What is Bamboo Looking For in a Possible Acquisition?
Ideal acquisition prospects for Bamboo will meet most of the following criteria:
Average monthly sales on Amazon between $20,000/mo and $250,000/mo
Gross margin (after all COGS and selling fees) of 25% to 50%
Amazon account and listings in good standing
All or most products being sold are private brands owned by the seller, preferably with applicable trademarks
Established off-Amazon presence: website, social media presence, email list, sales on other marketplaces
Would Bamboo Buy My Account, Business or Brand? And What’s the Difference?
Typically we are looking to acquire brands and thus likely would not purchase your business. This is commonly referred to as an asset acquisition. In some select cases, we might be interested in possibly buying the business itself. Usually there is not much difference from a valuation standpoint, its more about limiting liability and combining efficiencies. In no case would we be interested in buying an account though by itself (without purchasing the company itself) as that is against Amazon’s TOS.
Why Should I Consider Selling to Bamboo?
We typically offer generous terms – most or all cash up front, so there is no risk to you. If you sell your brand for 20% cash up front and then 80% on payment terms, you risk not getting that 80% if the new owner messes it up. That doesn’t happen with brands we buy. Also when you sell your business through a broker you are typically giving up 10-15% of the selling price, so if you sell it to us you keep that as well. Lastly, we’re a knowledgeable buyer. We know what we’re buying and how Amazon works. So selling to us is painless, whereas selling through a broker your business would likely be purchased by someone who knows very little about Amazon and either backs out at the last minute or hounds you with petty inquiries both before and after the sale is finalized.
Will I have to Sign a Non-Compete? Can I Start Up Another Amazon Business Later?
When you sell a business it is a deal that both parties negotiate, so everything is open for discussion. Most commonly, we are generally fine if you choose to sell on Amazon again after the transaction, so long as you are not competing with the product line(s) we just acquired.
What if Bamboo is Not Interested?
As is the nature of acquiring businesses, most of the ones we look at or discuss we don’t actually end up purchasing. That said, we do have a large network of potential buyers and facilitators as well. In some cases we may represent a client of ours who might be interested in acquiring your brand. In other cases, we may be able to refer you to a broker who has interested buyers. So even if we don’t acquire your brand ourselves, we can likely still help you sell it.
What is the Process of Selling my Amazon FBA Private Label Brand to Bamboo?
The first step is to fill out the form on this page to begin a dialogue. We’ll ask a few high-level questions about your business – top level sales, approximate gross margin, types of products sold, etc. We will keep this information confidential. If we are interested, we’ll then ask for some more detailed information and at that time we’re happy to sign an NDA (Non-Disclosure Agreement) before you send us that information. That will include things like financials broken down by product, by month, etc. Then we’ll schedule a phone call to review this and ask any questions we might have. After that, if we are interested then we’ll make an offer on the brand via a Letter of Intent (LOI). This will outline the price we’re offering, the payment terms and other stipulations. This is typically a 1-2 page document so its an easy read! If and when we come to a mutual agreement then we typically conduct a “Due Diligence” period during which we simply verify that the numbers you provided are accurate, and ask you to provide the information we’ll need to take over the brand at closing. This typically takes anywhere from 10 to 30 days. The last step is then closing – we’ll both sign a final sale agreement (this one will be a longer document!) and we’ll transfer the money to your account.
Want to take the first step and see how much your business is worth? Fill out our acquisition interest form on this page to get started.