The Business Inquirer #022
In this issue I highlight 10 business listings including a baby products brand, a shared bookmarks SaaS, and a niche job board along with What I Learned Last Week.
Every week I highlight interesting online businesses which are for sale adding my own commentary. This newsletter is for those who are interested in business, finance, and entrepreneurship. Subscribe below to receive it directly in your inbox.
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Hello Friends!
If you’re actively looking to acquire a business, what type of business are you searching for?
In this week’s issue:
🛒 eCommerce - 3 listings
☁ SaaS - 4 listings
🕸 Content - 3 listings
🧐 What I Learned Last Week
🛒 eCommerce
Home Décor - $171k
For sale is an 18-year old portfolio of home décor drop shipping websites. Started in 2002 by a husband and wife who are ready to retire.
4 websites
No inventory. 11 direct suppliers.
AOV of $284 - $306 depending on the website
TTM Revenue: $255k; Profit: $58k; Margin: 23%
Asking: $171k; Multiple: 2.95x;
📝 TBI Commentary
Home décor has seen very strong growth due to COVID. Safe to assume this business has benefited from that. I’d want to understand the financials for a normal year. The margins are low for ecommerce without a lot of room for advertising budget. If you assume a steady run rate, you’re still getting a healthy 34% ROI. Could be a good purchase for steady cash flow or to try and grow the business.
You can view the listing on Quiet Light Brokerage.
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Baby Products - $4.1M
For sale is a 4-year old trademarked brand of baby products which are sold through 11 sales channels. The products include potty-training, pads, toys, blankets, gift sets, and more. The company has been featured in many parenting publications and is well known in the industry.
FBA model
4 employees
Sales channels include Walmart, eBay, Amazon US, Amazon Int’l, Shopify, Wish.com, and more.
99% positive 4.5 - 5 star ratings on Amazon
200% Y/Y profit increase on Amazon; 1,000% Y/Y increase on Walmart
TTM Revenue: $2.9M; Profit: $746k; Margin: 26%
Asking: $4.1M; Multiple: 5.50x
📝 TBI Commentary
The high multiple reflects the quality of the business. I like the diversified revenue stream and not relying on a single sales channel. Baby products has always been a great ecommerce category with a very engaged audience willing to spend money for quality. I’d want to understand the drivers of that strong Y/Y profit increase and how sustainable it is. Some of the growth levers could include listing additional products, increasing marketing channels, and optimizing pricing.
You can view the listing on Website Closers.
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DTC Influencer Products - Open to Offers
For sale is a 2-year old startup which helps influencers, music artists, gamers, and creators to design, manufacture, & sell their own branded products to their fans. The startup has a signed deal with YouTube to integrate with the new YouTube merch shelf product feature. Revenue is generated as a % of transaction fees. Company is based in APAC region.
Raised $202k
Connects 90+ manufacturers to influencers
500+ influencers interested in joining platform/month
TTM Revenue: $75k; Profit: $50k; Margin: 67%
Asking: Open to Offers
📝 TBI Commentary
It sounds to me like this startup is a platform that connects influencers with manufacturers. Really interesting business that’s riding the wave of influencer DTC merch. From the listing it looks like this business needs marketing and sales talent to grow. You apply a 3x-4x multiple and I think $150k - $200k would be the right price. Not sure how the current owners and their investors are thinking about pricing. There’s also conflicting data in the listing in terms of last month revenue and profit numbers. I’m seeing this in a lot of MicroAcquire listings.
You can view the listing on MicroAcquire.
☁ SaaS
Electronic Signature - Open to Offers
For sale is Paperless which is a document automation and electronic signature startup based in Germany.
📝 TBI Commentary
There’s no detail provided in the listing itself except a description of the software. It does appear to be a serious startup with 13 employees. It’s listed on SideProjectors which raises some red flags to me. It’s like if you saw a Banksy for sale at a CVS instead of Sotheby’s - weird. With that - document management is a great space and Paperless appears to have some really interesting features with e-signature, no-code document builder, and more.
You can view the listing on SideProjectors.
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Team Shared Bookmarks - $15k
For sale is 4-year old TeamSync Bookmarks which offers teams an easy way to share and manage website bookmarks. Includes a Chrome extension, mobile app, and an admin web app. Revenue is generated from monthly or yearly subscriptions. Seller is a PM at a large tech company and wants to offload this project.
Growth is all organic
19,637 unique monthly visitors
16k+ weekly users according to Chrome store
Avg monthly revenue: $1,634; Profit: $904; Margin: 55%
Asking: $15k (auction)
📝 TBI Commentary
I like the business idea behind this project. I can see how it’s useful for both startups, large enterprise customers, and everything in between. It’s not a turnkey business as there’s some technical work required to fix some commonly reported issues with the extension. Also needs a solid marketing and sales strategy to take it to the next level. The website receives a good amount of visitors and the product has users. Would be an interesting acquisition for someone who already has a team or a portfolio of extensions sold into similar markets. I’d think this could sell for around $25k - $30k.
