Acquisitions Anonymous - #1 for business buying, selling and operating - A $6.4M Van Life E-Commerce Deal that Bill Loved! - Acquisitions Anonymous 303

Episode Date: June 4, 2024

In this episode, Mills and Bill discuss an interesting e-commerce deal for sale involving an automotive and travel brand that focuses on camper vans. The business is doing well, with lots of traffic to its website and a high average order value with impressive figures like $6.4 million in revenue and $1.2 million in net income. Tune in and enjoy this episodeCheck out the listing here: https://quietlight.com/listings/13563303/?utm_source=acquanon.com&utm_medium=podcast&utm_campaign=ep-303Thanks to this week's sponsor:Acquisition Lab and their team have been longtime supporters of the pod.Acquisition Lab exists to help people buy a business and navigate all the complexities of the process, as well as provide a trusted framework, tools, and resources to support you from search to close.If you are serious about buying a business, check out acquisitionlab.com or email the Lab's director Chelsea Wood, [e-mail] and mention us ;)Learn how to buy a business.If you are interested in buying a business but unsure how to start, you should check Michael's Buy a Business Course:You will learn:• Build a thesis for the type of business that's right for you‍• Learn how to stand out in a sea of buyers• Create a working, scalable Deal Engine getting you leads• Maximize your chances of finding great dealsSubscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

Do you think this business sells for this much? So it could be good or bad. I need to understand. The first thing is I want to make sure that we're all agreed on the same definition of skew. Man, I really like this one. This is one of the better deals we've done. Hello, everyone, and welcome back to another episode of Acquisitions Anonymous. I am one of your hosts, Bill Dallessandro.

And this week, we are talking about an e-commerce business for sale in the van life space, hashtag van life. Me and Mills talk about this business. And actually, I really liked it, which is pretty rare, especially for me in an e-commerce business. But this one has, it's 100% organic traffic. They do no advertising. It's been around since 2016 from our friends over at Quiet Lake Brokridge. There's actually a lot to like about this one. I think it serves as a model for what a good e-commerce business acquisition actually looks like.

So I hope you enjoy this episode. And if you don't have the patience to listen to the following 30-minute episode, come find us on YouTube shorts. We're doing a lot more YouTube content. Our episodes are on YouTube and we're doing shorts as well. So we'd love to see you over there. In addition to hear wherever you are listening to this podcast. So I hope you enjoy this episode of Acquisitions and Honest. Hey, everyone.

This is Bill. I'm just taking a quick break from this week's episode to tell you about a long-time sponsor, major fan of the podcast, Acquisition Lab. So a lot of our listeners that you guys tune in every week for our deal reviews, you want to get in on buying a business, but you're not really sure where to start. The cool thing about Acquisition Lab is they were created to solve that problem. So they exist to help people buy a business and also to navigate all the complexities of the process. They provide a trusted framework, tools, resources.

They kind of support you all the way from search while you're looking to buy a business, all the way to close. So if you're serious about buying a business, you want to learn more about the process, and you want someone to Sherpa you through buying a business, check out AcquisitionLab.com. Or you can email the labs director, Chelsea Wood, directly. It's just Chelsea at buy, then build.com. All right, Bill, another episode.

Me and you holding down the fort today. Michael and Heather are actually doing some work and we're just playing around with our cameras. I know. This is like if you tune into YouTube, you will see the transition. You'll see the lights just went off in my office. So we're setting up a new room for audio, for podcasting and kind of video production here in our co-working space. So I'm like the lights are going off because the motion lights aren't configured correctly.

I'm sitting in like a perch with a light and a blanket behind me. But hopefully the audio sounds good. And on the other hand, Mills. has just spent like three grand on new equipment, I think, because we're beating him up about his audio quality. And I have like none of it set up. So we're, we're well on our way, but I'm like, you know, 90% there and that counts for nothing. So yeah, but we're going to do a deal today. And it's a good one. It's a good one. It's an e-com deal. So I'm fired up. Yeah, this one's super interesting. This is right up your alley. And I think it'll, it'll be, it'll, it'll check some boxes, you know,

for for folks in our audience who have looked at e-commerce. Oh, man, of course, my new computer. Let me see if I can allow this. Mills gets a new computer and completely figures out or forgets how to use it. Yeah. Yeah, this is, it's, let's see, there we go, share. So while you pull it up, so this is from our buddies over at Quietlight. So I have been looking at Quietlight deals for probably nearly a decade now. And of all the Ecom brokers, I think Quietlight is the highest quality.

