There are a number of agencies on the market that value Amazons FBA, specializing in the resale business of private brands. Sellers want to know the value of their own brands, and see the following ~ Amazon FBA is one of the most profitableThere are a number of agencies on the market that value Amazon's FBA, specializing in the resale business of private brands. Sellers want to know the value of their own brands, and see the following ~
Amazon FBA is one of the most profitable product (brand) operation modes at present. At the moment when Amazon's FBA business is booming, many brand owners or holders suddenly look back one after another and weigh the value of the brand in the platform.
They should carry on the past and make progress, or stop when it is good. Pinning down the actual value of the FBA business can be a daunting task.
There are two valuation formulas: SDE and EBITDA.
SDE vs. EBITDA
SDE is disposable income for sellers and EBITDA is income before interest, tax, depreciation and amortisation. In general, sellers with annual turnover of $500,000 to $1 million apply to SDE valuations, while companies with annual turnover of $1 million or more apply to EBITDA.
SDE= Revenue - Cost of Goods Sold - Operating Expenses + High Salary of Dong Jian. You can probably figure out the "residual value" of the company.
EBITDA= Net Income + Interest Expense + Depreciation Expense + Amortization Expense + Taxes. Numbers calculated in this way are roughly intended to show potential buyers the profitability of a company.
Several variables affecting valuation
· "Youth" of the company
The duration of the business will indirectly affect the buyer's assessment of the company's business sustainability and future profits. Although some buyers for many reasons, or prefer the fledgling company, this may be a form of charm, but more important to most of the buyers or qualifications, "often walk along the river bank which have not wet shoes", enterprise's duration is long enough, that there is a certain compressive ability, risk burden, this will ease the pressure on buyers a lot.
· Industry trends
No one likes to pick up a mess, and no one wants to change jobs. In a promising sector, especially one where most people understand that growth can be sustained over a long period of time, buyers are naturally attracted to the idea that the money will come back.
· The degree of participation of the actual shareholder
Most buyers are looking for businesses that allow them time to focus on growth without having to worry about running them, and they often hold several businesses. In this case, buyers are more interested in passive income.
· Financial results
Financial statement is the chronicle of company achievement namely, financial condition is a section that buy a hand to go up extremely, inventory is too much or too little can be in its heart greatly discount, financial report is the report card of the enterprise, must take seriously.
Many companies focus on a specific niche market because that can be an advantage, but diversification is more important to highlight the business level of a company. If you focus on a single area, your business line will be very thin, your ability to resist pressure will be questioned, and buyers will be more inclined to have a rich business.
2021.5.20How do Amazon sellers value their FBA business?