Welcome!
I’ve looked at thousands of businesses for sale and learned to read between the lines. Every issue, we'll take a deeper look at a listing, learn something, and I'll rate the deal at the end!
This week’s listing: We found an eCommerce business all about #vanlife. They’ve got crazy organic traffic, claiming a 10x return on ad spend, and a catalog of 600 SKUs. I’m impressed.
The numbers: Asking $4.2M, based on $1.2M net income. But that price is “plus inventory”, and they claim an average order value of $900+. So that could be steep! Also: a 5-star Google rating, which is a big win for an ecomm business.
Green flags
Let’s start with the niche market. Selling van-life products means you’re targeting a passionate community that most people aren’t catering to. And these folks have built up a 5-star Google rating, so they’re already a trusted source.
Next: their web game is strong. If they’re driving 100,000 sessions a month of organic traffic — without heavy reliance on paid advertising — they are definitely doing something right!
And of course, the business is easy to run. The listing says it’s built as a lifestyle business, so if you’re spending a handful of hours a week on customer service, plus a few more on operations, that’s a nice side hustle… or just a relaxed career!
Then there’s the strong ecommerce setup. Their sales are spread over their catalog, with the top SKU only making up 12% of sales. That’s a great sign for an online business.
And all this stuff has serious growth potential. Improve the website, spend some more money on ads, and put in the time that the current owners aren’t… you could see big moves in not too long.
Red flags
One big question: has #vanlife peaked? It was definitely a boom during COVID, but there’s no guarantee it’ll stay big or grow.
Then there’s the fact that 70% of the orders are self-fulfilled. Managing a warehouse is a headache for day to day operations, and also puts a logistical ceiling on your potential growth.
Another potential pitfall: influencer dependency. They have a ton of content that drives their traffic — how closely tied is that content to the personalities that own the business? It could be difficult to move away from them.
What I’d ask
The listing says the top 5 SKUs make up 45% of sales. You’d want to ask: what are those SKUs?
Ideally they’re actually 5 different products. But watch out if they’re actually 5 variations of a single item.
(The other thing you learn looking at the SKUs is whether they’re one-time or repeat purchases — how much traffic is coming back to you?)
Where does the traffic come from? While the business claims 70% of traffic is direct/organic, “direct” is a pretty flexible term — and often it includes untracked visits, which might not be organic at all.
Then, ecomm questions aside, I’d want to see some detailed financials & inventory to make sure everything’s looking kosher. A lot can change in a year or two.
And finally, how critical are the current owners? Are their customers following them, or their business? How about the content driving all that traffic — is it their personal #vanlife blog, or is it evergreen stuff?
My rating
As the podcast’s resident ecommerce expert, Bill got pretty fired up about this one. And that’s rare.
But, when we talked about it on Acquisitions Anonymous we agreed that it's gonna need some strategic investments to get those operations smoothed out.
For me, this is probably an 8/10… only because Bill loves it so much.
What do you think? Hit reply and let me know!
Have a great week,
Michael