I mean, usually I think they usually have the best deals. I don't want to say reasonably priced because that implies low priced. It means that when it's a good business, it will be priced appropriately. And when the business has hair on it, it will also be priced appropriately. So I usually appreciate how right over home plate Quietly's valuations are. Yeah. Yeah. They know what they're working with and know what they're doing.

Yeah. All right. I'm going to read this one. It's on quietlight.com. SBA prequalified automotive and travel ecom brand, 70% organic traffic, $5 million, just over $5 million in revenue, top line. and at $850 average order value. When I saw that, I was like, I can't wait to hear what Bill has to say about this.

What is it? I know. So they actually, the headline is misleading. It says $5 million plus in revenue. They're saying $6.4 million in revenue. $1.2 million in net income. They're asking a 3.71 times multiple. So the asking price is $4.5 million plus inventory.

It said originally started as a blog in 2016. This WooCommerce travel and outdoors e-commerce business focuses primarily on the camper van space to support professional and DIY builders with a carefully curated product line meant for optimal function and durability. What's truly impressive is over 70% of the company's traffic comes from direct organic sources. This is due to the unique and extensive content library they've built over the years, which includes blogs, videos, and has led to over 100,000 organic page views per month. Marketing hasn't been attempted. until recently, but has already led to a 10-plus ROAS return on ad spend. About 95% of sales come directly from the websites. About 70% of orders are fulfilled from the business's least warehouse. The remaining 30% are drop ship directly from suppliers bill. I cannot wait to hear you talk about this.

The company has an in-house developed and branded product line and also distributes other popular brands in the space. That seems a little confusing. Sales are also quite distributed with the top skew accounting for only 12% of sales and the top five skews contributing 45% of sales. Part of the company's unique value proposition is its carefully curated catalog of the best road tested products tested for actual use. Customers in this space can be overwhelmed by the number of choices in the market. This company has set out to solve this problem. They've responded very positively based on the company's current five-star Google rating, all while

becoming a trusted brand. Two owners have built a solid team of travel enthusiasts who handled most of the day-to-day operation. Team is backed by strong standard operating procedures, enabling a smooth transition to a new owner. The owner's originally gotten to the space due to their passion and desire for van life travel, and the business has reached a size where it's taken away from their original goal of simple van living without the burden of needing to operate a multimillion dollar company. They do say it's SBA pre-qualified, and the term sheet is provided with the rest of the business information. So I think if you sign the NDA and Ethan is the broker on this, the advisor, I think if you, you know, e-sign this NDA, you probably get some more info. Bill, I mean, there are so many nuggets in here. It is just crazy.

Okay. So this is, so far as I can tell, they're selling something with an $800 average order value to the van life community. They are doing 70% of the company's traffic from direct or organic sources. Important note, direct basically just means we can't attribute it. And most websites on the internet are 50% plus direct. Just it posts kind of cookie apocalypse and basically just browsers in private browsing mode. And there's just attribution is not as good as it used to be. So I don't know that it's necessarily fair to say all direct traffic is organic traffic. But that aside, a 10x Roaz is incredible.

If they're spending dollars at a 10x raw as on Facebook, 95% of their sales drive free, from the website, 30% dropships, 70% from their own leased warehouse. So you probably need to put a 3PL in here. I think it's kind of funny they have, they say they're living the van life, but then they have their own warehouse, which definitely keep them in the same place, right? God, there's a lot to like about it, though, Mills. I mean, 12%, like their skews are diversified. Their top skews only 12% of sales. So if I had to guess, I'm going to guess this is some sort of either a rack or a, you know, maybe like an electricity system or like a packing system. Like, I don't want to say luggage, but like this is something to improve your life if you live

in your van. It could be like a trundle bed or, you know, something like that. Yeah, pop out 10 or something like that. A little 10. Yeah, something like that. I love that it's an $800 order value. I'm going to assume, I'm going to hope that this is their own branded thing. And they've decent margins on it. If it is, this is a great business to buy. And here's why. When you have an $800 AOV, if you got a decent margin, let's say you don't even have that decent of margin, and you got $400 a contribution margin in the sale, you know, by the time you ship it and everything and cogs and all that. Still, you now have $400 to play with on customer acquisition,

