2024.11.15 - Online Biz Acquisition Opps

What's the catch with this protective footwear brand at 1.5x?

Happy Friday evening peeps.

This week I have been brushing up on the study of Google Schema for SEO ā€” particularly the ā€˜CourseInfoā€™ schema as that is highly applicable to my Accounting CPE business. My initial insight is that most competitors are not using this and the handful of major competitions that are (like Udemy) have done a poor job at implementation as they have 1000s of courses to work with. Iā€™m personally making sure the courses for my business have the schema implemented to perfection.

As we wait for the Tyson v Jake Paul fight here are 3 deals.

// Eco-Friendly Baby Apparel Brand with Strong Margins | 3.1x Multiple

// Chrome Plugin for Tailwind CSS Developers | 3.3x Profit Multiple

// Protective Footwear eCommerce Business | 1.5x Multiple

šŸ”« Gun to my head question:

If I had to write a check for one of the businesses in this email, with no other details which one would it be?

Well Iā€™m not a fan of distressed businesses, which is implied with the 1.5x multiple of the Protective Footwear brand so thatā€™s out. The Ecom baby business seems like a great business for ecommerce; 3pl +25% margin, but it is ā€˜babyā€™ and Iā€™m not a baby kind of guy. The chrome plugin for a Tailwind Developer has utility value, and itā€™s a digital product. At a 3.3x multiple (probably closer to 4x if you adjust for outsourcing support/development) its a good one but itā€™s small, in a market that Iā€™m not sure is huge. Considering that, Iā€™d go for the baby apparel! That business has some size and substance to it.

// Eco-Friendly Baby Apparel Brand with Strong Margins | 3.1x Multiple

šŸ’° Asking Price: $1,150,000 + Inventory
šŸ“Š Gross Revenue: $1,124,695
šŸ’¼ Net Profit: $376,304
šŸ“… Established: 2019

My Quick Take:

This eco-friendly baby apparel brand, established 5 years ago, generates over $1.1 million in revenue with a solid 25% profit marginā€”strong performance for an eCommerce business, especially given the lightweight, easy-to-ship nature of its products. The brand operates on a 3PL model, which supports scalability, though itā€™s important to confirm the 3PLā€™s location to ensure cost-effective distribution within Singapore, its primary market. I do wonder if this business could be brough to other markets, or if it already is? With high customer retention, a lean operational model, and low internal overhead, this business seems positioned for growth. For a new owner, expansion into international markets or adding new product lines could be strategic next steps.

// Chrome Plugin for Tailwind CSS Developers | 3.3x Profit Multiple

šŸ’° Asking Price: $195,000
šŸ“Š TTM Revenue: $62,000
šŸ’¼ TTM Profit: $60,000
šŸ“… Established: Nov 2022

My Quick Take:

This Chrome browser plugin, tailored for Tailwind CSS developers, offers strong utility and has the potential to be highly ā€œstickyā€ due to its niche functionality. With a lean 95.5% profit margin and primarily one-time license revenue, it has seen limited growth despite an established SEO presence. The seller currently handles development, so a buyer should budget for ongoing tech support and development resources, likely around $500-$1,000/month using offshore talent. Expanding the marketing strategy, boosting conversion rates, and exploring additional ad channels could unlock growth and elevate this tool within the developer community ā€” especially with the high margins that can sustain advertising costs.

// Protective Footwear eCommerce Business | 1.5x Multiple

šŸ’° Asking Price: $689,000
šŸ“Š Gross Revenue: $3,566,973
šŸ’¼ Cash Flow: $466,998
šŸ“… Established: 2019

My Quick Take:

This business is in the functional apparel space, specializing in protective footwear for industries like construction, manufacturing, and healthcare. Unlike fashion-focused apparel brands, this one serves a steady market demand, making it less susceptible to trends. It operates on a semi-absentee model with a team handling daily operations, but itā€™s worth investigating why the multiple is relatively low. Margins arenā€™t as high as typical eCommerce deals, but the business is priced attractively and has seller financing options available. Important questions include the proprietary nature of the productsā€”whether they are original designs or simply branded itemsā€”and any potential weaknesses in the business model that could explain the valuation.

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