Acquisitions Anonymous - #1 for business buying, selling and operating - This E-Commerce Dental Business Might Be Dead Thanks to Tariffs

Episode Date: August 26, 2025

In this episode, the hosts dissect a high-margin dental supply e-commerce carve-out deal and uncover how a recent legislative change may have obliterated its business model.Business Listing - https://www.bizbuysell.com/business-opportunity/high-margin-b2b-e-commerce-dental-supply-business-with-2-500-customers/2382931/Welcome to Acquisitions Anonymous – the #1 podcast for small business M&A. Every week, we break down businesses for sale and talk about buying, operating, and growing them.💰 Sponsored by:🧠 Powered by Acquisition Lab — Founded by Harvard MBA Walker Deibel, Acquisition Lab is your blueprint for buying a business. Get expert guidance, world-class resources, and a community of serious buyers to help you navigate search, diligence, and acquisition with confidence. Apply now at https://www.acquisitionlab.comFranchise Help with Connor Groce – Curious about franchising? Connor Groce, franchise expert and operator, helps people navigate the franchise world. He owns multiple franchises and now helps others find the right fit. https://www.connorgroce.comThis episode dives into a high-margin, B2B dental supply e-commerce business based in San Bernardino County, California. The business boasts $800K in revenue, over 2,500 customers, and sells fewer than 100 SKUs from a potential 3,000+. It's operated via Shopify with a purchasing coordinator in China and minimal owner involvement, and it’s being sold as a carve-out for $1.2M—including $200K in inventory.Key Highlights:- Asking Price: $1.2M on $800K in revenue (no cash flow disclosed)- 2,500 repeat dental customers and 60% returning customer rate- Operated through Shopify with Chinese sourcing- Major risk: loss of “de minimis” tariff exemption likely killed the margin- Sold as a carve-out with no formal P&L or financialsSubscribe 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]

Hey, Michael here. Welcome to Acquisitions Anonymous. Today's deal was a super cool one. Heather and I went through something in her hometown. That is one of the most interesting deals we've looked at for a while. It is a carve-out and also in the dental space and totally one that's getting screwed by the current change in the tariff stuff going on here in the U.S. in 2025. So hope you enjoyed the episode. We had a ton of fun making it. Here it is. of this. We don't have 100% years anymore. And thumbs downing on just the plus inventory line. Are you ready to take a leap into business ownership but you don't know where to start? Well, look no further than Acquisition Lab, the premier resource for entrepreneurs seeking to buy

their dream business. Founded by Harvard MBA and acquisition expert Walker Dibble, the lab is your fast-tracked success in the search diligence and acquisition process. With hands-on support, world-class resources and a community of like-minded entrepreneurs, Acquisition Lab gives you the tools and conference. to navigate every step of the journey. And we're proud to call Walker and Chelsea, the Labs director, long-time friends of the podcast. They're passionate about helping entrepreneurs like you take the next big step. So don't wait to make your business ownership dream of reality.

Visit AcquisitionLab.com today to learn more and schedule your free consultation. And when you do, be sure to tell them the Acquisitions Anonymous podcast sent you. So believe it or not, I'm in the same room that I've been recording from. The great thing is this room is getting transitioned from, what was called grandma's room at our house to now what is called my office. So now my kids are 16 and 19. And finally the room that their grandmother stayed in when she would come to visit is now technically my named after me. It is your office. All right. It only took my son being able to get drafted to change the name of the room. You've been promoted. That is amazing. But Mrs.

Gerdley did an awesome job. Got a new couch that folds out into a bed. So there's a couch back there, but I could turn everything so I get like a better background, better lighting. So I'm pretty stoked. Awesome. Good job. I'm happy about it. That is great. You can close your door. My office location in the house is not where I can close a door, which does drive me crazy. Yes. Yeah. Well, so you brought a deal. I brought a deal. This is in my neck of the woods. It's in San Bernardino County, California, not too far from me.

It is a high margin B-to-B e-commerce dental supply business with 2,500 customers. Asking price is a million-two. Gross revenues, 800,000, and it was established in 2021. Cash flow, not disclosed. My favorite number, not disclosed. Business description, turnkey operation with strong brand loyalty, serving dentists, clinics, and labs. I don't know what that last labs, AC.

are. This is a rare opportunity to acquire a fast-growing high-margin, B-to-B e-commerce business in the dental supply space, over 2,500 repeat dental offices and professional buyers. This is, this business is positioned for long-term success, scalability, and profitability. It's positioned for profitability. Operating on a streamlined Shopify platform, the business specializes in selling disposable dental products, endodonic instruments, and orthodonic digital solutions, such as custom aligners, impression materials, and 3D printing tools. Over 60% of orders are from returning customers, a testament to the product quality, competitive pricing, and strong customer loyalty. Despite minimal marketing, no social media, SEO, or paid ads, sales have reached approximately