which is a ton of money. Yeah. A ton of money. And further, they said they've started advertising and they're already doing a 10x Roes. I assume this is on Facebook, which means you would spend, you know, 80 bucks to acquire a customer that you got a $800 average order value on. That will not scale. Like, let me just be clear. That doesn't scale. I'm sure that that's, that remarketing or like the first time this company has ever advertised. So, you know, I would not expect the 10x to scale. That's the first place I would look to, by the way. You know, how much have they spent? Is this all retargeting? Is it not? new customer acquisition. Do I think I can scale this budget? But if you can, there's just a lot

to like about this business. Mills, have you ever lived in a van down by the river? No. I mean, haven't we all dreamt about it, though? I mean, what do you think, though, Bill, about like this business, this segment, right, of van life and, you know, converting, converting vans into, you know, camper vehicles or travel vehicles, surely it hit its peak with COVID. I mean, everybody wanted to convert one of these vans. Is there a product? I think you could, you could sign the NDA, you could look at this thing. Let's say they have a proprietary product and there's some IP around it. There's kind of two ways I could see this going. One is this is like a single use. You install it once and improves your life and then like you never touch it again until you convert a

other van, which probably most of these people are not doing again. Or this is something that is kind of expendable in some way, shape, or form. I'm worried about they hit peak market already with just the secular demand that was happening. And then it's a one time you pay $850, you install it and you forget about it. And there's no real other than maybe a customer database that you could resell something else to. This might be just kind of a buy it and forget about it. type product one, right? I bet it is. I bet this is some sort of van capax, right? Like, this is something that you buy, you install in your van, and like, now it's great. And you probably don't need it again until you get a new van. I do definitely wonder about the COVID revenue trends

of this thing. That being said, I mean, it's 2024. We're pretty far removed from COVID. I think we're finally getting to the place where maybe you see 2023 and 24 numbers and you start to say this is normalizing a little bit. So yes, I'd be very concerned about the post-COVID come down. But if it's still around and it's doing well, I'm starting to feel okay. This is no longer a COVID bump. Yeah. Now, very, very early listeners may remember a deal that we looked at, that we loved, that

we were still finding our footing and we disclosed slightly too much information and had to pull the episode down because we didn't really. disclose anything, but we just, it was a very specific product. And it was in the van space or the camper space, really more than the van. And we said like a little bit too much of the verbatim lines. And within like, I think 24 hours of posting the episode, people were like, hey, I found the listing. Like how cool. They weren't malicious about it. But they were like, great, I found the listing. And you were like, right, we're taking it down. Like we, you know, it was, we had to tread lightly. And so I think this space is super interesting. And I don't.

know if we've looked at too many other things in this segment, but I really, I really like it. Well, I like it that this is, it's like a hobbyist segment. People in this segment are really into it. They're willing to spend money on upgrading their van if it's a cool product. And you're probably also not going to have, you know, some giant new company come in and compete with you. Yeah. You know, especially, I don't know what it is, but, you know, if they've got dyes or molds or, you know, some sort of engineering in it, if there's a little bit of a KAPX moat, like this. market just isn't so big that all the bit, you're going to be constantly flooded with competitors, I don't think, if there's a little bit of a Kappex moat. So I think you probably carve out a nice little business here. I do wonder if there's an influencer angle to this somehow, because it begins with originally a blog started in 2016, and it's on WooCommerce, which WooCommerce is

WordPress's ecom platform. So what this tells me is the blog was on WordPress, and then they bolted WooCommerce on top of the blog. So this is probably some, it's a content driven business, I would think, or at least their reputation in the market comes from the content. So I would want to understand if it actually is a person, an influencer who's driving it, like if it's got to be Mills with his beard and the van down by the river saying how great this is, now I'm a little nervous. But if it's, if the blog is something like, you know, top, you know, van like.

tricks or something and it's just lots of different content about van life, that's better because you can keep doing that. Yeah. And I expect probably that's how they've gotten this big if they say they, oh, we just started doing advertising and we've gotten this far without it. It's because the traffic's coming from somewhere else. And it's probably this blog. Yeah.

