Should you buy an Amazon FBA business or start your own?

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If you are considering owning an FBA business, you can either start from scratch or buy an existing one. Deciding between the two can involve a bit of brainstorming. If you have the skills and the intention to fight and grow your own brand online, you should give it a shot.

On the other hand, you can buy a growing FBA business, scale it to new heights using your skills and capital, and sell it for a decent profit. It all depends on your short and long term goals, the amount of capital you have, and your personality as a business owner.

Related: 3 Things to Consider Before Owning an Amazon FBA Business

When Should You Start an FBA Business

You have start-up funds:

If you have accumulated decent capital or have access to attractive financing, starting an FBA business is a great option. Although surveys of FBA sellers have shown that an average of $3,836 is needed to start an FBA business, the actual start-up cost could even reach five figures, depending on the product or business model of your particular FBA business.

Starting a new FBA business involves costs like inventory, PPC advertising, social media marketing, legal needs, branding, packaging, and Amazon fees, among others.

You are here for the long haul:

An FBA business is like any other business – it requires huge commitments of time and energy and can quickly take over your life. If you have decided to jump into the e-commerce jungle and are ready to face its challenges, this is the right choice for you.

However, time and money aren’t the only things you’ll need to run your business. FBA expertise also plays a huge role.

You want to build and sell a successful business:

Wanting to sell a successful FBA business can be one of the best reasons to start one. If you start your FBA journey with a possible sale in mind, your operations will be streamlined and you will have solid SOPs in place to ensure a smooth handover to the new owner.

This will ensure that your business will be the first choice when you decide to sell it. And partners like ScaleBrand can help you accelerate the time to reach that milestone – helping you optimize your operations, build your brand strength, and prepare airtight financial records.

Related: 5 Ways to Grow Your Fulfillment by Amazon Business

When Should You Buy an FBA Business

You don’t envy the bustle:

If you are one of those people who can intuitively sense a successful business and have the resources to grow it by leaps and bounds, you should definitely choose to buy an FBA business instead of starting a new one.

While buying a well-run FBA business saves you from having to go through the arduous journey of growing a brand, building a strong review portfolio, and the initial growth phase, it always has her specific needs, like positioning her for a sale.

Your goal with an acquired FBA business should be to make it “exit ready” to eventually sell. “In short, a company is ‘exit-ready’ if it ticks all of the boxes for the attributes acquirers seek. There are dozens of checkboxes to be better prepared,” said Emmett Kilduff, CEO of The Fortia. Group. You need to check and fix attributes that are in less than optimal condition, such as outdated inventory, poor SEO, and low brand recall, to position the business for a profitable sale.

If you can’t identify which attributes to fix, full-service Amazon marketing agencies like Urtasker can help you optimize every aspect of your newly acquired business.

You don’t have a lifetime to invest in the business:

Buying an FBA business, scaling it to the next level, then flipping it for a big profit over what you initially paid is a strategy that attracts many business owners, which can take up to one to two year.

While growing your newly purchased FBA business, you will likely face several challenges, one of which will be inventory management. Inventooly can make your life easier by managing out-of-the-box inventory forecasting and supply chain management, so you can focus on the essentials.

Related: Want to Sell Your Amazon FBA Business? Here are 5 lessons from someone who oversaw $100 million in FBA acquisitions

Which one suits you?

As you juggle the “start or buy” decision, take stock of your skills, risk appetite, and business goals.

If you have an e-commerce background and have the expertise to build and grow businesses online, buying an existing business is the right choice for you. On the other hand, if you can handle the challenges of the growth phase, overcome the first year of near-zero profits, and enjoy working on a new project, you should start your own business.

Your appetite for risk plays a huge role in how you approach any decision in life. If you are risk averse, starting a business from scratch may seem like a better option, given the relatively low capital risk. Otherwise, the higher risk-reward combination of buying a business will work better for you.

Finally, what you intend to do with your business can decide the path you take. Perhaps you are comfortable investing several years in building and growing an FBA business and reaping the significant rewards once you achieve greater success. Alternatively, you might be more inclined to start a new business as a short-term project and sell it at a profit after a year or two.

The choice between starting or buying an FBA business should come down to what you know and what you are willing to learn. You need to assess your expertise and risk appetite when juggling these two decisions. There is no one right answer.

Whatever you decide, growing an FBA business and making it successful takes a lot of effort, both in terms of time and money. Overcoming FBA challenges will be difficult at times, but the rewards at the end of the journey might just make up for that.

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