An Amazon store was sold for 60 million! What are the risks of selling a store? Experts will reveal the whole transaction process

As a small seller on Amazon:

Are you still anxious about financing?

Are there any risks in selling a store on Amazon?

How can account security be guaranteed during transactions?

As we all know, Amazon sellers are limited by the characteristics of the industry. In pursuit of high-efficiency development and imperfect supervision, the degree of standardization is low, and traditional financing channels such as bank loans are often greatly restricted. Benefiting from the changes in overseas consumer consumption habits caused by last year's epidemic, the overall cross-border e-commerce industry has developed rapidly last year.

1. Store transactions: an efficient and convenient financing channel

The rapid development of cross-border e-commerce has also attracted the attention of capital. Since 2020, many large Amazon sellers at home and abroad have been favored by capital and received hundreds of millions of yuan in investment. Some industry-leading sellers have a valuation of over 10 billion yuan. The current prosperous industry situation has solved the financing problems of industry-leading large sellers to a certain extent, but some high-quality small and medium-sized sellers may still face financing difficulties.

Faced with increasingly stringent FBA warehouse rules and rising material and logistics costs, in addition to restricted bank financing and equity financing, do small and medium-sized high-quality sellers have more ideal financing channels? We believe that selling stores is also a good choice for small and medium-sized Amazon sellers. 4KMILES and Ciheng Consulting jointly provide Amazon brand sellers with full-process services from consulting to store evaluation, store highlights, due diligence, transaction document drafting, risk control, tax planning, etc., to help sellers maximize their interests!  

In Europe and the United States, there is a very mature and complete store transaction system. Some store acquirers not only have abundant financial strength, but also have more professional industry experience. They integrate brands, develop brand potential, optimize store operations, and maximize store value by acquiring stores. The highest price they pay for store acquisitions may exceed 10 million US dollars. At present, a large number of third-party brand acquirers have set their sights on China, looking for high-quality brand sellers in China and carrying out Amazon brand acquisitions.  

Compared with complex equity financing or equity mergers and acquisitions, selling a store:

1. More efficient and more controllable risks

2. No need to verify the company's overall compliance

3. No need to be forced to bet on store performance

4. The transaction process is simpler  

Store sale financing is a simpler and more efficient financing option for sellers.  

2. What are the risks of selling Amazon accounts?

As mentioned above, in Europe and the United States, the Amazon store transfer system is already very mature. According to statistics, there are more than 40 overseas companies with nearly 6 billion US dollars eyeing the third-party sellers on the Amazon platform and starting to acquire high-quality stores in batches. Among them, Thrasio alone has raised 1.8 billion US dollars in funds, acquired more than 100 Amazon third-party brands, and operated a total of about 22,000 products.

  Under the current mature system, the overall risk of selling Amazon accounts is controllable and transaction security is guaranteed under appropriate risk control measures. We have also summarized rich practical experience in preventing issues such as store association and listing security that small and medium-sized sellers are worried about during transactions.   So, how much can a seller's Amazon store sell for? Which stores are easier to sell? Let's take a look!  

3. Store transaction price

At present, the general price of store acquisition is calculated as follows:

Project Valuation   = Total gross profit in the last 12 months × valuation multiples.  

The valuation multiples are between 3-4 times, and the main reference factors include: revenue and gross profit growth rate, product life cycle and product fortress, and brand fan base.  

4. Portrait of a store that can be sold

Generally speaking, acquirers prefer stores with the following characteristics:

If your store meets the above standards and you are interested in selling it, please contact us using the contact information at the end of this article.  

Seller Case  

Take seller A we contacted as an example. At the beginning of March this year, they had an idea: could they sell one of their stores that had good growth but was not their main category? The sale proceeds could support the sales growth of the main category in the second half of the year? They started to contact brand acquirers in late March and received several offers the following month . They selected one acquirer whose transaction efficiency and valuation met their expectations and began to promote the transaction.

In May, a cross-border online due diligence process that was unfamiliar but pleasant was completed. The seller received RMB 42.5 million in US dollars in early June. The final payment of RMB 7.5 million in US dollars is planned to be collected the following year . This fund not only enabled Seller A to quickly transfuse other brands, but also optimized related suppliers, which greatly benefited the company's other main brand products.  

5. How to achieve safe trading with controllable risks?   4KMILES and Ciheng Consulting can help you!

Ciheng Consulting is a professional consulting firm under Anci Capital that focuses on cross-border e-commerce capital services. Anci Capital and the Ciheng team have led and participated in the investment or M&A listing projects of many well-known cross-border e-commerce related companies such as Paton, Tongtuo, Santai, Yibai Network, Starlink, and Feishu Shennuo. The Ciheng team is currently providing professional services for many small and medium-sized Amazon sellers to sell their stores.   Some cases of Anci Capital's investment and services in the cross-border e-commerce field ▼

In addition to investors with many years of industry investment experience, the Ciheng team is also equipped with financial, legal and tax professionals from top domestic law firms, accounting firms and other professional institutions. In the process of selling a store, in addition to connecting with overseas acquirers, the Ciheng team can also provide you with the most professional and high-quality financial, tax and legal services.  

Services we can provide  

For most sellers, they are not familiar with the entire store transaction process, are not familiar with the market situation, and cannot accurately assess the value of their own store. In addition, when it comes to cross-border transactions, language communication is not smooth, and the contract transaction terms are not understood. They cannot properly control the key issues in the transaction process, such as:

1) Without a deep understanding of payment arrangements, delivery terms, inventory value calculation terms, etc., it is very easy to fall into traps during the transaction;

2) Listing/account security measures are not in place during the due diligence process , and the terms of the confidentiality agreement are not targeted.  

As a professional service organization, we can provide you with the following services and monitor the entire process:

We promise to provide one-stop service. You provide us with your intention, and we will be responsible for the entire process from finding an acquirer to completing the transaction. We will charge you only after the transaction is completed to provide you with protection.   Scan the QR code below to add customer service to contact us ▼

Click the link below to apply for the early bird ticket for the Ciheng Consulting x 4KMILES August Private Meeting

https://www.wjx.cn/vm/mSrDyah.aspx

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