I think that's the danger probably more so in e-commerce than other segments is these like personality driven brands. Like you, there's some big names like Kate Spade and others who obviously have, you know, grown way past that and nobody even knows who Kate Spade is, but they still buy our bags. But especially in like the lower end of e-com, you get these personality driven, a really personality centric. And when I was doing sell side M&A work, we would always tell people, hey, as quickly as you can, try and get your name off the product. Like if this is Dave's, you know, portable van toilet or something and it's all synonymous with Dave, then, you know, you want to get your name away from it.

Because guess what? As soon as, you know, your face quit showing up on the blog or whatever, then, you know, people are going to immediately start to feel the difference. It's interesting that they say, too, that a bunch of their employment, like a bunch of their employees are also living the van life. So like it's a fully distributed workforce. Everybody just like gets their, you know, gets their Wi-Fi set up and they work from the van. I mean, I love that. Like how authentic, though, right? It probably is.

So if you read the listening again, it says the company has 70% direct organic traffic. This is due to the unique and extensive content library they've built over the years, which includes blogs and videos and has led to over 100,000 organic page views per month. That's pretty good. Yeah. So they built a business on top of that, which it kind of makes sense. If you have all of your employees are Van Life employees, part of the deal is like, hey, take out your phone. Yeah.

You know, you've got to take vlogs and write. articles about you living your van life. I would not be surprised to find that a lot of these employees are in fact 1099s and they're van lifers that they've found that have content, you know, hey, if you live in a van, you probably need a remote job. Yeah. Right. Yeah. Like it would probably be the ultimate job for you to be creating content about living in your van while you lived in your van and getting paid for it. So I would bet they've got a network of content creators who kind of work for them on an article by article basis and live in vans and create. And create this really authentic stream of great content. And that's what the business is built on.

And I mean, depending on the nature of this, if it's all like, here's how you take a, you know, stock van from the dealer and retrofit it into a van you can live in, most of that content is evergreen, you know. And maybe they've started to do some other things too. Like, hey, you know, here's how to orient yourself to a, you know, campsite when you pull in at night. Or here's how you park your camper van on a hill and still sleep. Okay. Like, whatever the videos are, they probably are evergreen in nature. It's not, you know, probably dominated by the top five van products of, you know, March 2024 or something like that, which that stuff is just the half life on it is, you know,

way, way, way, you know, just it's a death spiral. I'm sure they're doing that, though. I'm sure every couple months they come out with the top five van toilets of 2025. Yes. You know, because you have to. You have to play that game. One thing I would also diligence is I've seen a couple of these businesses for sale where let's just go with, you know, Dave's van toilets and if it's Dave's van

life.com. I've seen a couple of these businesses where they try to sell the Dave's van toilets business on its own, but you don't get Dave's vanlife.com or Dave or any of that, which is obviously dead on arrival, right? I mean, there's just no, you can't, because that is the lifeblood that has built this business is the traffic from Dave's van life.com or whatever it is. So, I mean, the first check the box or walk away item is that you are actually getting as part of the transaction all of the properties that are owned by seller that drive

traffic to this because a lot of times these guys will have several websites or like what about the guy's Instagram account if it's his personal Instagram account. What if it's his Twitter or whatever it might be his TikTok, his whatever where he's posting about his van life. If he stops doing that and it's you know if it's at Dave van guy right you might have a problem. So what I would be figuring out is this business, what I love so much about it is it's built on organic traffic. It's so hard to find one of these. Yeah. Right?

They're barely doing any pay customer acquisition. It's built on really good content that people are coming to learn from. And then they also buy some stuff. But you need to make sure you're getting that organic engine because you could very easily accidentally not get the engine and let Dave keep his Instagram account. And then you have a problem. All right, Bill. we've talked about some of these in the past that are more kind of, I would call them pump and dump. You know, it's not built on organic traffic. It's somebody who you know, because you've told us, right, there's signs.

This is probably their third or fourth or fifth or six, one of these where they get it to a certain size and then they try and offload it. The organic versus inorganic functions, you know, what are the big telltale signs of that? Is it just customer acquisition costs? And in this case, it's kind of, content driven. And in the other case, you can clearly see, okay, they're a machine at spending money on Facebook ads. And most brands are machines that spending money on Facebook. And they're going to want to talk about their ROAS and how much money they've spent. You're going to see a big fat line item on the P&L going back years of giving money to Mark Zuckerberg. That is what most businesses look like. And I'm not saying that is inherently bad. Yeah. But what makes this one,

