I'm in the early stages of selling my Amazon FBA business. The buyer is asking about the bank account linked to the Seller Central account. Do I need to close it before transfer? Can they just take over the existing account, or do they open a new one? I'm worried about tax implications and any lingering liability if my personal account stays attached. Would appreciate hearing from anyone who's been through this.
FBA sale
What happens to your linked bank account during an FBA transfer?
From what I understand, you should not transfer the bank account itself. The buyer will link their own account during the transfer process. Amazon requires the new owner to provid their own banking details. Keeping your account linked could expose you to chargebacks or disputes after the sale.
Following. I'm in a similar situation but haven't listed yet.
When I sold my FBA store last year, my attorney advised me to remove all payment methods before closing. The buyer set up everything fresh. It added a couple of days to the transition but was cleaner. Make sure you get a signed document showing the exact date the account changed hands.
Does Amazon even allow changing the bank account during a transfer? I thought the account itself gets transferred and the new owner just updates the deposit method. But I've also heard horror stories about frozen funds. Would love to know the official policy.
Amazon's policy is that the seller account is tied to the entity, not the individual. But in practice, they often require the new owner to re-verify banking info. The safest route is to have the buyer open a new Seller Central account and do a formal transfer of ownership. That way your bank account never touches their operations.
I've bought two FBA businesses. In both cases, the seller's bank account was removed before closing. The seller had to provide statements showing no pending transactions. One seller left their account linked for a week after closing and ended up with a $3k chargeback from a customer dispute that occurred before the sale. It was a mess. Don't leave it linked.
Tax implications depend on your structure. If it's an asset sale, the bank account is just a conduit. But if you leave it open, you might get a 1099-K in your name for sales that happened after cloisng. That's a headache.
MidwestSage, that chargeback scenario is exactly what worries me. Did the seller have any recourse?
Not really. Amazon held the funds from the seller's account because the dispute was filed after the sale. The buyer refused to cover it since it was technically pre-sale. They ended up splitting it, but it was ugly.
What about recurring subscriptions or loans tied to the accounT? If you have an Amazon Lending loan, that has to be paid off before transfer. And any third-party tools linked to the bank account need to be updated.
So the consensus seems to be remove my account entirely before closing. i'll draft a transition plan that includes a specific date for bank removal. Appreciate the chargeback example—that's a real risk I hadn't considered.