Advice on attempting to sell Amazon shop

[prophet01]

A friend of mine's contacted me asking for advice having just sold her house and looking to downsize.

She's a pensioner but has continued running her online business for over 4 years on Amazon successfully selling printed merchandise, which she prints in her home workshop, as this seller, Its Personalised LTD.

She's now considering retiring completely and wondered if she might be able to sell the online business including the several heat presses, stock, goodwill etc.

As I'm ratehr ignorant of such matters any thoughts on how to go about this would be most appreciated.

 

[fisicx]

Officially you are not permitted to transfer or sell your Amazon store.

The seller account is linked to your friend. If they sell the equipment and stock the buyer is expected to create a new seller account.

The buyer may be lucky and get away with it for a while but the likelihood is Amazon will detect the transfer and ban the account.

That being said, it has been done before and buyers have managed to continue to trade.

 

[prophet01]

In which case an option might be to find someone who might consider setting up a similar new store, sell them the equipment and stock and perhaps negotiate a price to help them set up and run the store with them for a few months until they're sufficiently competent to run it themselves

Any ideas on how and where she might find potential interested persons?

 

[AlanJ1]

Officially you are not permitted to transfer or sell your Amazon store.

Yes and no.

If you sell the company you can get around this.

Any ideas on how and where she might find potential interested persons?

I really don't want to be rude, but what is it she is selling?
The Amazon account shows 24 reviews in the last 12 months, if we go by 1% review rate which is typical on Amazon the account is selling 2400pcs a year so 200/m. Price point is low for most items so it's really a micro business?
I don't see anyone who would really want this for any significant money and may be better to run stock down and sell equipment?

 

[Frank the Insurance guy]

If it is a Ltd company, she can sell the Ltd company and therefore the new owner will continue to trade under the Ltd company and retain all the Amazon access etc with no problem.

However, the key question is what is the business worth! I would guess just the second hand cost of the machines?

 

[prophet01]

In which case an option might be to find someone who might consider setting up a similar new store, sell them the equipment and stock and perhaps negotiate a price to help them set up and run the store with them for a few months until they're sufficiently competent to run it themselves

Any ideas on how and where she might find potential interested persons?

@AlanJ1
Good question, see the above.

She did have a physical print shop for decades before retiring but still wanted to continue doing something following retirement so set up the Amzon store working from home doing a small range of simple items to supplement her pension. She already had the equipment.

From recollection I believe her average profit was/is around £300/week for around 3-4 hours work/day. Decent beer money to supplement the pension. I've asked her for precise infomation.

 

[prophet01]

@Frank the Insurance guy
Yes, the business is a Ltd. company.

What is the business worth is the question of the day.
She obviously has historical accounts to demonstrate profitability.
She has the equipment.
She has the stock.
She has the expertise to pass on regarding both the physical printing element and the store administration element.

 

[AmazonGeek]

There are 3 options:
1 - sell the business. If the ownership of the business changes then it would just need updating in Seller Central to reflect the new directors and persons of significant control (anyone over 25%)
2 - sell the brand
3 - sell the ASINs

3 is by far the easiest and can be paired with 2. The ASINs belong to the Amazon catalogue and anyone can add their offer to an ASIN provided the brand approves and the product being sold is exactly what is in the listing.

So your lady sets up a side agreement with the new owner that they can create an Amazon account and add her ASINs to their inventory. She runs her levels down to zero and they take over. If she is a brand, she will need to transfer that over in the brand registry or link the new owner's account from her BR account.

It can be pretty straightforward actually. The easiest Amazon businesses to sell are FBA. The usual aggregators and buyers won't be interested in a personalised business as it is a lot more hard work but she could advertise with a commercial estate agent and see what happens. They will give her a value.

 

[prophet01]

Yes and no.

If you sell the company you can get around this.

I really don't want to be rude, but what is it she is selling?
The Amazon account shows 24 reviews in the last 12 months, if we go by 1% review rate which is typical on Amazon the account is selling 2400pcs a year so 200/m. Price point is low for most items so it's really a micro business?
I don't see anyone who would really want this for any significant money and may be better to run stock down and sell equipment?

Good question, see the above.

She did have a physical print shop for decades before retiring but still wanted to continue doing something following retirement so set up the Amzon store working from home doing a small range of simple items to supplement her pension. She already had the equipment.

From recollection I believe her average profit was/is around £300/week for around 3-4 hours work/day. Decent beer money to supplement the pension. I've asked her for precise infomation.

So my recollection wasn't far off as she's confirmed an average net profit of £260/week over the last 3 years usually working around 3 hours a day.