800,000 annually and continued to grow. The current product selection is just a fraction of what's possible. There are over 3,000 skews in the dental industry, and the business currently sells fewer than 100. The operation is run from a minimal owner involvement and supported by a reliable purchasing coordinator in China who handles vendor communication and sourcing. The owner spends very limited time on daily operations making this business an ideal acquisition for someone looking to scale, integrate into an existing distribution model, or simply enjoy recurring cash flow from a low effort asset. This is a turnkey, relocatable, and highly scalable business, ideal for e-commerce investors, health care distributors, or buyers with access to marketing and sales expertise.

Please note that this is a sale of a D to C direct-to-c-to-consumer brand and is associated and its associated Shopify store, including digital assets, trademark, product lineup, and supply chain information. As the brand operates under a larger company, oh, interesting, and we are not selling the entire company entity, there is no formal financial documentation. P&L tax returns, etc. Shopify store performance screenshots, a full product list with purchase costs and selling prices. It includes the trademark, the website,

the Shopify store, customer info, supplier info, and $200,000 of active inventory that can generate up to $500,000 in revenue. No facilities. Let's see, they go through competition, blah, blah, blah, growth opportunities, you know, more skews, and owner is willing to provide 30 days of training, support, and vendor handoff, additional support, negotiable if you pay for it, basically. So interesting. What do you think, Michael, what is this? First of all, you get co-host of the day award for bringing this deal, because there's so much to talk about on this. So congratulations. I'm patting myself on the back. Good job, Heather. You defeated all of the competition. which was me, but well done. That's okay.

I'm so proud of it, yes. So, okay, let's maybe level set. So this business is, I'm going to ask this as a question. This business is a Shopify store that has a purchasing agent buying stuff for it in China, comes over to the U.S. and or drop shipped directly to consumers who are buying that stuff for dental offices through the website that they have. So it's like a,

it's a supply shop for B2B supply shop for dentists. Yep, basically. That's right. And we only know how much they sell. We don't know anything about the margins. And, you know, and this is what I call a carve out. So carve out means it's part of a larger company.

It may have shared services. You know, you don't know how the expense side might be kind of meshed together with that other company. And what they're saying is we're going to get rid of this sales channel and we're going to sell this sales channel off to you as a carve-out. And so when you try to figure out a P&L, you're basically just guesstimating and reconstructing what you think the P&L will be for you, what your costs are going to look like, what your margins are going to look like. It's a difficult, under any circumstances, carve-outs are very difficult to acquire. And carve-outs are so difficult that there are,

there are private equity investors who just specialize in them because it is so much harder than when there's a normal business. And so you either really have to know what you're doing or, well, it's just hard. So let's maybe double click on that. Like the specific thing you don't, what always happens in these carve outs is they give you kind of a fractional like version of the P&L for the thing. Like you know revenue, you know kind of stuff. but there's all these costs that have their tendrils elsewhere in the organization.

It's everything from like, you know, what percentage of the office are these people using? Did they eat the donuts last week in the conference room? Are you getting a better deal on HR because you're part of a larger organization? How much was the CEO actually spending on the thing but not like versus the rest of his business or her business? Like there's just so many things that are just unknown unknowns with, and that's why car routes are so hard. Yeah, even insurance. Think of things like insurance. If, you know, insurance is being paid by the larger organization, what is your new cost going to be and what kind of insurance coverage do you even need? Every single expense in the P&L is going to be different and you're going to be guessing at it, frankly. You know, educated guess, but it's going to be guessing. Yeah. So let me ask you this. Is this a business you want to be in right now? E-commerce dental supply? No. I feel like I feel like you could get crushed by much larger. companies in this space. I don't know what the moat would be. I didn't hear anything in here about

really unique equipment. It is coming from China, which brings the whole tariff picture into play here. I think this would be a very tough business to be in. And there's a reason why this larger company, whatever the larger company does, wants to sell this off and exit it. And I think that's that's the thing that would scare me. All right. It's time for a girly finger point moment. Okay. I will tell you.

I will tell you why. He's wagging his finger now. It's a curly finger point moment. I'm preparing for a future run for office. Dear Lord, no, I'd be so bad. You know what the problem is with me in political office? I like to tell people the truth. Right.

And you cannot be successful in politics if you do that. No. No. No. No. No. That's just I can't do it. No.

Free buses for everyone. Anyway, just kidding. Yeah. So the reason these guys are getting out of this, there is the legislative change with the de minimis exemption. Dementimus, yep. Are you familiar with the de minimis? We've talked about it, but yeah, share it again.