I think, unique is it sounds like it is not that. They just have the stream of traffic. from organic content. Also, one of the, one of the tells, I think of a great business to buy is that it's run on WooCommerce. When we bought National Dog Company, it was run on WooCommerce. And it's, it's kind of like saying like the house has a crappy, outdated kitchen. Yeah. Because like you don't really build WooCommerce sites anymore in 2024. I mean, there are reasons. All the WooCommerce people are kind of come after me in the comments. But like, generally, you build on Shopify. And what this tells you is this, business is probably, I haven't seen it, but this business is probably succeeding despite a god-awful

website. And it reminds me my friend Dana Juan Zemis, who I don't know if she's listening, but she once said that her tagline was, she said, I buy ugly websites. Because Mills, I don't know if they have them down where you are, but we have in Charlotte, North Carolina, these billboards these people put up. We buy ugly houses. Yes, yep. Right? Because those guys know how to remodel a kitchen and a bathroom and flip a house. Yeah. And, you know, Dana or an e-commerce investor, like, you know how to make a, like, an ugly website doesn't bother you because you're going to spruce it up.

So when I see WooCommerce and 2016 in the same sentence, I go really ugly website, opportunity to spruce it up, improve the conversion rate. And then I see none, no paid marketing, 10X ROAS, opportunity to start doing paid marketing. I mean, there's a lot to like here. Yeah, I really, I really think so. All right. What about this 70% of orders are. fulfilled through their own leased warehouse and 30% are drop shipped.

Like, as a total outsider, what I'm thinking is they used to have a warehouse. They filled it with stuff and then they did their own fulfillment. And then that 30% has been eating into, you know, their total amount of sales because they're like, hey, wait, we could find and source some products and it's just going to get drop shipped. And like, maybe they're growing out of their own fulfillment. Is that, do you see that? That's not. I mean, it could be that.

That was not how I read it at first glance. So usually what happened, if I'm going to guess, so the $800 AOV is what's tipping me off here. So they've got, I'm going to assume like it's a little bit bulky or something, right, this $800 thing, whatever it is. I think if they sell the $800 thing, they probably do it in their own warehouse and they ship it out, they got to deal with FedEx and they know how to put it on the palette, whatever it might be. But then what happens is you go, geez, you know, I've selling the van toilets, but like we should sell a van toilet paper. or like we should sell whatever, you know, 10 or 12 different accessories, and then you start just finding accessories vendors. And then somebody buys the van toilet, but then if they add the toilet paper, their order,

the toilet paper gets drop shipped because they don't want to bring the toilet paper into the warehouse. They don't want to do all about these onesy, twosy orders in the warehouse, et cetera. So if I had to guess, usually what you see is drop shipping is when you add product lines that are kind of commoditized that they're kind of basket builders, like AOV builders, like, hey, you're buying this toilet anyway, like the, Don't you need some toilet paper? Throw it in.

We'll make a couple bucks and someone else will send you a separate box with the toilet paper in it. That's my guess. Yeah, I think that makes sense. And yeah, all the different stuff that could go along with it, you know, that's ancillary, which is 12 percent, you know, they say their top skew accounts for 12 percent of sales and top five or 45. Is that good?

Is it bad? Is it, are you indifferent? So it could be good or bad. I need to understand. The first thing is I want to make sure that we're all agreed on the same definition of skew. So let's assume for a second like this is a roof rack, right? I have seen people go, oh, well, we have 50 skews and our top one is only 12%. It's like, yeah, it's all the same roof rack.

It just fits different models. Yeah. Right? Like it doesn't count. Like you're selling one roof rack with 50 variations. Or it's different colors or something like that. Yeah, different colors, different fitments. This one's for a forerunner.

This one's for a Subaru, you know, whatever might be. That is not, that is skew concentration. Those aren't different skews. So assuming that's not what's happening. So here are the pros and cons of what I would call a hero product, which is like 70, 80% of sales versus a distributed model. On one hand, hero product feels risky because if that product falls apart, your whole business falls apart.

On the other hand, hero products are great because it means you can move big volume through that skew. It's easy to run your business. You don't need a whole bunch of skews, right? you just reorder the one thing that you sell a crap load of from your supplier every time you need to sell more of it. You usually can get a good price on it. You can iterate the product and make it really, really good.

And it's not distracting. You just go all in on the hero product. Yeah. But, of course, the flip side of that is risk. On the other hand, having lots of skews is great because you're de-risk. But on the other hand, you don't have any scale in anything. I mean, Mills, how much revenue does this business do? If you scroll back up.

