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Amazon FBA Due Diligence Checklist

A complete 8-area due diligence framework for evaluating an Amazon FBA business before acquisition. Use this checklist alongside the eCommerce due diligence checklist and the general website due diligence guide. FBA acquisitions require deeper verification than standard eCommerce or content site deals because the most critical assets: the Seller Central account, Brand Registry enrollment, supplier relationships, and organic keyword rankings: are all platform-dependent and require direct Seller Central access to verify.

1.Account health and policy risk verification

  • Request Seller Central read-only access: this grants visibility into account health history, ASIN performance, advertising spend, and inventory reports without any modification risk; a seller refusing read-only access is a major red flag
  • Pull the full 24-month Account Health Rating (AHR) history: document every period where AHR dropped below 200 (Green zone), any entry into the At Risk zone (100-199), and any policy warning notifications on record
  • Review each policy warning notification in the account history: the seller must provide a specific corrective action document for each warning; any unresolved warning is a potential suspension trigger
  • Check the Voice of the Customer page in Seller Central: identify any ASINs with poor customer experience ratings (High or Very High NCX) that could generate future account health issues
  • Verify no active account restrictions are in place: check Selling Privileges status in Seller Central and confirm the account has full access to all categories it currently sells in
  • Check for any intellectual property complaints (IP infringement notices) filed against the account via the Received Intellectual Property Complaints section: each unresolved IP complaint is a listing removal and account risk
  • Confirm the account has never been suspended: request written seller representation in the APA that the account has no undisclosed suspension history; verify against AHR history data
  • Review the seller feedback rating (percentage positive over trailing 12 months): a feedback score below 90% positive or fewer than 20 feedbacks for a business with 12+ months of history warrants investigation

2.Financial due diligence: SDE calculation and revenue verification

  • Request 24 months of Seller Central payment disbursement reports: verify that actual Amazon disbursements match the seller's stated revenue figures; cross-reference against bank statements for the same period
  • Verify the SDE calculation: Amazon revenue minus COGS (inventory at landed cost), minus Amazon FBA fees (fulfillment, storage, referral fees), minus advertising spend, minus all operating costs (VAs, tools, software, shipping supplies, prep center fees), add back owner salary if applicable
  • Request the 24-month monthly SDE breakdown: identify seasonal revenue patterns, any MRR spikes in the 3 months before listing (a common pre-sale revenue inflation tactic), and overall trend
  • Verify that inventory cost used in the SDE calculation is at landed cost (factory price plus freight, customs duties, and Amazon inbound shipping): not just factory price
  • Confirm the total inventory value at cost that will transfer with the business: request the current Inventory Report from Seller Central and have the seller provide a cost-per-unit breakdown by ASIN
  • Identify any FBA long-term storage fees in the trailing 12 months: request the Monthly Storage Fees report and calculate what percentage of annual SDE these represent; fees above 3-5% of annual SDE flag inventory management issues
  • Verify that advertising spend claimed in the SDE calculation matches the Advertising Reports in Seller Central: compare the 24-month ad spend history against the P&L ad spend line
  • Check for any pending tax liabilities or sales tax nexus obligations across states where the business has fulfilled inventory: FBA inventory stored in Amazon fulfillment centers creates nexus in those states

3.Advertising due diligence: TACoS, ACOS, and campaign analysis

  • Request the 24-month advertising data export from the seller's Advertising Reports in Seller Central: verify total ad spend, total ad-attributed sales, and calculate TACoS (total ad spend / total revenue including organic) for each month
  • A TACoS of 8-15% is healthy for a mature FBA business; TACoS above 20-25% indicates high paid traffic dependency and weak organic rankings; verify whether the TACoS trend is improving, stable, or worsening
  • Review ACOS by ASIN for the top 5 revenue ASINs: ACOS above 35% for a top revenue ASIN means the business may be unprofitable on that ASIN after advertising and FBA fees; request a per-ASIN profitability breakdown
  • Verify organic keyword rankings for the top ASINs using Helium 10 or Jungle Scout: cross-reference organic rank history against the revenue trend to confirm that organic rankings are driving consistent revenue, not just ad spend
  • Review the campaign architecture in Seller Central Advertising: well-structured campaigns (separate Exact Match, Phrase Match, and Auto campaigns per ASIN, with harvested keywords promoted to manual campaigns) indicate professional management versus ad accounts with a single Auto campaign per ASIN (a risk indicator)
  • Check for any advertising campaigns targeting competitor ASINs (Product Targeting ads): assess whether this is a meaningful revenue driver or an experimental spend line
  • Request the seller's documented target ACOS for each primary ASIN: if the seller cannot articulate the target ACOS, this signals that ad spend is not being managed systematically and optimization may require significant post-acquisition investment