You can view the listing on Flippa.
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Real Estate Marketing - $166k
For sale is a 13-year old digital service business selling real estate agents subscriptions to pre-populated marketing content for industry newsletters.
$16k MRR; $1.4k customer LTV
LTM Revenue: $335k; Profit: $57k; Margin: 17%
Asking: $166,000; Multiple: 2.91x
📝 TBI Commentary
I’ve looked into this industry previously and it’s very competitive. I’d want to understand how the content is generated and how the customers are acquired. The margin appears low for a content business so need to dive into that a bit. I assume that this business caters to a certain niche of real estate agents.
You can view the listing on FE Int’l.
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Cybersecurity - $25k
For sale is a 6-month cybersecurity startup which provides an all-in-one services to manage cyber risks. It helps developers, teams, and enterprises protect users, prevent account takeover, and detect account-based threats.
Raised $100k
Competitors: Trava, Havoc Shield
Last month revenue: $1,200; Profit: $306; Margin: 26%
Asking: $25,000; Multiple: 6.81x
📝 TBI Commentary
Would need to conduct a lot of technical due diligence to make sure the software functions as expected for an MVP. This could be interesting for a SaaS marketer.
You can view the listing on MicroAcquire.
🕸 Content
Phone # Lookup - $80k
For sale is 3-year old Phone-Calls which is a website where the content is random USA phone numbers. Revenue is generated from display ads. It’s one of those websites that shows up in Google search results when you try to lookup a phone number.
Database of 300 million phone numbers
Monthly unique visits: 99k; Page views: 138k; Keywords: 68k
Adsense & EZoic display revenue
Monthly revenue: $2.7k; Profit: $2.6k
Asking: $80k; Multiple: 30.77x
📝 TBI Commentary
I’ve always been curious about the economics of this type of “business” and they look pretty good. I don’t know how they update the content (phone number database) or if there are any gray legal areas in this industry. It’d be interesting if someone did a roll-up of all of these types of websites. Not a business I’d want to get into but an insightful listing nonetheless.
You can view the listing on Flippa.
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Job Board & Community - $1.5M
For sale is a 2-year old job board & community which helps women find full-time remote jobs at trusted female-friendly companies. The business generates revenue from subscriptions sold to businesses. The sellers actually started another job board which does the same thing but for people of color. That one is growing faster and they are open to selling both.
Built on WordPress, Mailchimp, Slack
TTM Revenue: $300k; Profit: $228k; Margin: 76%
Last Month Revenue: $36k; Profit: $29k; Margin: 81%
Asking: $1.5M; Multiple: 4.31x
📝 TBI Commentary
Great business which doesn’t require a lot of tech. As diversity becomes more and more important, these types of niche job boards will continue to grow. I think someone with marketing and sales skills would be perfect to expand this business.
You can view the listing on MicroAcquire.
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Wedding Content & Vendor Directory - $29.4k
For sale is a 7-year old wedding focused content website and directory. The business generates revenue from the vendor directory, display ads, and sponsored social media posts.
Writer & VA are in place and will transfer
120k followers on social media platforms; Client list of 2,300 and advertiser list of 650+
Authority Score: 47; Monthly unique visitors: 17k; Page views: 32k
Organic traffic. Mostly Australia, US, UK, CA, DE
Monthly revenue: $1,427; Profit: $1,022; Margin: 72%
Asking: $29,405; Multiple: 28.42x
📝 TBI Commentary
COVID has depressed this business so it’s key to see how a normal operating year looks like. I’d also want to better understand the opportunities to expand the business in the US market. There may be ways to add revenue by selling merch. Without any deep DD, the valuation and metrics look very attractive.
You can view the listing on Flippa.
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Newsletter for Newsletter Publishers - $5k
For sale is a 6-months old community and weekly newsletter which provides resources and tips for newsletter publishers.
Built on Webflow & Active Campaign
300 subscribers; 30-40% open rate;
2 sponsors secured
Revenue last month: $500; Profit: $480; Margin: 96%
Asking: $5,000
📝 TBI Commentary
My feeling is that $5k is a bit over priced for this especially when you consider that Grow Getters, which I highlighted last week is in the same niche, has 2,200+ subs, and is listed for $2k. I’d want to understand the sponsorship timeframe, the CTR, and growth levers. Maybe a good acquisition for someone who wants to get a bit of a head-start in the newsletter space or already running something similar.
You can view the listing on MicroAcquire.
