summary. They're going to have combined FBA earnings. Sales that came from the US and the product landed cost. So based on all the information here, what I noticed and analyzed when I purchased the actual business, the first thing I noticed that this business was relatively new. And you can see that over back in 2020 and within 2021, this business was mostly unprofitable. And that's normal because when you're starting up a business, there's a lot of startup expenses when it comes to creating the brand, getting brand registry, getting a trademark, testing different things of advertising when it comes to getting keywords and harvesting these keywords. So it being unprofitable for the first year is totally okay. But I also started noticing that, you know, back in 2021, they started getting more and more sales, right? But starting in 2022, sales kind of slumped, right? So that's one thing to go ahead and look for as far as trends is concerned, right? So I started looking at trends as well. I started getting access to the Amazon account. I started seeing that these people were not spending that much on advertising, right? So this advertising piece here, and when I dig in deeper and I started getting more phone calls with the actual seller, I started noticing that their ads were actually turned off midday, meaning that their budgets weren't aligned with the growth of a growing company. Because if your budgets are turning off by midday, we're talking 12:00 PM, that means that you're not advertising after 12:00 PM. So there's a lot of room for improvement. There. So that's the one thing that I really saw. Um, another thing that I saw was that there weren't SKU variations. So they had parent product ASINs, but they didn't take advantage of different colors and different whites, uh, weights or different variation sizes. So this made it very appealing knowing that if they're going ahead and being profitable right now, it's an easy fix to go ahead and start scaling later on. And another thing that really caught my eye was this product landed cost, right? So you can go ahead and see what they went ahead and paid to produce these actual items. And I started noticing that this particular item here was $3.70 to produce, but the shipping cost was $3. So I started taking, analyzing what product this was, right? So when I looked at the actual listing, I saw that this was the actual product that they were going ahead and selling. And I said, how in the world is this product $3 or close to $4 to produce? Another $4 to go ahead and ship because this product, as you can go ahead and see on this actual listing page here, is right around— you can see it here, style. I'm looking for the measurements here, right here. It's 0.8 ounces, right? So there is no way that this product is so lightweight and costing, you know, $3 to go ahead and ship this actual item. Well, I quickly realized that there were 8 air shipping a lot of their actual inventory. So that's one thing to really consider, that when I started analyzing and talking to this actual seller more and more, I started realizing that there was cash flow issues with his actual business, that this was a new seller going ahead and selling on Amazon, and they didn't have cash flow as far as going ahead and scaling this actual business out. So as Amazon paid them, it was going straight to the actual supplier and going ahead and, you know, reordering the inventory. And they were going ahead and running out of stock a lot of the times as well. So they had to airship a lot of their inventory. So this already— because when you look at the actual listing, this already gave me like a, like a pause to concern as far as like, hey, I need to buy this actual business. And the reason for that was because this business had a 26% profit margin, and that was with airshipping all of their inventory. So as long as I knew that I can go ahead and drop that basically cost of goods sold by that much, by just sea shipping this actual inventory, this percentage was going to go ahead and skyrocket. And it did. Right. So based on my calculations, this 26% profit margin by just switching to sea shipping brought it all the way up to around 38% profit margin where I knew I could double down on ads where I can go ahead and come out with different variations. My cost of goods sold will basically dramatically decrease from currently right now. That was 24%. All the way down to where I brought it down to at 20%, right? So different things that I went ahead and did in this actual business to really scale this business out. And as you can see now, this business generates over $6,000 every single month on average over the last 12 months, right? So there's months that I've hit $90,000. There's months that I've hit $40,000, but on average, this business is going ahead and generating a lot of money, especially when I first actually bought or, you know, listed this actual business or, uh, you know, bought it back then. It was only generating $6,000. So I literally 10x or 100x. I don't even know how many x's I went ahead and did with this actual business, but it literally changed my life. And again, it took $0 out of my pocket. And if you guys want access to me to vet you as far as like buying businesses and anything like that, Go ahead, click that link down below. You'll have access to that community to building out brands, scaling to 6 to 7 figures, getting it ready to sell your actual business. And you also get access to lenders that I work with right now, which again will result in you going ahead and being able to buy these actual businesses, even if you have as little as 0% to go ahead and put down, because these are cash-flowing asset businesses. And as long as you know what you're going ahead and doing, this is why you need to go ahead and get a mentorship. Coaches, somebody involved in your corner that knows exactly what they're going ahead and doing. These are long-lasting businesses that regardless of the SBA payment, you'll go ahead and win as long as there's opportunity there. But again, if you guys appreciate anything I went ahead and did in the step-by-step of how to purchase an Amazon FBA business through Empire Flippers, going into the P&L statements, going ahead and showing you guys the brands that I go ahead and see, different things I look for, all I ask for in return is consider liking this actual video, consider going ahead and subscribing to this YouTube channel, and I'll go ahead and see you in the school community as well.