The Business Inquirer #116
The Business Inquirer #116
In this week's issue, I share 6 listings including a Pickleball e-commerce brand, a resume writing service, and more.
Hello Friends!
In this week’s issue:
🛒 eCommerce - 1 listing
💼 Online Service, Media, Marketplace - 1 listing
🕸️ Twitter - 4 listings
⚒️ Tools & Resources
This issue of the newsletter is brought to you by Scott Oldford.
Want to see behind the scenes of building, scaling, buying, and selling online businesses?
Scott Oldford has helped over 200 Entrepreneurs scale 7+ figure businesses and is one of the top business advisors and mentors.
Scott just launched a newsletter dedicated to sharing his journey in managing his portfolio of online businesses.
It’s FREE to sign-up and you can join here.
🛒 eCommerce
Pickleball Brand (AppBusinessBrokers) - $300k
Sells paddles, balls, apparel, and bags
70% of sales come from Amazon
Revenue: $206k
Profit: $87k
Margin: 42%
Multiple: 3.45x
✅ What I Like
Small business in a very fast-growing niche. Products are sold through multiple channels including Amazon, eBay, Etsy, and DTC. Retail and wholesale clients. Nice margins. A lot of opportunities for growth.
❓ Questions & Concerns
Building/buying a business in a brand-new niche is risky. Sports like Pickleball and Paddle are fast-growing but the trend could easily reverse. A lot of new competitors rapidly enter the market. Tough to differentiate your products.
Valuation does seem elevated for this type of business.
Here are a few questions to think about:
Financial performance: What are the company's growth trends? Is there any seasonality? Any customer concentration?
Inventory management: How is inventory managed and stored? What are the inventory turnover rates, and how does the company handle excess or slow-moving inventory?
Supplier relationships: Who are the company's primary suppliers, and what are the terms of the agreements? Are there any exclusive arrangements or long-standing relationships that may be difficult to replicate?
Sales channels: How are sales distributed across Amazon, Etsy, eBay, and wholesale channels? Are there any dependencies or risks associated with relying on a specific sales channel?
Market position and competition: What is the company's market position in the pickleball apparel and equipment industry? Who are the main competitors, and how does the company differentiate itself from them?
Intellectual property: Does the company own any patents, trademarks, or copyrights related to its products? Are there any licensing agreements or ongoing disputes regarding intellectual property?
Marketing and growth strategy: What marketing efforts have been implemented to drive sales and growth? Are there any untapped opportunities for expansion, such as entering new markets or developing new products?
💼 Due Diligence
Most ecommerce businesses share a few key areas of due diligence:
Financial Performance: Review the company's financial statements, including income statements, balance sheets, and cash flow statements for at least the past three years. Analyze revenue, profit margins, growth trends, and overall financial health. Look for any discrepancies or red flags that may indicate potential issues.
Operations and Supply Chain: Investigate the company's operations, including inventory management, order fulfillment, and shipping processes. Evaluate supplier relationships, terms, and dependencies. Assess the efficiency and scalability of the supply chain, as well as any risks or vulnerabilities that could impact the business.
Sales and Marketing: Review the company's marketing strategies, customer acquisition costs, and conversion rates. Analyze sales channels, such as online marketplaces, social media, and the company's own website. Understand the company's market position, target audience, and competitive landscape.
Technical Infrastructure and Security: Examine the e-commerce platform, website, and other technology tools used by the company. Assess the website's performance, user experience, and mobile responsiveness. Evaluate the company's data security measures, payment processing systems, and compliance with relevant regulations, such as GDPR and PCI DSS.
Legal and Regulatory Compliance: Ensure the company is compliant with all applicable laws and regulations, including consumer protection, product safety, and privacy laws. Review any intellectual property rights, such as trademarks, copyrights, or patents, and ensure there are no ongoing disputes or potential infringements. Investigate any past or pending lawsuits, regulatory actions, or other legal issues that could impact the business.
At DueDilio, we have specialized firms as well as independent professionals who focus on e-commerce. They will typically be a one-stop solution for analyzing this type of business. Costs can vary widely but for a small business like this one, you can expect to see proposals in the range of $3k to $6k - all in.
🚀 Growth
Optimize product listings: Ensure your product listings on Amazon, eBay, and Etsy are fully optimized with engaging titles, high-quality images, and detailed descriptions that highlight the unique features and benefits of your products.
Improve SEO: Optimize your website and product listings for search engines by incorporating relevant keywords, creating high-quality content, and building backlinks to improve organic search rankings and drive more traffic to your products.
Expand the product range: Diversify your product offerings by introducing new styles, designs, or equipment that cater to different segments of the pickleball market. This can help attract a wider customer base and increase sales.
Utilize social media marketing: Build a strong social media presence on platforms like Facebook, Instagram, Twitter, and Pinterest to engage with your target audience, showcase your products, and drive traffic to your sales channels.
Implement email marketing: Build an email list of past and potential customers and send regular newsletters, promotions, and updates to keep them engaged and encourage repeat purchases.
Leverage influencer marketing: Collaborate with influencers or ambassadors within the pickleball community who can promote your products to their followers, increasing brand exposure and credibility.
Develop strategic partnerships: Partner with pickleball clubs, organizations, or other related businesses to cross-promote each other's products or services, expanding your reach within the pickleball community.
Expand into new markets: Consider selling your products in new geographic markets or through additional sales channels, such as your own e-commerce website or other online marketplaces.
