Bill D’Alessandro (@BillDA) and Mills Snell (@thegeneralmills) discuss two eCommerce deals today. These two listings have something in common: They appear to be sketchy!
We dig into how to spot hidden traps from eCommerce listings, and Bill throws some gems around operations that lead us to suspect that the motives for the sales go beyond what is stated in the listings.
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(00:00) - Introduction
(02:00) - Deal 1: 5-Year-Old Fly Swatter Brand Selling For Inventory Value Only
(03:40) - Do we think this is a good deal right off the bat?
(07:05) - Where is the inventory, and why does it matter?
(08:53) - Why would we buy this business?
(10:22) - What would we ask the seller if we had an interest?
(14:15) - Why do we think this is a falling knife?
(16:10) - Deal 2: Currency Counting Machines | $1.2M Revenue and $382K SDE
(18:20) - What do we like about this one?
(19:15) - Which moats should you look for in a defensible brand?
(23:48) - What would we consider a great product and a defensible brand?
(25:00) - What type of functions does their 3PL perform? Why is it important to understand this listing?
(26:45) - Why do we think this is a side hustle for the seller?
(31:05) - How should you think about buying inventory for an eCommerce business?
(33:00) - Why is this valuation crap? How should you reframe it?
(36:10) - Why is this not SBA eligible? Why are they selling this Business Unit?
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