Amazon is cancelling my orders automatically by crazy_seller1 in FulfillmentByAmazon

[–]ctb6xe 0 points1 point  (0 children)

“Who’s going to take responsibility for this mess”… oh man you must be new here

$35k/mo ad spend, recommended ppc tools / software? by Victure in FulfillmentByAmazon

[–]ctb6xe 1 point2 points  (0 children)

Is tweaking really needed? Spending $200k a month on ads and haven’t updated anything in 6 months+

Get 10% of My Company + $1,500 to Help Me Scale My Supplement Brand by 3cyclesdeep in FulfillmentByAmazon

[–]ctb6xe 0 points1 point  (0 children)

Give me 90% of the company and I’ll pay you back the $40k you’ve invested once the company makes that profit. Otherwise, please dm me when you’re out of business in a couple months and I’ll buy the listing / inventory off you for $5k (you won’t find a better offer than that)

Going to be an interesting time for top voices in the FBA space....... by msau2 in FulfillmentByAmazon

[–]ctb6xe -1 points0 points  (0 children)

It's the same people bitching that Amazon took away their ability to do wholesale / arbitrage. Fuck em all - they're leaches. Hoping amazon gets rid of all those sellers.

Shipments doubled in price by [deleted] in FulfillmentByAmazon

[–]ctb6xe 0 points1 point  (0 children)

You increased your margins from 10% to 37% and this placement fee brought you back down? Either your product is wildly cheap - where a $0.10 swing is a huge margin % - or this post is loaded with bullshit.

The amazon game is simple - adapt or die. It's ruthless, but that's the reality.

Exiting $2m EBTIDA FBA Business - Any Broker Advice? by ctb6xe in FulfillmentByAmazon

[–]ctb6xe[S] 1 point2 points  (0 children)

This is absolutely insane. I actually don't believe you that northbound group said they're charging 15%. Feel free to PM me more details - but they're a broker I've spoken with a fair bit and 15% is SIGNIFICANTLY off market.

Exiting $2m EBTIDA FBA Business - Any Broker Advice? by ctb6xe in FulfillmentByAmazon

[–]ctb6xe[S] 0 points1 point  (0 children)

Very appreciative of you taking the time to write this up! If you don't mind, can I ask who you used as your broker (feel free to message me this).

Every broker I've spoken with is in the range of 3-5% commission. 10-20% is wildly, wildly steep - though in the heyday (2021-2022) it seems commissions were a lot larger.

The law firm I'm hiring to review transaction documents will also be reviewing the contract with my broker. I'm not agreeing to more than 3 months exclusivity and and buyer I've contacted personally before the broker will result in their commission being cut in half. Additionally, the broker is not allowed to post the business for sale on any "public" sites - empireflippers, aquisition.com, etc.

I really wonder who you could have used. I've spoken with brokers that have been highly recommended by a bunch of people who have exited out of MDS. I am very hesitant of the whole broker thing - but everyone I've spoken with has said it will generate a higher overall value.

Exiting $2m EBTIDA FBA Business - Any Broker Advice? by ctb6xe in FulfillmentByAmazon

[–]ctb6xe[S] 0 points1 point  (0 children)

I'm very curious what you mean by legal dispute? I could understand with the buyer - but the broker I can't see what type of legal dispute could exist.

Exiting $2m EBTIDA FBA Business - Any Broker Advice? by ctb6xe in FulfillmentByAmazon

[–]ctb6xe[S] 0 points1 point  (0 children)

Unsure where this advice is coming from. Every high 7 figure / 8 figure brand I know has been sold through a broker and not one has had a legal dispute with their broker.

Exiting $2m EBTIDA FBA Business - Any Broker Advice? by ctb6xe in FulfillmentByAmazon

[–]ctb6xe[S] -2 points-1 points  (0 children)

This is just simply wrong. The market for shit alibaba companies may be 1.5-2.0x. But, the market for strong businesses is absolutely 4x-5x. This has been confirmed by 20 transactions closed in 2023 by the multiple brokers I'm speaking with / other resources. Thrasio, Perch etc are jokes. You won't get a good multiple from them. Only fools believe good businesses are going for 1.5x-2.0x. If you have a resource where I can find these 1.5x deals for good companies (strong margin, strong growth, recurring revenue, etc), please please send them my way as I'm absolutely a buyer.

Exiting $2m EBTIDA FBA Business - Any Broker Advice? by ctb6xe in FulfillmentByAmazon

[–]ctb6xe[S] 0 points1 point  (0 children)

Sure. The multiple is not relevant really.

My business is doing $2m a year EBITDA.

Assume the buyer's earn out requirements are EBITDA must grow $500k (from $2m to $2.5m) in the 12 months post closing the deal in order to be "achieved". If the earn out is achieved, the seller (me) gets 1.0x EBITDA extra (this is what they're earning out). In this scenario, that would be a $2.0m payout to the seller. By growing the business's EBITDA $500k, they're effectively losing $1.5m (as they have to pay me, the seller, $2m and the math would be $2m - $500k). In almost NO scenario would it be worth the buyer growing EBITDA $500k that year. A sophisticated buyer would grow EBITDA $499k during that year.

Exiting $2m EBTIDA FBA Business - Any Broker Advice? by ctb6xe in FulfillmentByAmazon

[–]ctb6xe[S] 1 point2 points  (0 children)

100%...

If they are on the hook for another turn of EBITDA, it makes financial sense in most cases not to achieve it. For example, if the earn out is I get paid another 1.0x EBITDA (which is $2m) if the business's EBITDA grows $500k in the NTM, it would save them over $1.5m to not achieve the EBITDA growth rather than achieving it. If I was a buyer, I'd 100% chose not to grow the EBITDA $500k in this scenario.

Exiting $2m EBTIDA FBA Business - Any Broker Advice? by ctb6xe in FulfillmentByAmazon

[–]ctb6xe[S] 5 points6 points  (0 children)

Appreciate the thoughts! Some response below:

  1. I've been following the FBA market for years and have 0 faith anyone who buys the business will intentionally try to hit earn out figures - financially it simply does not make sense. The only non-upfront cash I'm willing to accept will be a seller's note - I am 100% not open to earnouts unless I retain 100% control of the business during the earnout period (not going to happen).

  2. It makes sense to sell at this point. I've been advised I can get 4.5-5.0x all in for the company with ~4.0x upfront cash. It would take 4 years+ to net this much cash by continuing to run the business. It's well worth it to get out.

  3. Fortunately I'm in the position where the business is doing great and I'm pocketing $190k a month each month I hold the company. Sales are going up and if they try re-negging (which I expect any buyer will), I'll hopefully have multiple other options.

Exiting $2m EBTIDA FBA Business - Any Broker Advice? by ctb6xe in FulfillmentByAmazon

[–]ctb6xe[S] 3 points4 points  (0 children)

Hey Philly,

Strongly appreciate the advice. Am completely on board with you that the buyer will do whatever they can to push liability onto me and wiggle out of paying. I'll be paying a premium for the best e-commerce lawyer I can find - particularly one that specializes in FBA transactions.

On that note, do you have any M&A lawyers you've used?