Allow me to mansplain you about this. Please, too. Yes, please, too. So, but yeah, the de minimis exemption was how so many businesses like shine and stuff like that existed, which is normally you have to pay tariffs on goods that come from China in the U.S., but if it's underst, 600 bucks, you typically did not, right? So the de minimis was why you would order stuff online and

you'd be like, why did they just ship this directly from Shanghai? Or why did your, for me is like, why did my phone come directly from Shanghai? It's because Apple was avoiding tariffs and that sort of thing. So I think this was a business built totally around the de minimis exemption where they were buying these things. They were warehousing them in Shanghai or whatever. And then they were shipping them directly to dentist offices from China. And that is all wiped down. out now with the Trump tariff changes. So this is a stroke of the pin risk business is what we like to call it in banking, meaning the business model can be destroyed by one stroke of the pen, one piece of

legislation. And that's what you're saying has happened here, right? That's what it looks like happened. And my suspicion is that has killed it. And now they're not competitive with the big guys who are like, I'm sure just like there's Granger. Have you run across Granger before that business? Industrial supply?

Yeah. Yeah. Yes. So basically what Granger does is have these big warehouses and all these markets and they sell you industrial stuff. Do you want to buy 500,000 screws? Well, you don't go to Home Depot for that. You go to Granger.

So basically, like, I think there's got to be Granger's for the dental supply space. And I bet now you are totally not competitive because this loophole is closed. I think that's the whole thing going on here. Right. So the ones that we're sort of doing it legitimately without the loophole are going to own the market. And the loophole businesses, this type, are unable to compete anymore because they're not going to have to pay the tariffs. Right. Yeah.

Subscale supplier business, not good. Not good. Not good. And there's nothing unique. Yeah, there's not some special product here or anything. So this is, this is buyer beware. This is a buyer beware sort of moment here. Someone might look at what they're pitching on this listing and think that they can make money with it somehow.

I mean, even asking a million two without any idea what the actual cash flow is, it seems a bit crazy. They're asking for a million two? They're asking for a million two on gross revenue of $800,000 and no idea if there's any margin, you know, if there was any margin before with the loophole. And certainly there is none left now without it. All right. That is just like, okay, well, I appreciate it. It would not surprise me if this business was incubated as part of a larger business. I've done that. And they've looked up and they're like, well, there's something here, but it's not great. It's hard to grow. And there's a lot of headwinds. So like, let's see if there's a greater fool to take it over. Hey, everybody. If you've listened to the show, you've probably heard us talk about franchises. While franchises can be a great path to business ownership for the right person, like there's a lot of pitfalls. And it's important to be really careful as there are certainly good franchises. be in and bad franchises that you don't want to be in.

Connor Gross is a friend of the pod and a resident expert on franchises. And Connor not only owns and operates his portfolio of multiple franchises, but he's also a franchise consultant and helps others work through while picking the right franchise for them. So as he's sponsoring today's episode, everyone should totally click in the show notes below to join Connor's newsletter and attend one of his gateway to franchise ownership workshops. If you're ready to move and move quickly, schedule a call with Connor and his team today. This is definitely the greater fool theory type of deal.

Yep. Well, as somebody who is only kind of a fool, not a greater fool, I'd probably a thumbs down on this one. I'd like to be a lesser fool as often as possible. So I will be thumbs down with you, yes. Oh, man. This was a great one. So, yeah, I mean, I think this is one of the first carve-outs we've done. It's totally getting screwed by a current event thing.

I got to stick my finger in the air, like 10 out of the 10. Good episode. This was fun. This was a good one. How'd you find this one? Biz Buy Sell, you know? And I think it came up because it's close to me. So there you go.

There you go. All right. Well, so it sounds like we're both thumbs down on this one. Yep, we are. Pass. Got to kiss a lot of frogs to find a prince. You do. Or a princess.

Correct. Or Subaru Outback. I was just making fun of my Subaru. Oh, you're Subaru. Okay. What kind of car do you drive, by the way? I have a Tesla. And it is not a political statement.

I happen to like it. I like driving electric cars because they feel much different. You know, they pick up a lot faster. Once you get used to them, it's actually hard to go back to gas because you rent a car and you go, gosh, what's wrong with this car? So I love my Tesla. And I use self-driving a lot. So watch out. You see me out there?

I'm not even driving. I'm just sitting there. Do you have a model Y? I have the X. Oh, you have an X? The larger one, yeah. The reliability stories on that are horrible. I know, but I haven't had any problems. I have heard that.

Yeah, mine's good. So Mrs. Gurdley, I was driving her car, and we got rear-ended. I was taking our son to something. And so basically the car is not drivable. So there's now a bunch of back and forth going on to try to get the other guys' insurance to pay for it because, you know, He's totally a fault. I mean, he told the officer, I didn't see them and I hit them.

