Amazon FBA Business Due Diligence

Once an FBA acquisition reaches the letter-of-intent stage, diligence shifts from evaluating the opportunity in general terms to verifying specific, checkable facts against Amazon’s own systems and the seller’s underlying documentation. Because so much of this business’s value sits in a platform-controlled account and a trademark registration rather than physical assets, the verification here looks more like checking legal and platform records than counting inventory on a shelf.

Confirming the trademark actually supports Brand Registry

Pull a direct search of the Canadian Intellectual Property Office’s trademark register — or the equivalent register in the jurisdiction where the mark is filed — and confirm the registration is current, unexpired and actually held by the selling entity rather than by an individual founder or a former partner who never formally assigned it. Brand Registry status is only as solid as the trademark underneath it, and a registration that turns out to be contested, expired or held by someone other than the seller can unwind the entire commercial benefit the buyer thought they were acquiring.

Reading the account health and review history for manipulation

Get direct access to the account health dashboard rather than a summary from the seller, and look specifically for suspension history, policy warnings, and order-defect trends over a period long enough to show a pattern rather than a snapshot. Separately, review the pattern behind the reviews themselves — a sudden spike in review volume, a cluster of reviews with similar wording, or any indication of undisclosed paid or incentivized reviews is one of the findings most likely to end a deal outright, since review manipulation discovered by Amazon after closing can trigger an account suspension the buyer inherits with no recourse against the seller who caused it.

Import and customs exposure you’re inheriting

Bringing private-label or bulk stock into Canada or the United States for fulfilment by Amazon triggers customs valuation, duty and GST/HST self-assessment obligations at the border, and a buyer should confirm the seller has actually been meeting these obligations rather than assuming compliance because nothing has gone wrong yet. Separately from any border-related obligations, check whether the sale of the underlying business assets itself qualifies for the standard election that lets an asset purchase proceed without GST/HST being charged on the transaction — a mechanism worth confirming with an accountant rather than assuming applies automatically. Ask for recent import documentation and confirm there is no outstanding CRA debt attached to the selling entity, since an unresolved tax liability can follow the business in ways that are much harder to unwind after closing than to identify beforehand.

The supplier and inventory handoff

Alongside a search of court judgments and executions registered against the selling entity — which can surface liens or claims that might otherwise attach to the business after the sale — confirm which purchase orders currently in transit or awaiting fulfilment can actually be redirected to the buyer’s entity without triggering a stock-out during the transition, since a gap in inbound inventory right after closing can stall sales at exactly the moment a new owner most needs momentum. Review the supplier contracts themselves for anti-assignment language that would require the supplier’s consent before continuing to deal with a new owner, and treat any supplier relationship that exists only as a verbal arrangement, with nothing in writing, as a genuine transition risk rather than a minor detail.

Verifying the recast earnings the seller presented

Where a seller has presented recast or adjusted earnings rather than the raw profit-and-loss figures, treat every add-back as a claim to be verified rather than accepted at face value. Confirm each add-back — owner compensation, one-off expenses, discretionary spending — against an actual invoice, payroll record or bank statement, and separately build your own estimate of what it will realistically cost to replace whatever unpaid work the owner was doing, whether that is inventory forecasting, listing optimization or customer service, since a recast that ignores a genuine cost the business will incur under new ownership overstates what the buyer is actually acquiring. A buyer who reconciles the recast against source documents line by line, rather than accepting a summary schedule, is far better positioned to negotiate from an informed position if the numbers do not hold up.

Category approvals and account-level restrictions

Confirm directly with Amazon, or through your own test application, which product categories the business sells in are gated and require independent seller approval, since the seller’s existing standing in a restricted category has no bearing on whether you will be approved. Where a category approval is uncertain, build a contingency into the deal — a price adjustment, an extended closing period, or a walk-away right — rather than discovering after closing that a meaningful part of the catalogue cannot be sold under the new owner’s account at all.