2024.11.29 - Online Biz Acquisition Opps

Hey hey peeps and happy Black Friday.

I decided to do something different this week and circle back to deals I originally discovered 2-4 months ago and see what was still available for sale. Businesses still listed for sale may provide some room for negotiation with a seller that has softend up a bit.

Most of the businesses had been sold (or pending) as I would expect considering my focus on quality businesses and fair valuations, however a few remain which I’ve got below along with my quick take on why the business hasn’t been scooped up. Some have glaring issues, while others look good.

I also wanted to remind everyone to check for annual subscription deals for Saas that you already use! I have a handful that I renew on Black Friday. 2 of them are

FastComet has powerful 4gb 4core shared hosting at $3.74/m. (comparable performance vps is $150/m)

WP Rocket, 40% off. WP rocket is pretty much a necessity for operating wp sites these days.

🔫 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?

I’d go with the ‘Platform Streamlining Digital Music Software Distribution - 166k SDE - 3.92x’. The fundamentals are sound and my gut tells me that the niche of the business is something that buyers just don’t understand so they skim over.

Let’s get into them!

// Digital Product Subscription Business - 223k SDE - 2.82x.

Originally discovered: 2024.07.24

No glaring reasons why this one is still listed. Nice margins. 12 years in business. Good multiple. One possible reason could be dependency on SEO traffic but the listing gives details on an affiliate network (which drives traffic and sales). Maybe the products are just shitty and easy to duplicate 🤷‍♂️ still the affiliate network is a strong sign.

View Listing

// Platform Streamlining Digital Music Software Distribution - 166k SDE - 3.92x

Originally discovered: 2024.08.25

All seems good. Perhaps what the fact that what business does is not easily understood causes problems? Just reading the teaser I don’t have a precise idea on what it does — and I believe most buyers gravitate towards things they at least know or can associate with an existing business they’re familiar with.

View Listing

// Industrial Equipment Dropship 144k SDE - 2.74x

Originally discovered: 2024.08.25

Nice margins for a dropship business, 16 years in business, and 50 suppliers. All seems good unless… the seller is really ingrained in the industry and holds the customer / supplier relationships along with knowledge. This is kind of implied with the sentence “Most of their sales are through email and their website will give any client a great look at all their products”. Also to note is it is not listed by a common ‘online business brokerage’ which may not get it in front of the optimal audience of buyers.

View Listing

// eCommerce Brand in Health, Medical & Wellness - 503k SDE - 4.57x

Originally posted: 2024.09.10

In the original post, I called this one ‘over priced’. The 4.57x multiple isn’t bad for a good ecommerce business, but here’s the thing; the margin is a measley 5.6%. No one is spending 2.3mm to operate that close to negative.

View Listing

// Automotive Products Ecom - $277,150 - 3.6x

Originally posted: 2024.09.11

Well margins are higher than 50% here! The business was only established in 2022 which makes it 2 years old at best. Possibly that is the achilles heal. It has some kind of digital product which is interesting. Despite being young, I kind of like this one.

View Listing

// Marketing SaaS for Real Estate Agents - 274k SDE - 4.74x

Originally posted: 2024.09.11

This business was established in 2011, so my guess is that the SaaS tech is a little dated and faces superior competition absent substantial overhaul. It doesn’t make the business worthless but also not 4.74x. Maybe 3.5 -4x… yet the seller is holding out.

View Listing

// Virtual Post Office - 471k SDE - 6.4x Multiple

Originally Posted 2024.10.08

The valuation is just too high. Likely a seller that was just like F IT, let’s list it high and see what happens. Since my original post, I did look into the technicalities of starting up a competitor and it is surprisingly not that difficult to do through the USPS API.

View Listing

// ESG Compliance SaaS - 74k SDE - 3.5x Multiple

2024.10.13

This one is interesting. The multiple is fair. Only things I could think of are A. the tech itself is gimmicky, like a file storage system that is nothing more than something like a dropbox. B. it requires outbound business development. It is also too small to be a full time income for most and too small for financing so maybe that hurts its appeal a bit.

View Listing

// User Experience Testing SaaS - 192k SDE - 4.2x Multiple

Originally discovered: 2024.10.14

This could suffer from being dated tech like the real estate SaaS but mentions of ChatGPT integration indicate that it is being updated. Also UX testing is a competitive market (lots of companies), but it is big. Also to note, the brokerage platform ‘Acquire.com’ does charge buyers an annual membership fee to request details on the listing which may hinder the exposure. I’m not a member of acquire.com and that’s probably the only reason why I haven’t gotten the CIM.

// Unbreakable Kids Eyewear Brand - 771k SDE - 4.2x Multiple

Originally discovered: 2024.10.17

I liked this business a lot. I still do. But it does have a physical warehouse and optical lab which takes many of the ‘online only’ business buyers out of the market.

View Listing

// Ebook Subscription Membership Program - 396k SDE - 3.8x

Originally discovered: 2024.10.17

The numbers look healthy here but my take is that this is more so a short term money grab with low quality products. No secret eBooks have a low (no) barriers to entry, and this business is churning out 50 of the a month which implies to me they’re low quality. They’re also in the ‘self help’ category. It wouldn’t be that hard to churn out 50 ebooks a month. Selling them to the tune of 1mm annually is impressive. Still I don’t want to be in the business of selling self help crap and I’d guess most others with $1.5mm don’t either. Not to mention, at what point do you run out of self help content with 50 ebooks / month.

View Listing