4.ASIN catalog and concentration risk

  • Request the full ASIN revenue breakdown for the trailing 12 months: calculate what percentage of total revenue and SDE comes from the top 1, top 3, and top 5 ASINs
  • Red flag: any single ASIN generating above 40% of monthly SDE creates dangerous concentration risk; if that ASIN faces a suppression event, policy change, or new competitor entry, business revenue could drop 40%+ immediately
  • Review the BSR (Best Seller Rank) history for the top 3 ASINs over 24 months: a consistently strong BSR with low volatility indicates stable organic demand; a BSR that is deteriorating or highly volatile signals demand instability
  • Request the 12-month suppression history for all ASINs in the catalog: multiple suppression incidents on the same ASIN indicate a recurring compliance problem that may not be resolved at closing
  • Verify Buy Box ownership percentage for the top 5 revenue ASINs over the trailing 12 months: consistent Buy Box ownership indicates competitive defensibility; periods of Buy Box loss require explanation
  • Check for any ASINs that are currently in a restricted or gated category: confirm the seller's approval status and whether approval is tied to the seller entity (transferable via entity acquisition) or requires re-application under the buyer
  • Identify any ASINs in regulated categories (children's products, food supplements, electronics with certifications): verify that all required compliance documentation (CPSC certificates, third-party lab test reports, safety certifications) is current and transferable
  • Review the new product pipeline: if the business has only 1-3 ASINs with no validated new ASIN research methodology, assess the growth ceiling and the risk of organic rank erosion without new catalog additions

5.Inventory due diligence and supplier verification

  • Request the current Stranded Inventory report from Seller Central: identify the total value of stranded units at cost, the days each lot has been stranded, and whether the underlying listing issue is correctable before close
  • Request the Inventory Age report: identify how much inventory has been in fulfillment centers for more than 181 days (facing long-term storage fee surcharges) and more than 365 days (facing higher surcharges); factor unresolvable long-term inventory into the APA price adjustment
  • Review the IPI (Inventory Performance Index) score and 12-month trend: a score below 400 creates restock capacity risk and indicates underlying inventory management problems; verify current storage capacity limits imposed by Amazon
  • Verify inventory reorder frequency and current reorder pipeline: confirm when the next purchase order was placed, estimated arrival date, and total units on order; a business with no inventory in the reorder pipeline at close faces potential stockout risk within 60-90 days
  • Contact the primary supplier for each ASIN directly before close: verify: current pricing per unit, MOQ, lead times, willingness to work with a new owner, and whether there are any pending price increases or supply constraints
  • Request copies of all supplier agreements: written pricing terms, exclusivity agreements, quality control criteria, packaging specifications, and minimum order requirements; if agreements are informal or verbal, have them documented in writing before close
  • Verify that supplier relationships can survive without the seller's personal involvement: suppliers that communicate exclusively through the seller's personal WeChat, WhatsApp, or phone contacts (with no written agreements) represent key-person risk at the supply chain level
  • Assess any backup supplier options for each primary ASIN: a business with a single supplier and no backup source for its top revenue ASINs is exposed to supply chain disruption risk that could take 4-12 weeks to resolve

