Hello, happy Friday, and welcome to a special edition of my regular “Flippa Friday” post, this week focused on Amazon FBA businesses. If you don’t know what that is, don’t worry – just keep reading and I’ll fill you in. Like past weeks, I’ve scoured Flippa looking for good potential online businesses to buy and grow. Given the incredible growth of Amazon FBA businesses, and all the awesome FBA’s listed on Flippa, I felt it would be fun to do a dedicated post just for them, and this is that post
On that note, let’s dive in – here’s the first FBA business that caught my eye
As you probably know by now, FBA businesses have been thriving and it looks like the market is going to see strong growth this year. If you don’t know what an FBA business is – I’ll break it down. FBA stands for “Fulfillment by Amazon” and here’s the description from Amazon themselves:
Fulfillment is the process of storing, packing, and shipping orders as well as handling returns and exchanges. Effective, reliable ecommerce fulfillment delights customers. With FBA, you send your products to Amazon’s fulfillment centers, and we pick, pack, ship, and provide customer service for those products.
(Source – Amazon)
It’s not surprising these businesses have done well. With so many consumers shopping online the demand for category-specific or product-specific eCommerce stores growing, it’s always fun to see stores doing well with products I wouldn’t have thought would work well with this model.
The business I highlighted above is an FBA business selling licensed sports gear. A few things caught my eye when I saw this site:
- the store is three years old – I tend to gravitate towards businesses that have been running for at least two years. It feels like this helps to de-risk the monthly revenue numbers.
- growth – growing 50% per year is nice, I’d probably want to ask the seller what’s driving the growth so I would know how much time I’d need to put in to sustain it.
- product category – this is a fun product category for someone who is into sports, I could see it being a site that someone actually has fun updating and playing around with.
- revenue – the site is doing over $4,000/mo in revenue. I’d want to dig in to see how long it’s been in the current revenue range and if there’s any revenue spikes in the last year that might be worth looking-into more. That being said, if it all checks out, this is great cashflow and makes the $95k price tag feel okay.
Since the seller on this listing doesn’t seem to have sold a site through Flippa before I’d probably want to use Flippa’s Due Diligence service just to make sure I know what I’m getting.
Sticking with the FBA theme this week, here’s another business that caught my eye, and for similar reasons. With three years in business and over $4,500/mo in revenue, that’s interesting. At the same time, one key thing I’d want to look-into more is why the profit margins are so small. Doing the math, the site costs ~$3,500/mo to operate, now if this is all relatively passive, that might not be a bit deal, still, I’d be interested to understand more about the margin model on this one.
All that being said, I think it’s an interesting site, and generating revenue from three products is nice since you won’t have to worry about managing a large product catalog. Here’s a rundown of the highlights for me, trying not to repeat myself too much from what I just said!
- store age – just like above, over two years old which I like.
- small product catalog – personally I’d rather sell a handful of more expensive products than lots of inexpensive products, that could just be me but it feels like a lot less to manage.
- crafts category – I think the DIY crafts category is a good place to be online, it feels like a site with good potential to update and tweak over time in a category that is positioned for strong growth
Okay, that’s in from me for this week, for those reading here in the US, happy 4th! And for anyone else – have an awesome weekend and as always, thanks for reading!
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