2024.09.11

Hey hey peeps, workin hard here going through deals that have hit the market in the last few weeks.

I decided to do something new and include ‘other listings’…. below the 3 good businesses I commonly send out. These are listing’s I review and decide interesting but not for me, or ‘hard no but good study’. I’ve got 2 of them at the bottom of this email.

🔫 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?

This is tough — between Real Estate Saas and Appliance Repair Ecom. I’d go with the SaaS. It all live in the cloud, product is proprietary and you’ve got stick customers… for only .6x more.

Here’s the deals!

// SaaS for Real Estate Brokerages & Agents | Scalable Marketing Tools


💰 Asking Price: $1,300,000
📊 TTM Revenue: $381,000
💼 TTM Profit: $274,000
📅 Established: 2011

Overview:
This SaaS business focuses on providing scalable marketing tools for real estate brokerages and agents. In business for 12 years, it offers tools like drag-and-drop template builders for marketing materials, automated workflows, and a community platform connecting agents. While the proprietary software and recurring revenue model are strong points, the asking price of 4.6x feels steep given the competitive market and relatively low revenue for this vertical.

Highlights:

  • Niche Market: Tailored for real estate brokerages that aggressively spend on marketing.

  • Recurring Revenue: Some recurring revenue, though it’s not detailed how extensive it is.

  • Manageable Product Line: With only 33 products, the scope is contained and focused.

  • Customer Community: Built-in customer community adds value and engagement.

Questions:

  • ❓ What makes this product worth the 4.6x multiple? Is the recurring revenue model strong enough to support the valuation?

  • ❓ How competitive is the tech? With so much innovation in real estate marketing, is this platform keeping up?

  • ❓ Has the revenue trended positively, and are the customers sticky enough for long-term growth?

// eCommerce Business | Appliance Repair Parts | 28% Net Margins | 4x Multiple

This eCommerce business specializes in pre-owned appliance repair parts with a solid 28% net profit margin and an asking price at a 4x multiple. Appliance parts are generally small and easy to ship, keeping logistics simple. With an $80 average order value and up to 40 shipments daily, it’s performing well. However, 80% of sales come through eBay, which raises questions about the long-term sustainability if competitors enter the space. Still, as DIY repairs grow in popularity, fueled by accessible YouTube tutorials and rising home service costs, this business is well-positioned in a booming niche.

Highlights:

  • High Margins: 28% net margins are impressive for an eCommerce business.

  • Easy Shipping: Appliance parts are small and lightweight, reducing shipping headaches.

  • DIY Growth: The DIY trend is expected to continue growing, driving more demand for repair parts.

  • Multi-Channel Sales: 80% of sales are from eBay, with the rest through the website and Amazon.

Questions:

  • ❓ What are the return rates? Installation-related damages might lead to higher returns. Are these returns factored into the profit?

  • ❓ How vulnerable is the business to competition on eBay, where someone else could resell the same parts?

  • ❓ How dependent is the business on eBay, and are there strategies to diversify sales channels?

/ / Automotive Products eCommerce Brand | 50% Margins | 3.6x Multiple

This eCommerce business stands out with 50% profit margins, driven by digital product offerings such as dealer-level software installation services. The business operates with a direct shipping model, eliminating the need for inventory and keeping overhead low. However, the listing is light on details, so I’m unsure exactly what they’re selling.

It has seen solid growth since 2021, catering to both car enthusiasts and automotive professionals. The platform uses WooCommerce and Stripe, providing a streamlined, user-friendly shopping experience.

Highlights:

  • High Margins: 50% profit margins, rare for an eCommerce business.

  • No Inventory: Direct shipping model helps simplify operations.

  • Digital Product Offering: Dealer-level software services add a valuable digital revenue stream.

  • Growth Opportunities: Expanding into new markets like the Middle East and broadening the product catalog could drive further growth.

Questions:

  • ❓ What exactly are the digital product offerings? The listing lacks clarity here.

  • ❓ How sustainable are the high margins, and what’s the competition like in this niche?

  • ❓ Is the direct shipping process reliable, and how do they handle customer retention with no inventory?

/// Ahhh Nope!

In the course of reviewing business listings, I run across many that seem good but are ultimately killed by one small deal. I figured I’d include them here. with a quick note.

Government RFP Writing Service. Seems like owner is doing everything.

Freight Dispatch Automation Saas. Has 4 founders working in the business. Doesn’t seem like salary has been factored into the expenses (profit is too close to revenue to support 4 full time founders).

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