If you died tomorrow, what would happen to your Amazon FBA business?
Here’s what would happen to mine:
- Inventory will continue to sell as normal for a few weeks.
- Sales will start slowing down and then eventually stop because there’s no more inventory left or the inventory is no longer competitively priced.
- Monthly subscription fees will eat up the money in my business checking account.
- The credit card company will start calling for their missed payments.
- The states where I collect sales tax from will start sending nasty letters inquiring about their missed filings and payments.
Not a good situation is it?
Now take a few minutes and think about what would happen if you passed away.
Help Your Family Out While You Still Can
I have always assumed that my husband will pass away first. But that’s not guaranteed. If I left him right now, he won’t know what to do with my business. That’s a shame because he’ll be missing out on the money in the bank and the money that’s sitting as unsold inventory.
Since he has never helped with the daily running of the business, he will have a hard time with either continuing it or closing it down.
Heck, it’ll even be a challenge for him to start learning about my business because he doesn’t even know the password to get into my computer.
So one of my “tasks” is to make it easier on him if I died first. Here are the general steps that I’m working on and I recommend that you do something similar if your family will be just as lost.
Have a Pre-Planning Meeting: Meet with your family and business partners and find what they want to do with the business. Come up with a plan so that everyone involved knows what their responsibilities are and what to expect.
Create a Master Account List: This will make it a lot easier on your survivors if they know what accounts that you have and what needs to be done. Your list should include Amazon Seller Central, all financial accounts, subscription services, state sales tax accounts and all other accounts that you use to run your business.
For each account, include the account number, login and password, company contact information, what the account is for and the amount and date of your next payment due.
You don’t need to give this list to anyone right now. But just make sure that someone knows where it is.
Train or Hire a Trusted Person to Do the Tasks: If you run the business solo and there isn’t anyone trained to continue or close down your business, then it’s going to be very difficult for your family!
Can you imagine trying to figure out Amazon Seller Central while you’re in shock and grieving?
My friend Jane (not her real name) also sells on Amazon and we are in similar situations. We both run our Amazon businesses on our own and if something happens to one of us, our husbands wouldn’t know what to do. So if I die, she will help my husband and I will do the same for her husband.
Put Your Plan in Writing and Make it Legal: I truly recommend creating a legal document to prevent any bad things from happening later on. You sure don’t want some greedy person running to the bank with your death certificate and taking all of the money that was supposed to be divided up equally among your survivors.
I hate to say it, but some people get greedy and do stupid things when a family member dies. I’ve seen it happen.
I imagine that I’ll write Calvin a letter that has all of the info that he needs. Since he’s not interested in running the business, the letter will probably go something like this:
I’m gone but my Amazon FBA Business is still alive! It will keep making money for a short-time as there’s inventory in there that will sell today, tomorrow, next week and next month. But you need to close down my business because eventually the inventory will quit selling and fees will eat up the money in my business checking account.
There are several companies that I opened accounts with to help me with the business. If you go to our safety deposit box, you’ll find two copies of a Master Account List. This has the contact info, logins and passwords for every account that I have.
Keep the copy that includes the banking information for yourself and give the other one to my friend Jane. You can trust her to help you with closing down my business.
Business Checking and Savings Accounts
There’s enough money in the business savings account for you to pay off all of the remaining bills. After you do that, treat yourself to a new fishing boat! But before you run to the bank and cash it out, here are a few things that you need to know:
- Amazon deposits my sales income into the checking account every other Wednesday. Therefore, keep the account open until the final deposit is made.
- There are several companies that are on auto-pay. You need to cancel them immediately so that you’re not paying for services that aren’t being used. I’ll go over those accounts later in this letter.
- You are listed as my POD (Paid on Death) beneficiary at the bank. When it’s time to close the account, you just need to present them with a certified copy of my death certificate.
- Here’s my banking info: Bank name, address, phone number, account numbers, login and passwords for online banking.
Sell Our Inventory!
Remember all of those shoes and other items that you’ve seen me buy? Well, I sent those products to Amazon to be sold. There are thousands of dollars of inventory sitting there and your goal is to get everything out of Amazon within the next 60 days.
