RMRB 1385 – Building an Amazon FBA Business Making $64K per Year in the Automotive Niche

In this episode, Lauren talks to the seller of an Amazon FBA and eCommerce business created in November 2023 in the automotive niche. Listen in to find out how the business makes an average of $64,666.00 per year in net profit, why the seller has decided to sell, the lessons learned from running the business, and much more.

Visit https://empireflippers.com/listing/98059 to learn more about this business.

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Transcript

Forget gurus. Forget anyone claiming to be an online business expert without going through the challenges of entrepreneurship themselves. The Real Money, Real Business Podcast is here to prove that the best insights in online business come from your fellow online business builders. We dig into the stories of entrepreneurs selling their businesses on the Empire Flippers Marketplace so that you can learn how they made their businesses profitable, how they overcame obstacles, and what lessons they learned on their online journeys. If you want to take your business and your knowledge to the next level, you've come to the right podcast. Let's get started.

Hey, everyone. Welcome to another episode of the Real Money, Real Business Podcast. We record these interviews so that potential buyers can learn more about the business and the seller to help them make an informed buying decision.

If you would like to learn more about this business, including details like what type of business it is, how much revenue and profit it makes, and all of the assets included with the business, simply visit empireflippers.com/marketplace and search for this business's listing number, which you can find in the video thumbnail and in the description. Or, if you're watching this on YouTube, you can click the link in the description to go straight to the listing.

So, without further ado, let's get into this interview. First up, let's learn a little bit about you. Can you tell us about your background in building and running online businesses?

Hello, everyone. This is Gokani Vus. We started in 2023 and built the business from scratch. My professional background is in financial technology and product management, and I currently work as a senior product manager at a financial technology company that works with banks.

Over the past three years, I have grown Aligo Parts into an international e-commerce business selling automotive replacement parts and accessories across Amazon, eBay, and Shopify. I have managed everything from product research and supplier negotiations to marketplace expansion, advertising, and logistics. Over time, I have streamlined operations so the business now requires relatively little time to manage the products I'm selling today.

Why are you selling the business now instead of keeping it and growing it further?

I would like to sell because I would like to invest my time in my existing career in financial technology. I would also like to spend more time on AI opportunities and the SaaS projects I would like to start.

I have really enjoyed building this business, and I think it's in a very good position, with the comments, feedback, and all the details on the website and Amazon and eBay accounts. It has much more potential with someone who can dedicate additional time to growing it. There is also a lot of potential if someone makes more investment in the business and expands the number of products. Basically, I just want to focus on new business opportunities outside of e-commerce.

Can you describe the amount and type of work you do on this business to maintain it?

Basically, we currently spend around six to seven hours per week managing Aligo Parts. I haven't put in this effort over the last four or five months, and you can see it in the sales as well. They decreased a little bit.

My main activities are monitoring sales and inventory, ordering products from suppliers, managing advertisements and campaigns, responding to occasional customer inquiries or invoice requests, and checking overall business performance. Many of these activities can also be automated with AI agents, which I can help the new buyer with as well.

Most of the fulfillment is handled by Amazon FBA, and I work with freight forwarders who manage my international shipments and customs clearance. The operational process is well established, which makes the business manageable alongside my full-time job.

So, if you were to keep this business, what are some of the ways you would try to grow it?

Regarding growing the business, I see several opportunities. First, I would expand the product catalog. The automotive parts market is so big, and there are many opportunities to introduce new products using our existing supplier relationships. I have really good relationships with my suppliers.

Secondly, I would focus on growing international sales, especially in the EU, where sales have increased for some products. The US and Australia have only a limited selection of my products, but there is a great opportunity to increase the number of products and make more profit in those markets as well.

Currently, I'm not investing a lot of time in eBay and Shopify. Given that I have another full-time job, I don't want to increase my day-to-day activities by preparing packages and deliveries. That's why I keep my focus on Amazon FBA. But there's a great opportunity to spend more time on the website and eBay to increase both revenue and profitability.

