E-Commerce Business Sales, Mergers, and Acquisitions

Why It’s Important

Customer data is one of the most valuable assets in an e-commerce sale, but it is heavily regulated under GDPR, CCPA, and other data protection laws. Mishandling data transfers can result in compliance risks, fines, and reputational damage.

How to Ensure a Legal Data Transfer

For Buyers:

• Verify that all customer data was lawfully collected, and customers have provided explicit consent for marketing communications.
• Ensure the sale agreement includes a GDPR-compliant data transfer clause, detailing how customer information will be securely migrated.
• Conduct a privacy policy audit and update terms if required for post-sale compliance.

For Sellers:

• Provide documentation confirming customer data collection complied with GDPR and other regulations.
• If data is stored on third-party platforms (e.g., Shopify, Mailchimp, Klaviyo), confirm that it can be legally transferred to the buyer.

Why It’s Important

Amazon’s Terms of Service do not allow direct seller account transfers, which complicates the sale of Amazon FBA businesses.

How to Transfer an Amazon FBA Business Legally

For Buyers:

• Acquire the legal entity (if the business operates under a limited company) so the Amazon account remains active.
• Negotiate a handover period, where the seller continues managing the account post-sale before a gradual transition.
• Ensure supplier and fulfilment agreements remain intact to avoid disruptions.

For Sellers:

• Notify Amazon Seller Support about the change in ownership to prevent suspicious activity flags or account freezes.
• Provide full business performance history, supplier contracts, and inventory records to reassure buyers.

If the buyer cannot use the existing account, assist in setting up a new seller account with a structured transition strategy.

Why It’s Important

E-commerce businesses often rely on long-standing supplier relationships, and a change in ownership can result in contract renegotiations or supplier terminations.

How to Avoid Supplier Issues

For Buyers:

• Ensure supplier contracts are transferable and confirm continued partnerships before finalising the deal.
• Request a seller introduction period, where the seller personally introduces the buyer to key suppliers.
• If direct transfer is not possible, negotiate new agreements with suppliers on similar terms.

For Sellers:

• Disclose all supplier contracts, Minimum Order Quantity (MOQ) requirements, and pricing terms upfront.
• Offer to act as a post-sale consultant, assisting in supplier negotiations.
• If a key supplier refuses to work with the buyer, suggest alternative suppliers to ensure continuity.

Why It’s Important

E-commerce businesses often operate globally, meaning buyers may inherit unpaid VAT, GST (Goods and Services Tax), or sales tax liabilities across multiple jurisdictions.

How to Manage International Tax Risks

For Buyers:

• Confirm whether the business is registered for VAT, GST, or sales tax in different countries.
• Ensure that any outstanding tax liabilities are settled before closing the transaction.
• Work with tax specialists to determine the best structuring approach for international operations.

For Sellers:

• Provide a clear tax breakdown of revenue generated across different regions.
• If tax filings are outstanding, resolve them pre-sale to prevent deal complications.

Why It’s Important

Affiliate programs and influencer marketing drive significant revenue for e-commerce brands, but these relationships often depend on the seller’s personal connections.

How to Retain Affiliate and Influencer Partnerships

For Buyers:

• Negotiate a transition period, where the seller introduces the buyer to key affiliates and influencers.
• Offer commission-based incentives to encourage continued collaboration.
• If the seller has a personal brand tied to the business, negotiate a temporary marketing agreement, where they continue endorsing the brand post-sale.

For Sellers:

• Provide a detailed contact list, agreement terms, and performance metrics for affiliates.
• If influencer marketing is tied to the seller’s personal brand, suggest alternative branding strategies to maintain engagement.
• Work with the buyer to ensure a seamless transition to prevent sales drops.