6.Brand Registry and intellectual property

  • Request the trademark registration certificate for each trademark enrolled in Amazon Brand Registry: verify it is registered (not just pending), in the appropriate international class for the products being sold, and in the seller's name (or the entity being acquired)
  • Confirm there are no pending USPTO or international IP office actions against the trademark: check the USPTO TSDR database for any office actions, oppositions, or cancellation proceedings
  • Verify Brand Registry enrollment status in Seller Central: confirm that enrollment is active, that A+ Content is accessible for all enrolled ASINs, and that Brand Analytics data is available for the trailing 12 months
  • Identify all brand assets included in the sale: logos, trademark certificates, A+ Content modules, Brand Store templates, lifestyle images, and registered design files; confirm these are included in the APA asset schedule
  • Confirm the trademark assignment process and timeline: for entity acquisitions, Brand Registry follows the entity; for asset acquisitions, the trademark must be transferred at the USPTO first (typically 4-8 weeks), then Brand Registry re-enrolled under the buyer
  • Check for any active IP complaints filed by the business against third-party sellers for hijacking: confirm the brand enforcement process and any ongoing disputes that will transfer with the business
  • Verify that no unregistered trademarks are being relied upon for Brand Registry enrollment: Amazon has in the past revoked Brand Registry for sellers whose trademark was rejected post-enrollment; confirm the trademark is fully registered

7.Listing quality and organic ranking stability

  • Review the listing content for each top ASIN: title keyword structure, bullet point quality, product description, back-end search terms, and compliance with Amazon's current content guidelines; poor listing content creates a maintenance burden and suppression risk for the buyer
  • Verify main image compliance with Amazon's requirements: pure white background, product fills at least 85% of the frame, no promotional text; non-compliant images can trigger suppression at any time
  • Request the 24-month keyword ranking history for the top 5 keywords driving revenue to each top ASIN using Helium 10 or Jungle Scout: verify that rankings have been stable or improving; a ranking that peaked 3-6 months before listing may indicate a trend reversal
  • Check for any listing content that could be flagged as a policy violation: health claims on supplement ASINs, restricted keywords, or content that violates Amazon's prohibited seller practices policy
  • Review the review count and star rating history for each top ASIN: a star rating below 4.0 on a top revenue ASIN creates conversion rate risk; a recent negative review spike (last 60-90 days) may indicate a product quality problem
  • Assess the review acquisition process: confirm it complies with Amazon's request a review button or an automated review request tool (Jungle Scout, Helium 10 Follow-Up); any evidence of review manipulation is grounds for immediate deal exit

8.Transfer planning and handover checklist

  • Confirm the acquisition structure: entity acquisition (buyer purchases the LLC owning the Seller Central account) or asset transfer (new Seller Central account plus trademark and Brand Registry transfer); entity acquisition is preferred for established businesses to preserve account history
  • For entity acquisitions: confirm the entity has no liabilities beyond the operating business (no loans, unpaid taxes, outstanding judgments); request an entity-level search from a business attorney in the state of incorporation
  • For asset transfers: confirm the buyer has opened a new Seller Central account in advance and that Amazon has approved the account; new Seller Central accounts go through an initial verification period that can take 1-4 weeks
  • Confirm the FBA exit SOP package will be delivered before close: video walkthroughs of Seller Central operations, supplier contact handover, Brand Registry assets, advertising campaign documentation, and reimbursement claim methodology
  • Negotiate a 60-90 day transition support period: define the seller's weekly hours (5-10 hours in month one, 2-4 hours in months two and three), communication channel, and the scope of support (answering questions vs. active operational involvement)
  • Verify that all third-party tool accounts used to manage the business can be transferred or have new account alternatives: Helium 10, Jungle Scout, Feedvisor, RepriceIt, Jungle Scout Alerts; request login credentials or account transfer for each
  • Use Escrow.com and structure the escrow release to occur only after: (1) full Seller Central access credentials are confirmed working under the buyer's account; (2) the trademark assignment filing is initiated; (3) all inventory has been counted and verified against the APA schedule
  • File all open FBA reimbursement claims for pre-close inventory periods before the closing date: confirm the methodology for identifying and filing claims is included in the handover documentation so the buyer can continue this practice

Amazon FBA due diligence benchmarks

Account Health Rating

Good: 200+ (Green zone), stable or improving

Caution: 150-199 (Green, declining trend)

Red flag: Below 150 or any unresolved warning

TACoS (Total Advertising Cost of Sale)

