Move From CEO to Chairman
The right way to achieve freedom from Amazon FBA businesses.
A legitimate pathway to freedom for Amazon FBA entrepreneurs has always been:
build —> systematise —> own the passive income stream —> move onto the next project
With most businesses this is much more difficult. But Amazon FBA businesses lend themselves to systematisation.
There is no need to sell, since the entrepreneur has their time back (which is helpful, since Amazon FBA businesses are generally not saleable*). The passive income stream is valuable and the lifestyle it provides is a worthwhile achievement in itself.
Ultimately the entrepreneur moves from a CEO role to a Chairman role. In this position he or she is able to own and oversee a great many assets, since he or she is not being drawn into the management of any of them.
Reaching “Chairman” level is the North Star for many Amazon FBA entrepreneurs. Getting there is an outstanding achievement.
Read on to learn more.
* Amazon FBA businesses, with rare exceptions, are not saleable. See the FAQ below.
Traps
However, entrepreneurs often fall into one of two traps at the systematisation stage, preventing them from reaching Chairman level:
1) The “Build A Team” Approach
Many entrepreneurs do this. They hire part-time freelancers to take over the different roles that they currently manage, and as the business grows, these people become full-time. Then the roles are restructured and more good people are hired. Then a CEO is hired to manage them. But the entrepreneur rarely finds that they are able to get out of the business in this scenario. They are still involved in hiring and HR issues. They are brought back in to cover whenever anyone important is away on holidays. They notice that performance is suboptimal in every area where they are no longer involved, so they tend to step back in and provide guidance. Often. And when the CEO leaves? The person who is still the real CEO (the owner) is back full-time, until a new CEO can be found and trained.
It's very rare that this approach truly frees the owner of the business.
2) Handing Over To An Agency
So called “full service” Amazon agencies are the wrong people to hand over the management of your business to. These firms are usually great at advertising, since that is their bread & butter. They’ve added on other services over time, but these all tend to be related to marketing and in some cases product development. They are too weak in many areas (supply chain management, financial management, compliance, strategy) to actually operate the whole business. They expect the entrepreneur to remain heavily involved. These agencies can avoid the need for some of the hires in the “build a team” approach, but they cannot truly take over the business.
With both of the above two approaches, the entrepreneur gets some of their time back but cannot truly move on to other things or build more of these assets.
There is a better way.
Amazon BPO Management
If you have a profitable Amazon FBA business ($100k to $2m EBITDA per annum), based in North America, the UK or EU, you should find out if it will qualify to be managed by a business process outsourcing management company rather than an agency. This is like bringing in a CEO with their own team. If you have a team or partial team in place, they will fill the gaps in this team and take over the management. If they will take you on, you can move to “Chairman” level almost immediately.
Hahnbeck works with the market leader in BPO management for Amazon FBA. The best way to access their services is via a referral from Hahnbeck. Some statistics about them:
Based in London, with a team of 40 (many former Amazon executives)
More than $150m revenue under management
Clients include the Amazon brands owned by two of the Dragon’s Den dragons
Across their portfolio clients have grown 175% since partnership inception on average
Across their portfolio client margins have slightly increased on average, while growing
Hahnbeck client businesses have performed exceptionally well in this programme, so we are confident in recommending this solution to other owners of Amazon FBA brands, if they are suitable and meet the selection criteria.
Discuss this approach with Hahnbeck before moving forward. You will receive:
Better advice, right from the start
An introduction to specialist Amazon BPO company mentioned above - they are the best in the business
Preferential rates through our relationship with them
Additionally, Hahnbeck will be on hand for valuation / saleability / market advice when you need it, the entire time your business is under management. You will have access to our advice the whole time.
Next Steps
The quickest way to learn more and to see if your business is a fit for the programme is to book a call with us to discuss it.
The basic criteria are as follows:
At least 80% of revenue via the Amazon FBA platform
A minimum of $100k true net profit per annum
Reasonable levels of stock and working capital
Company entity in the UK, EU, US or CA
If your business qualifies, this is truly the best solution to enable you to move on to other things. Selling is no longer a realistic option. Instead, utilise the expertise of the best-in-class Amazon BPO company. Continue earning passive income from this business, then build another and another. Move from CEO to Chairman.
If you would prefer to send an email instead, no problem. Please send it to info@hahnbeck.com and we will get back to you
Frequently Asked Questions
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Generally speaking, no. Hahnbeck doesn’t even take on Amazon FBA clients any more (with rare exceptions).
The market for Amazon FBA businesses has collapsed. We do not believe it is ethical to waste clients’ time and money on sale processes that will not result in optimal outcomes.
Amazon businesses are often great businesses – but they are not saleable assets in the current market.
The logical next move, for those who don’t want to continue running their business long-term, is to systematise the business and get out. If you are planning to do this, we can help.
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Hahnbeck is the leading M&A firm in the consumer products sector in the UK & Europe and one of the leaders globally. Our clients are fast growth DTC brands, large CPG businesses and corporates who are looking to carve out consumer product brands. We also have clients in the adjacent sectors. We understand this market well.
For a few years from 2020 to 2022, sales of Amazon FBA businesses outpaced the rest of the consumer products sector. We were already in CPG at the time, so we saw this market evolve. We know the founders of many of the aggregator firms, their investors, their lenders.
This market has collapsed.
Lenders are making life extremely difficult for the aggregator firms. News of their demise has spread through the market and Amazon FBA assets are now completely out of favour amongst equity investors also.
The main buyers are now bargain-hunters: opportunistic buyers who are (cleverly) looking to snap up good opportunities at rock-bottom prices. If you absolutely have to sell your business right now, these are the people who you will be selling to.
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Yes.
Any brand has the potential to be a breakout multichannel success story, including those who start on Amazon. We have seen examples of truly outstanding brands that are Amazon-native. If your brand has what it takes to sell for a strong valuation, we'll tell you.
There is a lot to this, but the brand has to have the right combination of brand equity, IP, product category, growth trajectory, size and profitability.
Valuable consumer product brands with these characteristics are almost always multichannel, with retail and DTC as the main two channels. But occasionally Amazon brands have these characteristics too.
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Book a call with the Hahnbeck team to learn more about this programme and see if you qualify. If it is a fit and you would like to proceed, we will introduce you, which is the best way to get access to the programme.
The Amazon BPO firm will then conduct detailed analysis on your business, which will take 7 days and is completely free. You can keep the analysis and there is no obligation whatsoever. They are not salesy, they are highly professional. -
The pricing for this programme is bespoke to each client, but there is always one element that is the same: it is always performance-based. There are no sign-up fees and no fixed fees.
Hahnbeck clients receive preferential rates due to our ongoing relationship with them.
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For Hahnbeck this is merely a way to help those business owners that we can't help with our core M&A services.
As as one of the main M&A advisory firms in e-commerce globally, we have literally thousands of consumer product businesses visiting our website to learn about the valuation & saleability of their business. Many of these are Amazon FBA businesses. The owners of these businesses cannot reliably sell, so if they want to move on to other things, they need a solution. This is the best solution. We are helping them to realise that it exists, to learn about it, to judge if it is right for their specific business, to understand their valuation and their other options. If they are interested in pursuing this option, we support them through it.
Our core business, which is 100% of our focus, is M&A advisory for CPG brands. The vast majority of these are DTC and retail brands and we have a small number of clients in adjacent sectors.