Buying an Amazon FBA business: what to check before you buy
Short answer
To buy an Amazon FBA business, verify sales and fees directly in Seller Central (live access or screen-share, not exported spreadsheets), then reconcile disbursements to the bank. Check account health and any policy warnings, how concentrated sales are in a few products (ASINs), how much sales depend on Amazon advertising, inventory levels and aging, supplier terms and quality, trademark and brand registry ownership, and how reviews and listings will transfer.
Platform risk is the defining risk: one account suspension can stop all revenue.
Amazon businesses are easy to verify and hard to protect. The data sits in Seller Central; the risk sits with Amazon's policies, competitors and the ad auction.
Verify inside Seller Central
- Sales, units and sessions by ASIN for 24+ months.
- Payment reports and disbursements; match to bank deposits. See proof of cash.
- Fees: referral, FBA fulfilment, storage, returns.
- Advertising spend and attributed sales; total ad cost as a share of total sales.
- Account health, policy notices, IP complaints, past suspensions.
- Inventory on hand and aging; long-term storage fees.
Concentration and dependence
Worked example: what a unit really earns
Amazon takes several cuts from each sale and the seller pays for the traffic, so per-unit economics matter more than the revenue line. Pull them from the payment reports, not the seller's summary.
Illustrative example, not a real product or Amazon's current fees
A product sells for $34.99. Landed cost from the supplier, including freight and duty, is $8.50. Amazon's referral fee in this example is 15%, $5.25, and FBA fulfilment is $6.10. Storage and returns average $1.20 a unit. That leaves $34.99 − $8.50 − $5.25 − $6.10 − $1.20 = $13.94 before advertising. If total ad spend divided by total units sold (not just ad-attributed units) is $6.40, the unit earns $7.54. On 40,000 units a year that's $301,600 before overhead and the owner. Now the test: if the ASIN carries 70% of sales and a competitor drives ad costs up by $3 a unit, profit on that ASIN falls by 0.70 × 40,000 × $3 = $84,000.
Supply chain and IP
- Supplier agreements, lead times, minimum orders, quality records; can you meet the supplier?
- Trademark registrations and brand registry; who owns them.
- Product compliance and certifications for regulated categories.
- Off-Amazon channels (own site, other marketplaces) that diversify risk.
Add-back traps
- Ads paused before sale to show higher margins; sales fall later.
- Owner's unpaid time managing listings, PPC and suppliers.
- Inventory bought just before sale, funded by the business but included "free".
For non-Amazon stores, see ecommerce businesses.
Worked example: what an ad cost increase does
Illustrative example continued, not real ad costs
From the unit example: total ad cost is $6.40 a unit on 40,000 units, $256,000 a year. Ad costs on the main search terms rise 25% as a competitor launches, so ads cost $8.00 a unit. If you keep spending to hold rank, profit falls by $1.60 × 40,000 = $64,000. If you cut ad spend to the old level, impressions fall and sales may drop. Say units fall 15% to 34,000: profit at $7.54 a unit on the remaining units is $256,360, down from $301,600, a $45,240 drop. Either way, a competitor's ad budget can take a large share of the earnings, which is why ad dependence belongs in your price.
The first 90 days after you buy
Don't let stock run out. A stock-out costs sales and rank, and rank is slow to recover, so place the next purchase order before closing if lead times are long. Keep listings, prices, ad campaigns and inventory levels steady while you learn. Get Seller Central, brand registry, advertising and supplier access fully under your control, with every recovery email and phone number updated, and have the seller introduce you to the supplier, ideally on a call or a visit. Then look at the ad account campaign by campaign and at the slowest-moving inventory, and start reducing risk: add a second supplier, build sales outside the marketplace, and launch the next product so one ASIN carries less of the business.
Red flags specific to Amazon businesses
- Spreadsheets instead of Seller Central. Insist on live viewing of the reports, or read-only access.
- Ad spend falling in the months before the sale while sales hold briefly. Organic rank often slides later.
- Review patterns that look manufactured. Incentivized or fake reviews break platform rules and can lead to listing removal.
- Intellectual property complaints or "inauthentic" notices in account health history.
- No registered trademark, or a trademark owned by the seller personally and not included in the sale.