Good: 8-15%, stable or declining

Caution: 16-25%, stable

Red flag: Above 25% or rising trend

Single ASIN revenue concentration

Good: Top ASIN under 30% of SDE

Caution: Top ASIN 30-40% of SDE

Red flag: Top ASIN above 40% of SDE

IPI Score

Good: 500 or above

Caution: 400-499

Red flag: Below 400 (restock restrictions)

Stranded inventory

Good: Under 1% of inventory cost

Caution: 1-3% of inventory cost

Red flag: Above 3% of inventory cost

Gross margin after FBA fees

Good: Above 35%

Caution: 25-35%

Red flag: Below 25%

Account Health Rating is the defining FBA disclosure

Every other metric in FBA due diligence can be negotiated or adjusted in the price. Account Health Rating cannot. An Amazon account with an AHR below 100 can be suspended within days: making a revenue-generating business temporarily worth zero. Always request the full 24-month AHR history from Seller Central read-only access before spending time on any other area of due diligence. If the seller cannot or will not grant this access, the acquisition cannot proceed on verifiable terms.

Frequently asked questions

What is the single most important thing to verify in Amazon FBA due diligence?
Account Health Rating history is the most important area to verify because it determines whether the Amazon account can continue operating. An FBA business with a declining AHR is an existential risk: Amazon can suspend an account with an AHR below 100, reducing revenue to zero without warning. Request Seller Central read-only access and pull the complete 24-month AHR history. Look for: any period in the At Risk zone (100-199), any policy warnings or notifications on record, and whether any open policy violations are currently unresolved. The combination of an AHR in decline plus high single-ASIN revenue concentration (above 40% from one ASIN) is the highest-risk profile in FBA acquisitions and should trigger either a significant price negotiation or a decision to walk away.
Do I need FBA or Amazon experience to do this due diligence?
No, but you need access to someone with Amazon Seller Central familiarity for the advertising and listing quality areas. The financial verification, account health review, and inventory analysis can be completed by any buyer who follows this checklist systematically using Seller Central's built-in reports. The areas that benefit most from an experienced FBA operator: reviewing the advertising campaign architecture (Sponsored Products, Sponsored Brands, campaign structure), interpreting keyword ranking history using Helium 10 or Jungle Scout, and evaluating listing content quality against Amazon's current guidelines. For acquisitions above $75,000, consider paying an experienced FBA operator or FBA-specialized advisor $500-$1,500 for a 2-3 hour Seller Central review: this typically surfaces risks that a first-time FBA buyer would miss.
How do I verify an FBA seller's revenue claims?
Verify FBA revenue through three independent data sources: (1) Amazon Seller Central payment disbursement reports: export the full 24-month payment history and sum all disbursements by month; this is the most reliable source because it reflects actual funds transferred to the seller's bank account; (2) bank statements for the same 24-month period: verify that disbursements appear as deposits in the bank account matching the Seller Central payment history; discrepancies of more than 5% require explanation; (3) Seller Central Business Reports (Sales Dashboard): cross-reference total ordered product sales by month against the disbursement history, accounting for the typical 2-week disbursement lag. A seller who only provides screenshots or a spreadsheet without granting Seller Central read-only access has not provided verifiable revenue data: treat it as unverified until you have direct access.
What are the biggest FBA due diligence red flags that should cause me to walk away?
Walk away if you find: (1) policy warnings on the account health page that the seller cannot explain with a specific corrective action document: unresolved warnings can escalate to suspension without further notice; (2) stranded inventory above 5% of total inventory cost with listings the seller cannot or will not fix before close; (3) TACoS above 25% with no downward trend over 24 months: the business may not be able to maintain revenue without continuous ad spend, meaning it has no durable organic keyword moat; (4) a primary supplier who refuses to communicate directly with the buyer or confirm pricing terms in writing: the cost of goods is unverifiable and the supply chain may not be reproducible; (5) an entity acquisition where the entity has any liabilities beyond the operating business (loans, tax arrears, active disputes) that the seller cannot resolve or indemnify against before close. Any single confirmed red flag justifies a significant price reduction: multiple red flags together are grounds for a clean exit.

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