Yeah. I think it was like $4 million. Yeah. Something like that. 6.4 million. So, so 6.4 million. So 12% of 6.4 million, $650,000.

You know, maybe $700,000. So your best skew is doing $700,000 at an $850,000. You're selling like a thousand of these a year. Yeah. Right? Your top skew, roughly, not even. So, like, it's pretty hard to build any volume or automation or anything. in that one skew if you only sell on anything, if you only sell a thousand over a year.

Right. So I think it depends a lot on the business. It's idiosyncratic where having a hero skew can be great or having no hero skew can be great, kind of depending. Do you think this business sells for this much? I do. I do. So they've got it priced at 3.7x.

So net income is $1.2 million. They've got it priced at 4.5. So that's the 3.7x plus inventory. They don't mention how much inventory there is. Who knows? But I bet they get roughly this. It's below the $5 million SBA cap. Let's say you got half a million bucks of inventory.

You're at roughly a $5 million total transaction value. It's aged. It's been around since 2016. It's organic content driven. It's big enough. I mean, it's $1.2 million in that income here, like that it's kind of scaled out of that hobby business phase. I'm absolutely sure someone's going to. going to buy this at asking maybe above. What's the bull case of this bill? Like if somebody,

if you were pitching, you know, an investor and you were like, hey, I'm going to do this deal. I know this isn't in your strike zone anymore. But like, if you were pitching this, what's the bull case here? I mean, I just go down this listing. So first thing I would do is I would go, this house has an ugly kitchen. It's on WooCommerce from 2016. We're going to remodel the kitchen. right so we're going to improve the website it's going to improve the conversion rate so if 100 people come to the website instead of two of them buying something three of them are going to buy something boom the business just grew by 50% overnight which sounds right oh two out of 100 people buy something three of 100 buys something and by the way it's a very common conversion rate on the internet

2% is you get 2% of 3% it sounds like not a lot but you just grew the business by 50% right and traffic didn't change at all so that would be thing number one that I would do right away is now of course you've got risk here because this is an organic content business, so it's driven probably a lot by Google rank and SEO. WordPress is known to be very good for SEO. Google understands WordPress very well. So you turn this thing upside down,

you run the risk of killing your business because you may goof up your SEO and you may lose those 100,000 organic sessions a month. That would be very bad. So there's risk here. But if you can get the website redone without nuking your SEO, you could grow this business substantially, I would guess.

So that's thing number one. Thing number two, start running ads. I mean, you got a 10x Roas. It's not going to scale, but even if you've got a 5X ROAS, like rock and roll. You got a 3X ROAS, rock and roll. So I would just start dumping money into ads. I would think, assuming that their supply chain can scale from here, assuming there's not like anything really wrong with it, you could probably take this business from six and a half

million to 10 million just on those two things. Wow. And you don't think you have to add because to me my mind goes towards, I mean, one, I don't know how to do any of those things. And then I'm concerned about the risk of, okay, the seller is the, you know, they're the expert, right? They're the person who's on stage talking about these things more than likely, even if it's just on their blog and that's driving the content. I would want them, you know, if not around and rolling some risk forward, I would almost want them around just to say, hey, when your mind is clear and three months from now, when you're not involved in day-to-day operations, I want like first pick on the next idea.

And not only do I want first pick, like I want you already maybe rolling equity or something in this so that when you have that next idea, you know, where to bring it and we'll source it, we'll fulfill it, you know, we'll run all the product, we'll run all the back in. And by the way, you still own 35% of this thing. And all you have to do is just solve problems in van life. and come up with new product ideas. Yeah. Yeah, exactly.

I mean, I would bet money, like in the case of Dave's van toilet or whatever, Dave is a product guy, not an e-commerce guy. Yeah, right? You come up with new ideas all the time. That being said, you buy this business. Your plan cannot be to continue to be dependent on Dave for your new product ideas. What you need to do, you know, we joke, okay, you buy a coffee shop in Pasadena and you're moving to Pasadena.

Well, you know what? You buy this business? You're moving into a van down by the river. You are living the band life. Like, you've got to become the customer here. You've got to understand how your customers view the product, how they use it, and live in a van yourself, understand it so you can come up from new product. You need to have some way to build this business without just relying on metaphorical Dave to tell you what to do next. Yeah.

