2024.06.05 - Online Biz Acquisition Opps

Hey hey peeps, today we’ve got 3 solid listings.

As I review your responses to the poll in the last edition about deal size, and my nature of sharing deals, I notice a ‘trend’. The businesses seem to be either be:

a) ‘established and stable’ being that that will exist and thrive without any major changes/effort,

or b) small having achieved a product market fit and be a ‘platform for growth’ which require someone to really guide it to point of stability. These are usually at a lower multiple.

I’m not exactly sure how I am going to factor that into the deals/emails going forward. Possibly doing seperate emails for each, or maybe just noting the deal style below each title.

Today we’ve got some that seem to be on the established and profitable side of things.

As always your feedback and engagement by givign a

7 Year Eco-Friendly Candle Brand Profiting 1.3mm / yr

💰 Asking Price: $4,850,000
💼 Cash Flow: $1,383,705/year
📊 Revenue: $3,961,505/year
📅 Established: 2017

💭 My Take: This business, specializing in eco-friendly, non-toxic candles, has been in operation for 7 years and targets a well-defined demographic of eco-conscious women aged 25-45. With an average order value (AOV) of $70, the products are priced to be an easy sell while providing strong margins and at only 9 SKUs, operations should be ‘easy’. The business operates through multiple sales channels, including their website, Amazon, The Grommet, Faire, and a significant wholesale presence in 195 Whole Foods locations. The product's small size keeps shipping costs low, adding to its profitability.

Several aspects need clarification. Who is currently managing the warehouse operations? The listing states that the business operates remotely, which is a plus, but it’s unclear if the team lead is qualified for hiring and training warehouse staff. Transitioning to a 3PL could streamline operations and potentially reduce costs — it’s rare that you can operate a warehouse cheaper than 3PL. Additionally, the website is unoptimized, presenting a significant growth opportunity through SEO improvements and enhanced digital marketing strategies — we do need to know how unoptimized it is.

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OTC Hearing Aids & Consumable Products Brand

💰 Asking Price: $2,200,000
💼 Cash Flow: $712,167/year
📊 Revenue: $9,038,853/year
📅 Established: 2022

💭 My Take: This stable and well-established business specializes in OTC hearing aids and supporting consumable products. The streamlined fulfillment with a 3PL based in Phoenix, Arizona, is efficient, but I wonder if another supplier could offer better terms. It's nice that they also sell the supporting consumable products, creating a recurring revenue stream.

However, the low margins suggest high ad spend, likely due to a focus on direct response marketing, which may indicate little brand value. The aggressive marketing efforts mentioned in the listing imply that a skilled marketer might find it challenging to add significant value. International expansion is highlighted as a key growth opportunity, but we'd need to know more about the current 3PL setup and the potential challenges of converting the website and marketing materials to other languages. The 3x multiple seems to factor in these considerations, making it a potentially low-risk acquisition with opportunities for optimization and growth.

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10k/m Recurring Revenue Podcast Membership Business

💰 Asking Price: $380,000
💼 Cash Flow: $114,936/year
📊 Revenue: $133,676/year
📅 Established: 2020

💭 My Take: This business has a well-established audience and generates recurring revenue by facilitating connections between podcast hosts and guests. Selling to an audience can be challenging, but this business has proven its capability with a solid membership base of 650 active paying members and a monthly recurring revenue (MRR) of $9,700. The owner, who has no experience in marketing, has been the limiting growth factor and is looking to spend more time with their children. This situation indicates significant untapped growth potential for a savvy entrepreneur.

With no paid marketing or a solid marketing plan in place, and with limited focus on affiliate partnerships, there is ample room for growth. High-margin auxiliary services such as podcast editing/production, podcast hosting, or affiliate programs for these services could be added to increase revenue. The business benefits from a large email list (20K subscribers) and an active Facebook group (62K members), which are valuable assets for marketing. This business offers a solid foundation with plenty of room for growth, making it an attractive acquisition for someone experienced in marketing and looking to capitalize on its established presence.

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