2025.03.01 - Online Biz Acquisition Opps

Author

Corey Philip
March 01, 2025

Corey’s Quick Take: This seems like an excellent small ecommerce business. It’s aged 30 years but small, indicating to me that there are some easy wins for a fresh mind. The product is simple and operationally easy to manage.

Arts & Crafts eCommerce Brand – $121K SDE – Asking $425K – 3.5x Multiple

Listing Type (?): Solid

A 30-year-old arts and crafts eCommerce brand selling premium wool, cotton, and natural crafting supplies. With a large catalog of 1,000+ SKUs, the business serves both direct-to-consumer (DTC) and B2B customers, including schools, libraries, and craft businesses. Sales are made through the company's website (65%), Amazon (30%), and Etsy (10%). The business operates with no ad spend and maintains strong organic demand.

✅ What I Like

  • Diverse Revenue Streams – Sales from website, Amazon, Etsy, and wholesale.

  • Established Brand – 30 years in business with a loyal customer base.

  • High Margins – SDE of $121K on $375K revenue (~32% margin).

  • No Advertising Costs – Sales are driven by organic demand and repeat customers.

  • B2B Expansion – Growing sales to schools, museums, and crafting businesses.

  • Low Owner Involvement – Current owner works just 25 hours/week.

⚠️ Risks / Challenges / Questions

  • Niche Market – High-end crafting supplies serve a specific audience.

  • ? How is inventory being handled currently? it doesn’t seem like it would be hard to 3PL these products but it would be nice if a buyer didn’t have to sort out inventory.

📈 Ways to Grow

  • Optimize Amazon – The products are already on Amazon. If they are exclusive and copyrighted, there should be limited competition, so getting them in front of the right audience could be lucrative.

  • Leverage Social Media – Utilize Pinterest (40K+ monthly views), Instagram, and influencer partnerships. They’ve got a very ‘social’ product, 30 years of customers, and little traction on these platforms.

  • Expand B2B Sales – More aggressive outreach to schools, libraries, and specialty retailers. Just a few individual sales could be huge. Perhaps there is a way to make the projects part of the education curriculum?

Corey’s Column

You’re going to need 20% down and an SBA Note.

The author of this article on Forbes seems like he is as frustrated as I am with the growing number of ‘individuals’ trying to acquire a business through ‘creative financing’ structures that are perpetuated by ‘guru’s like Codie Sanchez. I experienced it firsthand in the last sale I had (about 5 years ago), and it has only gotten worse since then. No one with an established business and profitable is going to take on the risk of a buyer’s ability to run the operation. Bottom line.

Where these creative financing deals come from.

While they have happened, they usually come up either in very rare circumstances.

A. the business is distressed and when you acquire it you are set to lose money on day 1. i.e an ecommerce business that has been impacted by Amazon’s entry into the market with their AmazonBasics brand (platform risk). When you take it over, at the very least you have to pay the cost holding that inventory. You have an opportunity but also a liability (negative future cash flows).

B. Employee buying the business. The buyer has demonstrated they are capable running the business and a smooth transaction occurs without broker fees.

C. Family or Friend buying the business. For personal resasons non

D. Private Equity / Merger. These deals allow the seller to participate in growth with the new buyer who brings a synergized business and/or growth plan with a track record for success. In reality, most business buyers don’t bring any value to the table. If the buyers did bring value, sellers would generally know who they are already. Some buyers convince (manipulate) sellers to believe they do, but for the most part sellers of business cringe at John Doe who believe they can jump into the business and grow it better.

Get your 20% ready.

Maybe know SBA loans can be work with less, down but you’re going to have legal fees, closing fees, diligence cost. Even if you are getting a little piece of seller financing, I think it is best to be conservative and budget for 20%

That’s a wrap peeps,

—

Corey

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