I was like, okay, well, that's. Yeah. So we're on our third rental car now, and we went and rented a, we went to basically thrifty. And the first carol, they gave us, smelled like, was a Toyota Corolla, smelled like smoke. And my wife's like, I can't do it. So we went back in and we're like, this smells like smoke, not going to do it. So then they gave us, they're like, okay, we're going to give you a Corolla hybrid.

So 10 minutes later, we're sitting in the Corolla hybrid, trying to start. start the thing and the engine won't turn on. And I'm like, what is this piece of shit? Like, sorry, part of my friends, like, what is this UI doing? Because Toyota is so big. They think they can just design their own UI and they don't have to do the conventions everybody else does. And so we go back in and my wife says, yeah, the guy says everybody's doing what we're doing. Just put it in a drive and press the pedal. So I did it and we drove off. This is a hybrid. You know, you needed to learn these things. Yeah. There's some little tricks to the hybrids and the electrics, but I do like electric vehicles.

And you know what I love about Tesla is the buying process just seems so much better. So great. And in fact, I have to take it in for service. And even that's in the app. You make an appointment in the app and it even tells you, you tell exactly what's wrong. And it's going to even tell you exactly what the cost is going to, it tells you the cost before you even get there. It's awesome. I have owned four Subaru's in a row, and we are a two Subaru house. My wife loves her ascent. And it's the, every time I have to buy a new Subaru and go through the conventional dealer process, it's just hell.

And, you know, there's, it, it just makes me, that is probably going to be the compelling feature, where next car is just like either Carvana or, or Tesla. Yeah, yeah, Carvana's great too. I don't have it in me to go in there and be like, okay, like, let's talk to the finance manager. Do you want a maintenance plan? And I'm like, I want you not to do this high pressure crap to me. That's what I want. You know what I did? The last cars that I bought for my kids, I did negotiate everything or had them negotiate

everything on the phone. And I would approve it. And I told them in no uncertain terms that I'm coming in. I'm wiring you the money and I'm coming in and picking it up. That's it. Don't talk to me about anything. And that's how I do it if I have to buy it from a dealer. but I hate it.

I hate it. So I did that with our last Subaru. My wife's assent. I said, here's what we'll do. I'll call around. I'll do everything by the phone. You go figure out which car you want. And then whoever quotes us the best cash price,

we'll go with them. So one group quoted us about $1,000 less for an identical van as the other folks. And I called the guy. I said, we have a deal. Give me the exact walk out the door number that it is. We're going to show up with a check for that amount. and get home that night my wife goes to pick up the car she's like i love the car it's great

and then i'm like okay how did it go she's like well you know they added on 500 bucks on it for undercoat or some BS like that and i did not call i texted the sales rep and i said you turned me into a liar over 500 bucks you promised me this price and you guys took advantage of my wife when she was there because she's a nice person. And because of that, you either need to mail me a $500 check right now or I'm bringing the car back tomorrow and I'm leaving it in your lot with the keys in it, and it'll be running. And those are your two options. There's no in between. And 30 minutes later, he said, I talked to my GM or mailing you a check for $500. Unbelievable, though. It's just unbelievable. Yeah. Yeah, it's just why. I wire the money before we pick up the car. It's just I just, this is the final

It's wired. The paperwork is ready. I go in. I pick it up. But it takes quite a, I have to be very insistent even to get them to do that. It's horrible. It's just a horrible process. The thing I learned is they are all terrified of that post-sale survey that comes in. They're all terrified of. That's your leverage. It's a huge amount of money to them. If when Subaru or any of those guys or you buy a Toyota, when the manufacturer reaches out to you after your dealership experience, that is all the leverage that you have. All the levers again. They are terrified of getting one or two stars. Have you saying this is, yeah, awful. Yeah. Everybody should give them one or two stars, though, because it is pretty awful. The whole system. It's horrible.

We don't need it anymore. We do not. We do not. Buy a Tesla. Yeah, well, it was the whole dealership system was built for a time when cars were unreliable. And, like, the internet didn't exist. Telephones didn't exist. We didn't know how to finance things efficiently.

Yeah. Yeah, highways didn't exist. Like, they needed a trusted partner to run them. and build the market. And like that world left 30 years ago. We don't need it. Yeah, true. On that note,

on that note, join us next week for grumpy old folks, get mad about us. Old man yells a cloud. Grumpy old folks, yeah. Okay. Well, you're not old. I'm old.

No, I am old. I fully own it. It's okay. We good. All right. Everybody thanks for being here. Hey, great. Great deal today.

10 out of 10. Yeah, that was fun. All right.