Plus she's been winding down over the last year and not proactively attempted to do any work to the store to increase orders as she was happy with what she was getting.

 

[DontAsk]

So my recollection wasn't far off as she's confirmed an average net profit of £260/week over the last 3 years usually working around 3 hours a day.

Plus she's been winding down over the last year and not proactively attempted to do any work to the store to increase orders as she was happy with what she was getting.

So the current weekly profit could be a lot less than the average. I once enquired about a B&M retail business but ran a mile when I saw how the figures were declining year on year. It never did sell.

Even at the average it is, as our friend would say, a job, not a business.

 

[Pish_Pash]

To be fair, that looks like a reasonably decent little side hustle for someone who doesn't want a full time job...and whose money isn't getting sufficient interest in the bank.

regarding its value ...you've not mentioned current stock / asset values (machines) ...annual turnover, salary drawn, divis taken, whether there's any debt ...or even whether handover training would be provided (i.e. how to knock out those products) etc.

So in short, not enough info.

Edit: It looks like the Limited company has been dissolved in 2020, so selling the Amazon shop won't be possible.

 

[prophet01]

@Pish_Pash
"So in short, not enough info."
Not enough information for what?

 

[prophet01]

So the current weekly profit could be a lot less than the average. I once enquired about a B&M retail business but ran a mile when I saw how the figures were declining year on year. It never did sell.

Even at the average it is, as our friend would say, a job, not a business.

Or, equally, it could be a lot more than the average. I don't see what point you're trying to make.

"Even at the average it is, as our friend would say, a job, not a business."
How is 'it' not a business?

 

[Pish_Pash]

@Pish_Pash
"So in short, not enough info."
Not enough information for what?

My apologies ....there are a lot of posts asking for business valuations on here - there's not enough info for that, but I now see you were actually only seeking advice on how to sell an Amazon shop. well, one minute's research, revealed your friend dissolved her Limited company in October 2020, so she won't be able to sell the Amazon shop she's now running - as her Amazon Shop is linked to her ...not a Limited Company. (FWIW, while I can't be 100% sure - and I can't be bothered to research further(!) - I'm pretty sure you're not allowed to make any reference to Limited company in your trading name *unless* you're a limited company - currently your friend is trading on Amazon as "Its Personalised LTD, but - https://find-and-update.company-information.service.gov.uk/company/11119168 ) )

 

[prophet01]

No worries.

My mistake regarding the LTD, I assumed it was as the store name states.

 

[AlanJ1]

How is 'it' not a business?

It's a hobby and not a business.
And I mean that was respect, she has done well and made some extra money and kept herself busy which is great but realistically nobody is buying this. It's too small for a bigger business too buy (and also too much work).

Let's say a business buys everything, it takes 16 hours a week to work. 16 x say £12.21 an hour (mimnimum wage from April) + any extra costs involved to employ + any issues with like returns / machine break down, there's no money left?

Plus going to have to stock a large amount across a range?

So again, it's great for someone to fill a gap and make some money but doesn't look like it's a business.

 

[DontAsk]

My mistake regarding the LTD, I assumed it was as the store name states.

It is an offence to claim to be a Ltd company when no such company exists. You need to tell her to change that NOW.

 

[DontAsk]

Or, equally, it could be a lot more than the average. I don't see what point you're trying to make.

The point I illustrated by my experience of looking at the books of a business I was interested in.

You said yourself that the business is being wound down so the profit is almost certainly on a downward trajectory.

 

[prophet01]

@AlanJ1
Presumably you meant "and I mean that with respect" not "was". No offence taken regardless.

You first called "it" a job and now you call "it" a hobby.
Regardless, I don't see that your explanation goes any way to deemonstrating your statement that "it" is not a business to be proven.

 

[prophet01]

It is an offence to claim to be a Ltd company when no such company exists. You need to tell her to change that NOW.

I'll certainly make her aware.

 

[Clinton]

No worries.

My mistake regarding the LTD, I assumed it was as the store name states.

So we're back to the earlier point -if the Amazon shop is in her personal name, she's not going to get sale for it.

It was at best, just a job. There's very little appetite for jobs!

Those two apart, her casual attitude towards the law and/or her ignorance about business basics will mean any due diligence on this is likely to throw up all kinds of nightmares (if the Ltd issue wasn't bad enough)!

She's best off just closing the bloomin' thing down and selling whatever she can at whatever price she can get in a fire sale / second hand dumping of the equipment / stock in eBay / Facebook.

Nobody's going to buy her 'business'.

 

[AlanJ1]

@AlanJ1
Presumably you meant "and I mean that with respect" not "was". No offence taken regardless.

