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Posted

Funny, came here right after reading that as well, fascinating blog post for sure.

 

He's selling that business but keeping the CB Radio business that was doing $1m+ a year after its second year. 

 

There was a post on here a while ago about someone looking for a way to invest $100k unconventionally, this sort of thing fits the bill!

Posted

Hm i think its not a good idea to value it on pure earnings. It sounds as its easily replicable especially now when all financials are public and it has so much publicity. So you have perhaps 1 or 2 years until someone steps in and beats down the margins or takes customers of you. And it needs active work, even if he says its not much time necessary. I would say around 2 years profits could be a fair price (130k), so i would pay 1 year profits or 65k.

 

But in reality i have no clue.  ;D ;D

Posted

I think my lack of skills puts me out of the running on this one.  I don't know anything about trolling motors or running an internet business so I'd have to hire someone to do it, and I bet I'd have to pay them more than 15k/yr.  And I bet I'd still have to spend several hours a week dealing with it.

 

If I could go in as a silent partner with someone with experience I might go in at some extemely low multiple of earnings.

Posted

I have a friend that owns businesses like these and he had this to say, for what it's worth -

"Interesting - and sounds like he's exiting the affiliate space like just about everyone else. Google's killed traditional online marketing with their updates and nobody has the stomach to keep relying on them for traffic..especially since they're becoming the affiliate themselves.

 

That being said, I'd totally buy it for $100k. He hasn't done shit for his SEO since 2010, and that's a big deal. You could also easily outsource the telephone calls so you're running 12 hours a day at least, not 4 hours a day on MST - I bet there's a significant amount of sales drop off because of that, not to mention waiting for emails and voice mails to come in. Just pay $1500 and get live chat 24/7 at least. Lots of easy changes to make that would up the traffic and conversions."

Posted

Given the risks associated with operating an online store which has been this publically advertised, as well as my own lack of knowledge, the most I would pay is about 75k

Posted

Great article. I agree it's a very bad idea to rely on Google for a majority of your business...and a lot of e-commerce sites are just one algorithm change away from losing their rank in the search engine and hence losing majority of their business to the next guy.

 

This specific business doesn't seem to be too reliant on Google since "only" 35% of comes organically from Google. That the site has emerged relatively unscathed from the multiple algorithm changes in the past few years probably means that this niche has too little competition and, in the eyes of Google, this site has original and relevant content.

 

Sales could definitely be increased if one were to widen the customer-service availability to, say, around-the-clock.

 

As for what price I'd pay - 2x net income seems okay but only if it's financed in part by a note payable or an earn-out. I want the seller to remain interested/motivated in seeing the buyer succeed after the sale is consummated.

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