🧐 What I Learned Last Week
MicroAcquire
It’s been incredible watching Andrew Gazdecki start MicroAcquire less than a year ago and grow it to where it is today with 40k registered users, 300+ transactions, 10+ new listings each day, and the business approaching $1M in revenue. The execution of going from idea to revenue has been inspirational for me. I’d highly recommend following Andrew on Twitter. In case you didn’t know, there’s also a great collection of articles and resources on the website for acquirers.
To be fair - I do think there needs to be a better process for vetting the listings and writing the description. I’m sure it’s something that will be addressed soon. I’m starting to see phrases like “I don’t want to sell but I’d do it if the offer is enticing enough” as part of the listing. Not good.
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Opportunity for a listing service
Continuing the train of thought from above, I’m wondering if there’s an opportunity for a new type of service which helps sellers list their business. This is basically what brokers get paid to do. Create a polished listing and make intros to buyers. That’s what earns them the 5-15% commission. Today, marketplaces handle the buyer intro and a new type of service could be built to handle the listing details.
For $200-$600 you would hire someone to author the listing, create a one-page summary PDF, organize the P&L, create a FAQ, and whatever other materials would make for a smooth transaction. The service can adjust the structure and formatting to fit a particular marketplace.
On a eBay, having good photos and description definitely bring in more buyers and adds 5-10% to the item sales price. Of course listing a comforter is different than listing a business but perhaps same levers apply.
Reply to this e-mail and let me know what you think.
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Walmart Marketplace opens the door to foreign sellers
Until recently, Walmart Marketplace has been open only to US companies. Over the past few weeks, the company has expanded to allow foreign sellers. Market Pulse wrote a quick article highlighting this change.
There are risks to opening the doors, too. Walmart’s verification of sellers outside the U.S. is unlikely to be as effective as domestically. That will introduce some of the chaos observed on the Amazon marketplace. And despite establishing itself as the second most important channel and sales more than doubling in 2020, this does little to develop differentiation in the competition with Amazon and others.
Selling on Walmart still requires approval, so the 82,000 sellers figure will not increase quickly. However, 75% of new sellers on Amazon are from China, and many meet the requirements Walmart set for foreign sellers. It is up to Walmart to decide how many of them it will accept - over 20,000 people watched the conference’s live stream.
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Acquisition process from a VC
Bloom Venture Partners has acquired Viostream, an Austrlian-based enterprise video software company. Jay Vasantharajah is a Bloom Partner and wrote a great blog post about the acquisition where he shares his approach to deal sourcing, evaluation, transaction, and post acquisition plan. It’s a great read to gain insights on the whole M&A process.
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Modeling content website portfolio returns
Mushfiq Sarker of The Website Flip recently shared a Google Sheet which includes a content website portfolio financial model.
Have you wondered what are the returns of a portfolio of content website acquisitions across a multi-year horizon? Or, what is the yearly returns if investors are involved?
I am open sourcing my portfolio financial model in Google Sheets. The base model does the financials for 4 website acquisitions totaling $1M with third-party investors. This is useful if you are planning to raise money for your media business.
Whether you’re investing in a fund or thinking of building your own website portfolio, this model will help you think about the P&L and returns. You can view the blog post with the link to download the model.
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What people misunderstand about the creator economy
Rex Woodbury is an investor at Index Ventures and publisher of the Digital Native newsletter. The latest issue talks about things people misunderstand about the creator economy.
I spent the past few days thinking about what people were missing and why the rise of online creators is an important and positive societal shift. I boiled it down to five reasons:
This movement is about creative expression.
It’s a horizontal trend, not a vertical trend.
It enables and empowers more diverse voices and stories.
It lets workers reclaim their agency.
It breaks down outdated power structures.
I think it’s important for entrepreneurs and business owners to stay on top of these trends.
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Buy a drop shipping business
You can buy a fully turnkey dropshipping business. Not just a website, but the full package - website/store, logo, branding, supplier. I came across Dropship For Sale in Benedict Evans newsletter. The example he pointed to is this coffee store. Of course I’ve seen these types of ready-made stores for sale on various marketplaces but I don’t recall any of them actually coming with a supplier. What’s more, Dropship For Sale is a Shopify Partner.
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Nano-influencers are best bang for buck
Footwear News came out with a great article on influencer marketing. The industry is poised to hit $13.8B this year. The best influencers for brands to engage with may not be the household names everyone knows. The article specifically calls out nano-influencers for their high engagement and authenticity. Yes, the article is focused on shoes but the findings are relevant for any industry.
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Most impactful decisions for a startup founder
I found this interview with the founder of Webflow, Vlad Magdalin insightful. Discussion goes into Vlad's journey as a founder, advice for early-stage founders, and lessons learned along the way.
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That’s all for this issue of The Business Inquirer!
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