You first called "it" a job and now you call "it" a hobby.
Regardless, I don't see that your explanation goes any way to deemonstrating your statement that "it" is not a business to be proven.

Apologies yes, I was doing three things at once when responding!

It's a job/hobby it just isn't a business, I just can't see someone buying it so will go with my original statement of selling the stock and running down.

Especially if the Amazon account is under her name and not a company.

 

[AlanJ1]

I'll certainly make her aware.

Did she ever tell Amazon about this? Or leave it in the LTD name?

 

[prophet01]

Apologies yes, I was doing three things at once when responding!

It's a job/hobby it just isn't a business, I just can't see someone buying it so will go with my original statement of selling the stock and running down.

Especially if the Amazon account is under her name and not a company.

Again, no worries.
Let's agree to disagree over whether or not it's a business.
Appreciate your input. I shall certainly pass on your suggestion for the way forward as an option.

 

[prophet01]

@AlanJ1
She's just confirmed informing Amazon at the time.

 

[fisicx]

The job/business thing has been argued over many times.

While she is working it’s a business. When she tries to sell it it’s more like a job. The reason being the buyer is doing all the work. If there were staff doing the work then you are closer to selling a business.

If I were to make you friend an offer all I’m buying is equipment and stock. There isn’t any other value to the business.

 

[prophet01]

So we're back to the earlier point -if the Amazon shop is in her personal name, she's not going to get sale for it.

You appear to have overlooked posts #2 and #3?

 

[prophet01]

The job/business thing has been argued over many times.

While she is working it’s a business. When she tries to sell it it’s more like a job. The reason being the buyer is doing all the work. If there were staff doing the work then you are closer to selling a business.

If I were to make you friend an offer all I’m buying is equipment and stock. There isn’t any other value to the business.

I see where you're coming from and would agree, however, the initial use of the term business was in respect of potentially selling the online shop along with the physical equipment, stock and offer of expertise.

 

[AmazonGeek]

The Amazon account shows 24 reviews in the last 12 months, if we go by 1% review rate which is typical on Amazon the account is selling 2400pcs a year so 200/m.

This is wrong. This is 24 seller feedback comments and should be all about the service the seller provides. Amazon customers get confused and think they are reviewing the products.

To get the reviews, you would need to go into every listing (there are 135 of them) and add them up but that doesn't tell you when they were left so they could have been left over several years and would not give you an annual turnover.

I've run a tool over them and it looks most of them aren't making any sales at all. Only 14 of the listings in her store are showing any revenue and that totals less than £1,000 per month.

On the bright side there is plenty of potential to improve. The listings are pretty bad - not enough images, no keyword research, no A+ content, etc (which means everything else will be poor).

 

[prophet01]

@AmazonGeek
Pretty awsome stuff there.
How accurate is the tool as your findings significantly contradict the information I've received in respect of revenue?

 

[AmazonGeek]

@AmazonGeek
Pretty awsome stuff there.
How accurate is the tool as your findings significantly contradict the information I've received in respect of revenue?

The figures are based on an algorithm which isn't perfect and can be tripped but things like seasonal peaks/troughs but generally it is 80-90% accurate.

If you want to check yourself, download the Helium 10 chrome extension, which is a free tool. Then go to her storefront - https://www.amazon.co.uk/s?me=A35BR6QMZXVNH1&marketplaceID=A1F83G8C2ARO7P

Above each listing there will now be a box with a little graph. If you click on it and then on the sales tab can see revenue for that listing over various periods. I've had a quick look at a few and most are low to nothing.

 

[prophet01]

Oh, I'm not at all questioning what you're saying the tool indicates.

I'm just expressing surprise at the finding of total revenue per month being less than £1000 which significantly contradicts what I've been told.

I need to ask for confirmation of the information I've been given. I do hope I've not been misled.

 

[Clinton]

You appear to have overlooked posts #2 and #3?

I did read them. Did you read #4?

In any case, you're not hearing what everyone's telling you. There's nothing here worth selling - the game ain't worth the candle. There is a price (time and money cost) to running a sale process. You'd do well to advise her that her best bet is closing everything down.

I'm out of this thread, it's going nowhere.

 

[prophet01]

I'm out of this thread, it's going nowhere.

Ciao

 

[AlanJ1]

This is wrong. This is 24 seller feedback comments and should be all about the service the seller provides. Amazon customers get confused and think they are reviewing the products.

Sorry when I said 24 reviews, this was feedback I was refferring too (got the name wrong but OP understood what I was saying). Which is typically 1% of sales.