The Business Inquirer - Issue #5 (11/30/2020)
In this shorter issue I highlight an app with local food & drink deals, a dropshipping store selling Lego-type toys, a Shopify freelancer marketplace, and 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.
Hello Friends!
With the Thanksgiving holiday, a bit of a shorter e-mail this week:
App/Ads - Food & Drinks Deals
Dropshipping - Lego-style Toys
Service/Marketplace - Shopify Freelancers
What I Learned Last Week
App/Advertising - Food & Drink Deals (Asking: $3.6k)
Description
Eat Cheap is an iOS app and website consisting of a library of the best local food & drink deals. Founded in 2018 and launched in 41 cities, the business uses a crowd-sourced model where local experts add & update the list of food & drink deals in their city. The business currently only generates display advertising revenue from AdSense on the mobile app and website. Low expenses and low revenue.
Details
Launched in 2018 in 41 major US cities
Library of 15k local food & drink deals
20+ local experts who curate deals in their geography
Assets include iOS mobile app, web app, custom CMS system
First page of Google for “Eat Cheap”
4.9 rating on App Store
Avg 1,200 unique visitors per month
No money spent on ads.
Expenses: $20/month
Revenue: $40/month
Net Profit: $22/month
Asking: $3,550 (auction)
🤓 Why I’m Highlighting This Business
Dining out will make a big comeback when we emerge from COVID and this business will have a lot of opportunities. Built by a team of technologists with a strong infrastructure, I think someone with a complimentary business or marketing expertise can turn it into a success. A lot of opportunities to monetize and expand to more cities in the US and internationally.
✅ What I Like:
Tech & infrastructure appears to be very solid
Consumers are always looking for food & drink deals. Evergreen space
41 major cities are live and operating with 15k deals
A lot of room to expand monetization & grow
Showed 10,000 ads last month to users
Have not spent money on advertising/marketing
Several exit options down the line
COVID has depressed this business, creating opportunity for cheap acquisition
Auction reserve met
❌ What I Don’t Like:
Strength of business will only be realized once dining out returns in full
No Android mobile app
Unproven business - low revenue, no marketing results
Requires tech know-how to run smoothly
Requires capital to invest in marketing
Auction. Tough to tell how much the business will sell for
🚀 How I Would Grow This:
Scrape existing food/drink deal websites and easily expand geography and number of deals available
Initiate content marketing strategy such as blog, e-mail, newsletter
Reach out to local micro-influencers focused on food & drink
Partner with local food blogs
Add additional revenue sources such as display ads, paid restaurant advertising, optimize mobile & web ad networks
Add additional filtering options in the app and web
Integrate with OpenTable/Resy and collect referral revenue
Research feasibility of expanding internationally. Perhaps license the technology.
You can view this listing on Flippa HERE.
Dropshipping - Lego-style Toys (Asking: $5k)
Description
Big Brick Store is a dropshipping business launched in 2017 on the Shopify platform. The store sells big bricks and brick sets which are similar to the well known Lego brand. All products are dropshipped directly from suppliers in China which have been sourced from Aliexpress. Business has minimal sales but the owner hasn’t focused much on the store over the last few years.
Details
68 products listed with more available on Aliexpress
30% average gross margin
AOV is $125
Monthly revenue of $398 - $2,148 over last 6-months
2,130 - 3,567 monthly visitors over last 6-months (note: seller juiced these numbers)
Expenses: $30/month for Shopify
Asking: $5,000
🤓 Why I’m Highlighting This Business
First, I think you can offer this seller $2k-$3k and they would take it. For that price, the acquisition makes sense here as long as you understand what you’re buying. What you’re buying here is a good URL and OK branding. You can continue with the store, shift direction to accessories, or use the URL for affiliate website. Importantly, for the $2k - $3k price, you get a nice margin of safety to resell the store if things don’t work out.
Lego and similar toys are in high demand…
People also search for “Lego Bricks” which is closer to what this store sells…
🚀 How I Would Grow This:
There are several directions you could take this business.
Continue with the current business of selling Lego-like products.
In this instance I would update the product offering, adjust pricing, buy a better Shopify theme, and re-organize the website. Absolutely no need to organize the website by brand unless there are people actually searching for “Xiangbao” brand toys.
Oberlo has a lot of offerings in the brick toy category…
Oberlo “big brick toys” Focus on accessories instead of actual bricks and sets.
Weekly Google Search: “Lego Accessories” Build affiliate website with reviews of various Lego-type sets.
If any reader is in the toy niche - would love to get your thoughts on this.
You can view the listing on Shopify Exchange.
Marketplace - Shopify Freelancer Agency (Asking: $5k)
Description
Shopision is a subscription service marketplace started in 2018. The vision for the business is to be a one-stop marketplace to find freelancers focused on the Shopify platform - developers, designers, content writers. Revenue is generated from recurring monthly subscriptions as well as a marketplace fee. There are currently 14 customers, 6 subscribers.
Details
Built on Webflow with a custom back-end ($20k spent)
Authority Score of 24, 6.9k backlinks
Includes company specific domains like Canada, Singapore, Mexico, France, etc.
Selling due to co-founder passing
Asking: $5,000 (auction). BIN: $10,000
🤓 Why I’m Highlighting This Business
I think the business concept here is interesting in that the goal is to build a freelance marketplace for everything Shopify related. Adding a monthly subscription plan on top is convenient for users. The listing itself is robust yet complicated at the same time. Would require a lot of due-diligence. Having said that, it appears to me like the website design and back-end is in place to try and grow this business. Business is generating some revenue but it needs additional freelancers, a marketing push, etc. Could be a nice business for someone who already owns an agency.
People need help with Shopify…
Shopify specific developers are in demand…
You can view the listing on Flippa.
🧐 What I Learned Last Week
BrickLink is an online marketplace to buy/sell Lego parts
As I was doing my research on Legos for one of the businesses above I came across BrickLink. Founded in 2000, BrickLink is a fan community and marketplace for Lego enthusiasts to discuss, trade, buy/sell their Legos. In 2019, the business was acquired by Lego for an undisclosed amount.
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Microsoft 365 is turning into a surveillance tool
Interesting Twitter thread here about some new features in Microsoft 365 which are marketed as “Productivity Scores” but look eerily similar to surveillance tools.
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Shopify NYT profile is a good read
As Shopify is trying to enter some of Amazon’s turf there are many questions about how it will strike the delicate balance between merchants and consumers. So far the platform has been focused on serving the entrepreneur but entering new markets would require a shift. This long NYT profile on Shopify is a good read and thoughtfully reviews some of these issues.
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Thanksgiving holiday mean to bring divided nation together
On October 3, 1863 President Abraham Lincoln announced that the nation will celebrate an official Thanksgiving holiday on November 26, 1863. In some ways, the holiday was meant to bring a divided nation together after the devastation of the Civil War.
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Jim Harmer of Income School talks about site strategies & YouTube success
Episode 28 of the Website Investing podcast is with Jim Harmer of Income School. Interesting and wide ranging conversation on how they sold their portfolio of websites, how they value websites, how they prefer to not use a broker, and other topics. Would recommend listening to the podcast as well as subscribing to the Website Investing newsletter. (I’m in no way affiliated with them)
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That’s all for this (shorter) issue of The Business Inquirer!
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Important Disclaimer: This newsletter is provided for informational 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.
Hi Roman, I just discovered your News letter, and have read everything, it’s amazing. Congratulations 🥳
I have a question regarding “Dropshipping - Lego-style Toys” were you mention Building an affiliate website with reviews of various Lego-type sets. Can you expand on this for me a little? Are you saying write reviews on your own toys? If you owned the site?