There has probably never been a better time to sell a quality Private label or customer product business. The meteoric rise of Amazon aggregators since about 2020 has meant a jump in the competition for buyers of Amazon-based businesses. What does this mean? Well, an Amazon business with the same exact profit might be worth twice now what is was worth 2 years ago. However, this buying frenzy can lead to private label business owners making a series of mistakes when it comes to selling their businesses.
In the normal course of M & A (mergers and acquisitions), both the seller and buyer of the business understand the process.
But in the e-commerce space, private label business owners with no understanding of mergers often sit across from educated buyers with Stanford business degrees. There is a knowledge gap that is potentially dangerous for the business owners.
An unwise business seller can end up exaggerating that danger to themselves. That could show up in relation to the business itself, commonly in dodgy financial data, exaggerated revenue claims, faking reviews or black hat operating tactics. It could also be around the deal itself. Taking renegotiation personally, allowing a deal structure that is not right for you or allowing the buyers to force exclusivity on you are some classic errors.
Listen to today’s podcast to find out what these errors are – and how to avoid them.