Fun fact: In 2020, almost half of Amazon’s sales came not from Amazon directly but from third-party sellers. And two-thirds of those independent sellers -- or more than two million retailers worldwide -- used Amazon’s FBA (Fulfillment by Amazon) platform. With FBA, sellers of products are able to tap into Amazon’s order fulfillment and shipping services to distribute their wares. Hence, the FBA mantra: Sellers sell, Amazon ships. This information in this article is for owners of Fulfillment by Amazon businesses or those teaching others how to sell on Amazon. Some of these principles will apply to Amazon Delivery businesses, but delivery businesses tend to operate more like local brick-and-mortar shops (albeit with a heavy dependency on Amazon). If you’re a seller of widgets, FBA might be the service for you. If you’re thinking about selling your widget-selling FBA business, Morgan & Westfield is most definitely the service for you. Check it out ... Table of Contents Minimum Requirements for Selling an Amazon FBA Business Prepare Your Amazon Business for Sale Reduce Dependency Increase Barriers to Entry Maintain Clean Financial Statements Create a Comprehensive Training & Transition Plan Develop a Persuasive Reason for Sale Prepare for Due Diligence Build Infrastructure...

A prerequisite to understanding how to value your company and how to increase the value of your business is understanding how buyers think. This article will take you into the mind of a potential buyer of a technology or software company and provide you with an overview for why they make acquisitions and what is important to them when they are considering making an acquisition. Having knowledge regarding the underlying drivers of M&A activity in the technology marketplace is also helpful to accurately predict long-term trends within your industry and broader macroeconomic trends that may affect the value of your business. This knowledge can be used to manipulate the drivers of value for your company -- in other words, knowing what impacts the value of your company helps you maximize the value of your software, tech, or online business. It’s important to understand industry dynamics since that’s what drives acquisitions. There are two important things to take into consideration: Demand for Software: The demand for software in general will continue to increase, which will increase the overall volume of acquisitions. This will continue to make software companies attractive as acquisition candidates. The Cycle of Innovation: It is important to understand...

Business Description: B2B Software for the Transportation Industry Let’s take a field trip! Today, we will look at the details and the decision-making process that went into preparing a specific company for sale in the competitive world of software providers. The subject company in this case study is a B2B software provider in the transportation industry that integrates multiple functions for fleets, such as accounting, scheduling, and payroll. The industry is fragmented, with sufficient room for niche products, and is not a winner-take-all market, as is the case with many industries in which software is sold. The majority of the company’s revenue is generated from a recurring quarterly support fee. The owners are retiring after operating the business for three decades. They wish to sell before a competitor introduces a new innovative product that may end up dominating the market, thus rendering their software obsolete and destroying the value of their business. The market is fragmented but ripe for consolidation, possibly by a large competitor who could vertically integrate software in the industry, or by smaller, more agile competitors who could out-innovate the company’s software and their value proposition. Where to start? With the value drivers, of course ... Table...

In a recent survey, Consumer Reports found that a “modern/updated kitchen” still rules when it comes to ideal home features among home buyers. When it comes to shoppers of tech, software, or other online businesses, recurring revenue is the most attractive enticement. And just as there are any number of other actions you can take to increase the value of a house -- finishing a basement and painting high-traffic areas come to mind -- there are steps you can take to enhance the value of your tech, software, or online business. These actions are called "value drivers," and in this article, we'll discuss the top ones. Specifically, we will: Introduce you to the theory and importance of value drivers. Outline the top drivers of value that can impact the value of your tech, software, SaaS, or online business. Identify specific steps you can take to improve the value of your business. What are you waiting for? Table of Contents An Introduction to Value Drivers An Important Note on the Range of Values A Note on General Preparedness for Technology Businesses Value Driver #1: Increase Recurring Revenue Value Driver #2: Document Comparable Transactions Value Driver #3: Prepare a Buyer List Value...

There are many factors to take into account when it comes to calculating the value of a company. The process gets even trickier if it’s a tech, software, or online business. The procedure for valuing any business is the same: calculate its SDE or EBITDA and then apply a multiple. In some cases, a tech business may be valued based on revenue. However, multiples are significantly different for tech, software, and online companies. And the factors that affect the multiples are different as well. Those considerations include: Scalability of the business Levels of risk and how they are addressed Recurring revenue Contracts The company’s growth rate The condition of the online code, and The cost to replicate the business. In the following article, you’ll learn about the various valuation processes and formulas, and the steps you can take to increase the value of any tech, software, or online company. Ready when you are ... Table of Contents The Valuation Process for Tech, Software & Online Businesses Valuation Formula for Tech, Software & Online Businesses Method #1: Multiple of EBITDA Method #2: Multiple of Revenue Deciding Which Method to Use EBITDA Multiples for Tech Businesses Factors that Affect the Multiple Factor...