🙋🏻♂️ The Buyer
Could be a first-time business buyer. Interest in the sport of Pickleball would be a big plus.
💼 Online Service, Media, Marketplace
Resume-Writing Fiverr Service (QuietLight) - $830k
Service sold exclusively through Fiverr
Resume writing, cover letters, LinkedIn profiles
2 VA’s run the day-to-day; Automation & SOPs in place;
Revenue: $369k
Profit: $302k
Margin: 82%
Multiple: 2.75x
✅ What I Like
Interesting listing as I haven’t seen Fiverr or Upwork accounts for sale previously. I view these similarly to an Amazon business but for professional services. You have a captive audience that’s on the platform with the intention to buy. Should theoretically have a high conversion rate.
I like this evergreen niche, especially in today’s environment with mass layoffs. This business seems to have day-to-day operators in place and robust SOPs. Great margins. Opportunity for upsells and introduce additional products.
❓ Questions & Concerns
Is there a reason we don’t see more Fiverr, Upwork, and Toptal accounts come up for sale? What are the legal considerations?
Similar to an Amazon or eBay business, there is platform risk. Fiverr can raise their seller fees which would negatively impact the margins. In many instances, Fiverr is known as the low-cost solution where it’s a race to the bottom on price.
From an operations perspective, how easy is it to replace the 2 VA’s that are currently handling the day-to-day operations?
There’s typically no recurring revenue in this type of business. Valuation seems a bit elevated.
Here are a few additional questions to think about:
Account history: How long has the Fiverr account been active? How many orders have been completed? Is there any seasonality?
Revenue and profit: What is the account's average monthly revenue and profit? Is it stable? Have Fiverr fees increased recently?
Seller reputation: What is the seller's overall rating and client feedback? Has any negative feedback been resolved?
Competition: Who are the main competitors on Fiverr offering similar services? Assess the competitive landscape to determine the account's positioning and potential for growth.
Transfer process: What is the process for transferring the account ownership to you? Ensure that the seller is familiar with Fiverr's terms of service and policies regarding account transfers.
💼 Due Diligence
Finance
Financial DD should be straightforward here since all revenue is captured on Fiverr. Key questions will be around expenses.
You shouldn’t need to hire anyone for this part of DD but if you do choose to have a 2nd set of eyes, it shouldn’t cost more than $1,500.
Legal
You want an M&A attorney who can provide guidance on the legality of transferring a Fiverr account.
M&A attorneys on the DueDilio platform charge $250-$450 per hour.
DueDilio can help you hire an M&A due diligence professional to assist with this type of acquisition.
🚀 Growth
Optimize your profile and gig listings: Make sure your profile is complete, professional, and highlights your skills and expertise. Create attractive gig listings with clear descriptions, engaging titles, and high-quality images or videos that showcase your work.
Utilize social media: Promote your Fiverr gigs on your social media channels, such as Facebook, Twitter, LinkedIn, and Instagram. Share your portfolio, case studies, and client testimonials to demonstrate your expertise and the value you provide.
Network in relevant online communities: Join and engage in relevant online forums, Facebook groups, or LinkedIn groups related to your industry or services. Offer helpful advice, answer questions, and share your Fiverr link when appropriate.
Collaborate with other freelancers: Partner with other freelancers on Fiverr who offer complementary services to cross-promote each other's gigs and expand your reach.
Create content: Start a blog, YouTube channel, or podcast to share your expertise and promote your Fiverr services. This can help position you as an authority in your field and attract potential clients who value your knowledge.
Partnerships: Partner with high schools and colleges to offer services to students.
Expand: Introduce the service on other platforms such as Toptal and Upwork. Create a DTC website.
🙋🏻♂️ The Buyer
This would be great for a first-time business buyer.
🕸️ Twitter
It’s great to see opportunities posted on Twitter. I’m going to share the ones I see in this section.
⚒️Tools & Resources
I want to share some tools & resources that I have found helpful. Please note that some of these may contain affiliate links. This means that I may receive compensation if you sign-up and use them.
DueDilio - #1 marketplace to hire highly vetted M&A due diligence service providers. Your source for finance, legal, tech, and other key areas of due diligence. Submit your project, review proposals, and hire.
PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.
BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel. Local Boston company and I consider the founder (Adam Ray) a friend.
X5 Deals - Proprietary deal sourcing. They do the outreach and send you relevant, actionable deals directly into your inbox.
Import Dojo - a newsletter that sends eCommerce and Amazon FBA businesses for sale to your email inbox. They send deals each Wednesday at 9:00 AM CST.
Scott Oldford - If you're interested in gaining insight into the process of building, scaling, acquiring, and selling online businesses, Scott Oldford can help.
Deal Flow Scout - Peer-to-peer deal flow exchange. Free, open, transparent.
Deal Sourcing Guide - A directory I put together of online marketplaces, brokers, DFY deal flow, and more.
How did you like this issue of the newsletter?
If you enjoyed reading this newsletter, why not share it or subscribe?
Let’s connect: LinkedIn, Twitter
Important Disclaimer: This newsletter is provided for informational & educational purposes only, and should not be relied upon as legal, business, investment, or tax advice. This newsletter may link to other websites and certain information contained herein has been obtained from third-party sources. While taken from sources believed to be reliable, it has not been independently verified. The Business Inquirer makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. References to any companies, securities, or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any business, tax, or investment decisions. Content in this newsletter speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.