All right, Bill, in the post kind of Thrasio heyday and the post, you know, Amazon FBA, they don't say anything about Amazon here, which I think we haven't mentioned, but is a huge. I didn't mention that yet. Yeah. Yeah. But in the kind of post heyday of that, who is the buyer type for this? I mean, there's still enough e-commerce aggregators out there who would say, checks the box on average order value, checks the box on, you know, ugly kitchen, checks the box on just total dollar amount of net income.

It can be integrated and you can afford to take some risk. Is that, is the kind of legacy aggregators, the ones who are still holding out? Are they the only real viable buyer for something like this? Or does an individual do it? Oh, no. I bet this gets sold to an individual. I really do. Because they'll pay more or because? Because they can. It's still an SBA zone. Right. So I can compete with a $5 million SBA loan. It's in the strike zone for that. There's no Amazon at all. There's this kind of we own and operate. I don't know if they own, but they operate their own warehouse. That in the AOV is telling me this is probably a bulky item that maybe a 3PL doesn't want to do or there's there's some light kidding and assembly involved. And so a 3PL doesn't. want to do it. That's just hair and aggregators don't like hair. Like they don't like things that can't be streamlined. So I think this is very winnable, you know, guy or girl with SBA loan can very much win this thing. Probably key operating the warehouse, taking it to Amazon.

That's the other thing that kind of makes me think it's bulky because I bet FBA is not on the table for this thing because it's big and bulky. And the seller's probably just gone, well, I guess I can't do Amazon. You know, doesn't mean you can't do seller. filled prime. Like, there's ways to do Amazon without doing FBA. So I think figuring out that Rubes Cube could probably also bring growth to this business. Will you say a little, I know we're, we're kind of running up on time, but will you say a little bit more about that? Because my understanding is Amazon has sortable and non-sortable facilities. And like, you can buy a kayak or a television from Amazon. Do the fees just make it cost prohibitive? The fees just murder you. Yeah.

You just get murdered on fees. So like anything like big and bulky, Amazon doesn't want it. Like, they don't want to do that. So they just charge you like crazy for it, which you then have to pass through to the consumer. Right. So then you end up with very disparate costs between doing out of your own facility and doing out of Amazon's facility. And then you have to charge a lot more on Amazon and it just kind of doesn't make sense. Yeah. That or if there's like kidding in assembly or like it's big enough, it's got to go on a palette. Like Amazon doesn't do that. There's something here that's driving their own their own warehouse and not even the 3PL, I would think. Hopefully it's not too hairy, but it's probably keeping them out of Amazon.

But finding a way to list the product on Amazon and then do the fulfillment not on Amazon, even if it's merchant fulfilled, even if you don't go all the way up to seller Phil Prime, even if just do merchant fulfilled to grab some of those orders. A lot of times you're running sellers who are like philosophically against it. They're like, oh, I don't want to pay Amazon. It's an $850 a.OV. I can't afford to pay Amazon a 15% commission on this thing. I want to drive people back to my website.

And it's like, yeah, but you're missing all of those people. or on Amazon. I mean, it's incremental. Yes, it will cannibalize 10 to 15%. But there's all these incremental people that are just that are there you wouldn't otherwise get. Man, I really like this one.

This is one of the better deals we've done in a long time. Yeah. I think it checks so many boxes. I'm kind of curious to know, you know, what, like, what is it? And part of me wants to message Ethan and say, like, are you, you know, like, where are you in the process? because I'd be willing to bet that, you know, like there's somewhere down the road. Maybe somebody's under LOI or in due diligence or something like that.

Typically, when we like something, that's the case, you know. Yeah, I bet they're getting a lot of bids on it right now. Yeah, yeah. Man, that's a cool one. I appreciate all the insight you have on it because it just totally, you know, opens up. It's like I look at it in black and white and you look at it in color, you know. Yeah, well, same thing. We'll do a construction business or roofing business next time and I'll feel the same way.

Yeah, I like this one. So, again, it's by Quiet Light, Quiet Light Brokerage. I'm sure you can find it. It's live on their website, now-ish. I think this episode will come out pretty quick. So if you guys like this episode, we would really appreciate it if you would go find us on Twitter, subscribe to the pod, or go to our website and get on our email newsletter. We send out newsletters a couple times a week with all the new episodes, commentary, things like that.

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