Jane will help you with lowering the prices because we want to sell the remaining inventory quickly. The more that you sell, the more money that you’ll get back.
Go grab my cell phone right now and click on the Amazon Seller App. You’ll be automatically logged in and then you can watch the sales numbers come in! You’ll soon see how exciting it is to watch your next sales deposit grow!
Every 2 weeks, I want you and Jane to go over the remaining inventory. You two can decide if it’ll be better to have a “fire” sale or to have the inventory returned to you or disposed of. Also make sure to offer Jane some of our unsold inventory for her help. She can have Amazon send the inventory to her for 50 cents each.
Remember, our goal is to remove the inventory quickly. The longer it sits, the more that you’ll pay Amazon in storage fees.
Cancel 3rd Party Subscriptions
Our checking account balance will continue to grow as long as there are sales. But at the same time, it’ll get smaller if companies continue paying themselves for services that you won’t be using.
Below is a list of all of the services that I want you to cancel this week. You’ll find the account information for each one in the Master Account List.
Bookkeeping Subscriptions – Keep Open for Now
I’m going to have you leave the bookkeeping accounts open for now so that Mike (our accountant) can print the reports that he needs to finish up on our bookkeeping and to do the taxes.
The bookkeeping accounts are InventoryLab, TaxJar and Quickbooks Online. They are all paid up through July of next year. If it’s close to July when you’re reading this, have Jane switch my annual memberships to monthly memberships. There’s no reason to pay for another year of subscription fees.
Capital One Credit Card
I pay for most of my inventory with my Capital One Spark Business Card. I do this to get points (you know that I love points!). I’m sure that I owe them money so I need to you to pay off the remaining balance right away so that you’re not charged any interest or late fees.
All you need to do is log in to the Capital One account and make a final payment from my business checking account to the credit card. Before you do this, double check the business checking account to make sure that there’s enough money to make the final payment. If there’s not, then transfer the money from the savings account to the checking account.
Once the payment clears, grab a nice gift certificate with the rewards points and then close down the account.
I collect sales tax in several states. This means that there are outstanding tax returns to be filed and sales tax money that needs to be sent to the states. If this isn’t done by the filing due dates, the states will charge penalties and interest.
It’s best that you handle this right away as one or more tax returns are due every month. If you look at the Master Account List, you’ll see a company called TaxJar. They can file all of our final returns and close down our accounts. Have Jane help you with this as she uses TaxJar too and knows what to do.
There’s enough money in the savings account to pay all of the tax liabilities. Have Jane log into my TaxJar account and give you the total amount. Then you can transfer the money over from the savings account to the checking account. All of the states and TaxJar will be deducting their payments from the checking account.
Jane will also tell Amazon to stop collecting sales tax so that you won’t have to worry about future tax returns.
The one exception is Washington. Since we live in Washington, their tax return is more complex. I want Mike (accountant) to complete our final Washington return. He can work with Jane and TaxJar to get our final Washington sales tax information.
All of the Inventory is Gone! Now What?
Great job! I hope that you made lots of money! Now it’s time to finish up everything so you can buy your new boat!
Here’s what to do:
- Have Jane switch my Amazon account from a Professional plan to an Individual plan so that you can still access our reports without being billed.
- Send Jane the check that I made out to her. It’s in the safety deposit box. She deserves it for helping you out!
- Have Mike finish up our bookkeeping and get the final reports that he needs for our tax return.
- When he’s finished, close down all of our bookkeeping accounts.
- Go through the Master Account List with Jane and make sure that everything is canceled.
- Wait for our final deposit from Amazon and for Jane’s check to clear.
- Go to the bank with my death certificate and close down the checking and savings accounts.
Now I want you to go buy that fishing boat and name it after me!
I love you forever!
That was a hard letter to write.
I do know that if I died before I finished my “real” letter to Calvin, that he’ll be okay. Sure it’ll be hard on him, but he won’t starve or miss any house payments because we don’t rely on my income to pay the household expenses.
But what about you? If your Amazon business supports the household and something happens to you, will your family know what to do? I hope so.