- Sales tax and marketplace questions. Amazon collects sales tax as a marketplace facilitator in most states, but sales through the seller's own site or other channels may create obligations of their own. Ask your CPA.
What an SBA lender will check
Lenders will match tax returns to IRS transcripts and Seller Central disbursements to the bank. They'll focus on platform risk (account health, a single dominant ASIN), inventory as collateral, and who will run advertising and supply after closing. The SBA allows an alternative to a physical site visit for e-commerce businesses. Expect lenders to fund inventory carefully, since it's sitting in someone else's warehouse.
What moves the value of an Amazon business
We don't value deals or publish multiples we can't verify. These are the factors buyers, appraisers and lenders weigh:
| Factor | Supports a higher value | Pulls it lower |
|---|---|---|
| Product spread | Several ASINs with meaningful sales | One ASIN carries most revenue |
| Ad dependence | Low total ad cost relative to sales, steady | High and rising |
| Brand | Registered trademark, brand registry, own site | Unregistered, Amazon-only |
| Account health | Clean history | Past suspensions, IP complaints |
| Supply | Reliable supplier, written terms, backup source | One supplier, no agreement |
| Trend | Stable or growing unit sales | Declining after competitor entry |
Documents to request
- Seller Central business reports and payment reports for 24 months, viewed live.
- Advertising reports by campaign and month.
- Account health dashboard and every policy notice.
- Inventory reports: on hand, inbound, aged inventory and storage fees.
- Supplier agreements, purchase orders, quality inspection reports and landed cost workings.
- Trademark registrations and brand registry ownership.
- Tax returns and bank statements to tie disbursements to.
Account health and policy history
Ask the seller for screenshots, or a live screen share, of the account health dashboard, policy compliance warnings, any past suspensions and how they were resolved, and the history of listing removals. Check intellectual property complaints against the brand and any the brand has filed. Confirm whether the account can be transferred under the marketplace's current terms, or whether the deal is structured as a sale of the company that owns it. One unresolved violation can freeze sales, so ask for a representation in the purchase agreement that the account is in good standing at closing.
Questions to ask the seller
- Can you show me Seller Central business and payment reports live for 24 months?
- Has the account ever had a suspension, listing removal or IP complaint?
- What share of sales comes from your top ASIN, and from advertising?
- Who owns the trademark and brand registry, and will they transfer?
- Have you met the supplier, and is there a written agreement?
- How much inventory is on hand, in transit and on order, and at what cost?
Frequently asked questions
How do I verify Amazon FBA revenue?
Look at Seller Central business reports and payment reports yourself, compare disbursements with bank deposits, and check fees, refunds and ad spend in the same period.
What is account health and why does it matter?
Amazon's measures of a seller's performance and policy compliance. Warnings, past suspensions or intellectual property complaints are serious risks to future sales.
How do Amazon seller accounts transfer?
Transfers must follow Amazon's policies at the time. Many deals transfer the brand, listings and inventory under the platform's rules; confirm current policy before structuring.
Can I get an SBA loan for an Amazon business?
Possibly, under the normal change-of-ownership rules. SBA lenders can use alternatives to a physical site visit for e-commerce businesses; they'll focus on verified earnings and platform risk.
What should I check about inventory when buying an Amazon business?
Units on hand at Amazon and in transit or at the supplier, their landed cost, age, and sell-through rate by ASIN. Agree in the LOI how inventory is counted and priced at closing, because sellers sometimes stock up before a sale and include slow stock at full cost. Aged inventory can also attract storage fees.
What happens to Amazon reviews and rankings after a sale?
Listings, reviews and sales history belong to the product listings, so they generally stay if the brand and listings transfer under the platform's rules. What can change is ranking: if ad spend, pricing or stock levels change during the handover, organic rank can slip. Keep inventory in stock and advertising steady through the transition.
Sources
- SBA SOP 50 10 8.1, Appendix 15 (site visit alternatives for e-commerce)
- USPTO: Trademarks (verify trademark ownership)
- IRS: About Form 1099-K
- Streamlined Sales Tax Governing Board (marketplace facilitator and state sales tax information)
Related guides
General information, not legal, tax, financial or investment advice. Rules and lender practices change; check the linked sources and talk to your attorney, CPA and lender about your deal. Examples with named numbers are illustrations, not real businesses. OKtoBuy's Deal Check does not value businesses or give price opinions.