Preparing Your Amazon Business for Sale: Compliance and Due Diligence Checklist

Preparing Your Amazon Business for Sale: A Compliance and Due‑Diligence Checklist

Selling your Amazon business is an exciting milestone, but a hasty exit can leave money on the table or expose you to post‑sale liabilities. Whether you’re planning a full sale or bringing in investors, buyers will scrutinise every part of your operation – from financial statements to trademark ownership and account health. To maximise your valuation and avoid unwanted surprises, you need to prepare well in advance. Here’s how.

Understand why due diligence matters

Due diligence is the process through which a potential acquirer evaluates a company’s assets, liabilities and overall health. Its purpose is risk mitigation and informed decision‑making, helping buyers verify information and uncover issues that could derail a deal. When you prepare your business for sale, you essentially perform due diligence on yourself so that nothing catches you off guard during negotiations.

Know the four pillars of due diligence

An effective sale preparation covers four types of due diligence:

Financial due diligence: Buyers will analyse your income statements, cash flow and balance sheets to assess profitability and sustainability. They’ll look at revenue sources, cost structures and margins, and may appraise assets and liabilities. A typical Amazon FBA business runs on a 16–20 % net margin; if yours deviates significantly, be prepared to explain why.
Operational due diligence: This focuses on how your business is managed – processes, workflows, leadership structure and supply‑chain logistics. Buyers will assess whether your systems can be scaled or integrated easily. Document your SOPs, highlight efficient fulfilment processes and address any fulfilment metrics that are below Amazon’s targets (e.g., <1 % order defect rate and <4 % late shipment rate).
Commercial due diligence: Acquirers will evaluate your market position, customer base and growth opportunities. They may conduct market research to understand niche trends and competitive dynamics. Be ready to present data on market size, trends and competitors; tools such as Helium10, Jungle Scout and Google Trends can help. Provide evidence that your products hold strong reviews and conversion rates, as review quantity and star ratings are a moat against competitors.
Legal due diligence: This involves examining corporate documents, contracts, compliance with regulations, intellectual‑property rights and litigation history. Ensure your operating agreements, vendor contracts, trademarks and patents are in order. Check that your business complies with Amazon policies and relevant laws (e.g., product safety, taxes, data protection). Failing to properly document IP ownership or transfers is a common deal‑breaker.

Build your internal checklist

Use the following steps to prepare your Amazon business for sale:

Organise financial records. Prepare up‑to‑date profit‑and‑loss statements for the last three years, along with balance sheets and tax filings. Break down revenue by channel (Amazon marketplace, Shopify, wholesale) and provide explanations for any anomalies. Buyers will verify these numbers against Seller Central reports.
Audit account health. Check your Account Health dashboard and ensure there are no unresolved policy violations or pending suspensions. Document your seller metrics (order defect rate, late shipment rate, valid tracking rate) and address any gaps before listing your business.
Document operational processes. Gather SOPs, supply‑chain diagrams and supplier contracts. Outline lead times, payment terms and inventory management practices. High restock limits and a strong Inventory Performance Index (IPI) score will reassure buyers.
Review customer metrics and reviews. Provide data on sessions (traffic), conversion rates (unit session percentage) and review ratings. Highlight strategies you’ve used to maintain high star ratings, as moving from a 3.5‑star to a 5‑star listing can increase conversions by 12 %.
Ensure legal compliance. Collect corporate documents (articles of incorporation, operating agreements), contracts and licences. Confirm that trademarks are registered and assigned properly, and that any brand registry is under the correct entity. Verify that you comply with Amazon’s Business Solutions Agreement, especially Section 18, which requires Amazon’s written consent for account transfers. If you plan to sell the account outright, start the Section 18 request early to avoid delays.
Prepare for buyer questions. Anticipate questions about your niche, competition, growth opportunities and potential risks. Create a fact sheet summarising the strengths and weaknesses of your business. Honest disclosure builds trust and prevents renegotiation later.

Best practices from M&A professionals

Experienced M&A attorneys recommend several best practices to streamline due diligence and negotiations. These include establishing clear objectives and timelines, assembling a multidisciplinary team (accountants, lawyers, operations experts), creating a comprehensive checklist and conducting thorough document reviews. Effective communication with stakeholders and the ability to adapt your strategy as new information emerges are also critical.

Final thoughts

Preparation is the key to a successful Amazon business sale. By organising your financials, documenting your operations, verifying legal compliance and anticipating buyer concerns, you not only maximise your business’s value but also smooth the path to closing. Remember: buyers are looking to manage risk. If you provide transparency and demonstrate strong compliance with Amazon’s policies, your business will stand out in a crowded marketplace. When in doubt, consult experts in Amazon M&A and compliance to guide you through the process.