Another opportunity is improving product margins. During my trade exhibitions in Istanbul, I negotiated potential cost reductions of around 20 to 25% for some taillights, and I would be happy to introduce these suppliers to the buyer. Currently, I'm not selling these bigger parts because it would be better for someone to invest more and transfer more products. If you're transferring only two or three pallets of these products, the cost increases.

Finally, advertisements and campaigns can be optimized, and improving the existing product listings could help increase sales and profitability. We keep improving the quality, given that Amazon is introducing new functionalities. But there's still some work to be completed in that area as well.

Right. And what would you say are the biggest risks with this business that buyers should be aware of?

The biggest risk is that this is an e-commerce business, so there's marketplace competition. Amazon and eBay policies change from time to time. Advertising costs and inventory management are also very important. If inventory isn't managed correctly, fast-selling products might go out of stock, and you could lose those sales to other sellers on different marketplaces.

It's a very competitive market, but it's also a very large market. There are different product categories and products that are very profitable. It requires more dedicated time for inventory management and bringing those different products into inventory.

I try to manage the risks by selling across multiple marketplaces, maintaining my supplier relationships, and monitoring inventory and profitability across the different platforms. I think I'm getting the products at very good prices. For some products, I'm even able to sell them at better prices than the supplier, who also sells on Amazon.

These prices could be reduced further because I'm sending small shipments from China. Someone willing to invest more in these automotive parts could bring them in large containers, making the products more profitable and reducing shipping costs.

The new owner should monitor marketplace performance and adapt the products and advertising strategies. Conditions are changing on the marketplaces, but if the new owners dedicate more time, I think there's a greater opportunity for growth and profitability. I saw this when I spent more time on it a year ago: sales increased significantly. But because of my limited time due to my other business, I spend less time on it, and profitability and revenue have decreased.

How much support are you willing to offer the buyer who acquires this business?

I'm happy to provide 60 days of post-sale support through email, phone, and video calls. This will include explaining the daily operations of Aligo Parts. I will share all the details about my suppliers and freight forwarders, review inventory management together, and explain the advertisements on Amazon and eBay and how to source products.

I'm happy to help with each marketplace. I can explain what I'm doing on the different marketplaces, and I want the new owner to understand how everything works and feel confident managing the business independently.

Also, if the new owner is already in this business, selling multiple other products in automotive parts, I'm happy to help with creating listings and speeding up the process of adding those new products to the new owner's stock and inventory.

Are you open to negotiating something like an earn-out agreement?

My preference would be a straightforward sale, with the full purchase price paid at completion. However, I'm happy to discuss reasonable proposals depending on the overall offer and payment structure. Ideally, I would prefer a clean transition so I can focus on my other projects while providing the agreed handover support.

Okay, final question: If you had to put yourself in the shoes of a buyer, why is your business worth buying?

I believe Aligo Parts offers an attractive opportunity because the difficult initial work of establishing the business has already been completed. The business already has all the sales accounts on Shopify, with the website, eBay, and Amazon. I have already attended lots of exhibitions in the automotive sector and have existing supplier relationships, marketplaces, and international sales channels. The operations are straightforward as well, with Amazon FBA, and require six to seven hours per week of my time. With the existing SKUs and products, it's also a great opportunity for further growth.

A buyer wouldn't necessarily need to build everything from scratch. They could focus on expanding the product catalog, entering additional markets, improving the advertising, taking advantage of the supplier relationships, and increasing the number of different parts in different markets. For someone with e-commerce experience who is looking to buy an established online business, I believe Aligo Parts provides a good foundation with opportunities for further development.

The reviews are also very important for this kind of e-commerce business. I always provided the best customer experience and support across the different platforms, and you can see all the great comments and feedback on each marketplace. That's very important, and I spent a lot of time and money on it. I didn't dispute returned items. You always pay extra to make customers happy and send new items to them, sometimes multiple times, to keep them happy and maintain the business's great feedback.

All right, everyone, thanks for listening. To learn more and see if this business is still for sale, head over to empireflippers.com/marketplace and search for this business's listing number, which you can find in the video thumbnail and description. Or, if you're watching this on YouTube, click the link in the description to go straight to the listing.

Once you've unlocked this listing, you'll find everything you need to know about this business. So, thanks for joining us. See you next time. Sam.