E-commerce, Creator & Digital Businesses · Buyer guide
Buying an Amazon FBM / Merchant-Fulfilled Business business
Published · Reviewed by The Diligence Standard Team · Updated
FBM can produce attractive margin or enable bulky/specialty products, but the buyer must diligence both Amazon platform risk and a real fulfillment operation with shipping promises, labor and warehouse costs.
How the business works
Merchant-fulfilled Amazon economics combine marketplace demand with warehouse, labor, shipping, service-level and inventory execution that the owner controls directly.
Risks to test
- Amazon account or listing policy exposure
- Shipping cost inflation
- Warehouse and labor dependency
- Late-shipment or service-level deterioration
- SKU concentration
- Inventory obsolescence
- Owner controls carrier/vendor negotiations
Evidence to request and reconcile
- Amazon order/business reports
- Carrier invoices and zone reports
- Warehouse labor/time data
- Inventory aging
- Account Health records
- SKU-level margin files
- Returns/refunds
- Lease and equipment schedules
Decision questions
- What does fulfillment really cost by order and zone?
- Can current shipping SLAs survive new ownership?
- What warehouse labor is required?
- How concentrated are sales and profit by ASIN?
- What account-health issues exist?
- Which carrier discounts transfer?
- What inventory is slow?
- What owner role exists in operations?