Issue 103: The relationship between real estate and eCommerce
Hello, MyFBAPrep Sellers!
In our latest interview series, Jeff Vertun of CBRE explains the impact of real estate on 3PLs, warehousing, and eCommerce in general. Then learn about how to sell your business at max valuation, and essential Amazon sales tax information every seller should know.
The Role of Real Estate in eCommerce: A Chat With Jeff Vertun of CBRE
In this video, Rachel chats with Jeff Vertun, CBRE’s senior vice president of advisory & transaction services. Their discussion covers Jeff’s foray into commercial real estate, recent property price fluctuations, what to consider when selecting a warehouse location, and more.
How to Value an Amazon FBA Business and Sell It for Peak Profit
Determining the right valuation for your Amazon FBA business can be tricky. If you set the price too low, you could be leaving money on the table. But if you set it too high, you might scare off potential buyers.
Calculating the value of your business
Valuation formulas differ slightly across the industry, but here’s the one used at Empire Flippers:
Net Profit x Multiple = Valuation
Net profit plays a big role in this formula because, in most cases, the more money your business makes, the more it’s worth.
Net profit can be done with SDE or EBITDA using a rolling 12-month average. The multiple represents how stable, defensible, and poised for growth your business is. The higher it is, the more attractive the business, and thus the greater the valuation will be.
Factors that go into determining your multiple are:
- Growth patterns
- Earning stability
- Brand protection
- Supply chain
- Business age
- Owner involvement
Learn how to value your business and things to consider.
Keep up with booming sales on any channel
Establish your brand and provide a 5-star delivery experience across any sales platform.
Work with MyFBAPrep to ensure your stores stay stocked and products flow seamlessly into FBA or anywhere else you sell whenever you need to replenish.
Essential Amazon Sales Tax Tips
Sales tax is a percentage of the sale price that a seller collects at the point of purchase and then pays to the government. It’s not a part of your revenue. Instead, it’s a fiduciary duty that you perform on behalf of the state.
Every time a customer buys a product from you, you may need to add a sales tax to the price. It depends on the state laws where each shopper lives. Not all states require sales tax collection.
However, for those that do, the rate can vary significantly between each state, county, and city. This means you must stay on top of the specific sales tax rates and rules for every sale.
Stay informed and compliant when it comes to Amazon sales tax.
Top Industry News
How Ecommerce Brands Can Achieve Logistics Efficiency With Multi-Client Fulfillment Centers (Ink42)
As the need for fast delivery becomes increasingly important, new facilities are fulfilling it through distributed inventories by strategically placing goods near high-demand areas.According to enterprise commerce firm ESW, improved distribution can greatly benefit online brands and increase their competitive edge by more than 85%. In addition, modern warehouses provide flexible storage solutions as ecommerce companies require additional storage during festivities and seasonal sales. It is convenient to house one’s inventories where storage can be predicted, planned and scaled up or down, eliminating the difficulties of coping with space crunch or excesses.
Alibaba’s Global Arm Signs David Beckham as International eCommerce Brand Ambassador (CNBC)
Soccer star David Beckham will promote Alibaba’s international e-commerce platform, AliExpress, in its biggest global brand ambassador partnership to date, the business unit announced Monday. The deal comes against the backdrop of China-based rivals PDD Holdings’ Temu and online fashion startup Shein’s rapid global expansion, with the former also advertising at the Super Bowl to gain traction with U.S. customers.
Adani Looks to Battle Reliance, Walmart in India’s eCommerce, Payments Race (TechCrunch)
India’s energy and infrastructure giant Adani Group is plotting a move into digital payments and e-commerce, according to a Financial Times report, as the conglomerate seeks to diversify its portfolio and compete with Mukesh Ambani’s Reliance, Amazon, and Walmart’s Flipkart and PhonePe. Adani is considering applying for a license to operate on India’s Unified Payments Interface (UPI) and is also finalizing plans for a co-branded credit card with banks, the report said. UPI is a public digital payments network that has become the most popular way Indians transact online.
Home Depot Teams With Instacart to Bolster eCommerce Offerings (PYMNTS)
Home Depot teamed with Instacart to offer customers same-day delivery on home improvement products. The partnership offers delivery in as fast as an hour from nearly 2,000 stores.
Walmart’s 3D eCommerce Platform Realm is the Retailer’s Latest Metaverse Bet (Modern Retail)
Launched on Wednesday, the new e-commerce platform from the world’s largest retailer lets people shop digital doubles of select products sold at real-life Walmart stores via virtual bazaars designed to look like outlandish, make-believe worlds. There’s “So Jelly,” an underwater universe, “Y’allternative,” a frontier where the Wild West meets Gothic aestheticism and “Go Chromatic,” a metallic environment seemingly set in the middle of outer space. Currently, Walmart Realm is a website that can be accessed on a desktop or mobile phone. To shop, users click on various objects in the virtual stores, click an “Add to cart” button, and then a checkout link that takes them to Walmart.com.
Amazon Returns Have Gone to Hell (The Atlantic)
According to the National Retail Federation, one-seventh of the $5 trillion worth of retail goods sold in the United States in 2023 were returned. Online retail, which now accounts for about one-quarter of all sales, grew, in part, on this foundation. If you can’t see and touch goods that you’re about to buy, then you don’t ever really know what you’re going to get, and you might be disappointed. Free shipping and returns have helped consumers hedge that risk. But free for you doesn’t mean free for the retailers, which lose a lot of money on restocking and refurbishment.
INSIGHT: USA E-Commerce Logistics Market Report 2024 (Parcel & Postal Technology)
Due to the unrelenting growth of online shopping and the unquenchable need for quicker, more convenient delivery, the United States e-commerce logistics business is seeing rapid expansion. It is anticipated that the US e-commerce market will develop significantly over the next five years, with estimates suggesting a rise of around US$388.4bn, or 51.28%, annually.
Until next time,
Rachel Andrea Go
Marketing Director, MyFBAPrep