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NOTABLE! I just sold my first eCommerce business (FU money!)

Discussion in 'General Entrepreneur Discussion' started by biophase, Jan 27, 2018.

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  1. biophase
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    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Sure. My first business was started with $100. I didn't have any money to grow it fast. But I don't think that was the main reason. If I had to list the top reasons for rapid growth...

    1) Amazon as a platform vs. my own websites - Amazon allowed me to grow very fast because the traffic was there. I just needed to provide my product onto its platform.

    2) Social Media - My first business wasn't social media friendly, my second one was and gets many mentions and shares everyday

    3) Experience - From my past years of experience, starting another Ecommerce company is very easy (in fact I just launched another one today, finished its website last night)

    4) Money - I had enough money to buy as much inventory as I needed without ever thinking about budgets. I could also afford to run at low prices producing low margins and not care. Having alot of capital is not always a good thing as I had some losing products that I launched before vetting 100%.

    5) Niche Size - My second niche is huge, in fact it's not even a niche, it's a category. My first store was in a small niche within a niche.
     
  2. Paul Thomas
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    Paul Thomas Bronze Contributor FASTLANE INSIDER Speedway Pass

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    This is awesome I remember reading all your posts when I first joined here years ago.

    One question I'd have is - > are there any key factors that you believe made this business sellable and things that if done the wrong way would have made it "unsellable"?

    The reason I ask because in today's ecom world a lot of products are very very very similar if not identical, with different brands, marketing, etc - so just looking to understand key points to focus on in an effort to build something sellable.

    Thanks and Congratulations!
     
    Xeon likes this.
  3. Paul Thomas
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    Paul Thomas Bronze Contributor FASTLANE INSIDER Speedway Pass

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    If your own website sales are mainly paid traffic (and not organic) - does it still raise the number as the buyers consider it another proven channel?
     
  4. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    True, but I was still represented.

    Ultimately the "how" depends on the size of the sale. Mine was large enough that an investment banker rep'd the sale. Smaller sales can go by way of business broker. Even smaller sales, by way of Flippa or Empire or BizBuySell.
     
  5. HackVenture
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    HackVenture Digital Marketer, Crypto Guy Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass Summit Attendee

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    CONGRATS @biophase I've learnt so much from your other posts, thanks for the inspiration on your mega sale! Can't wait to hear about how you explode your 2nd business from here.
     
  6. biophase
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    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Yes, I think that I was in a niche that wasn't competitive and the buyer liked my product selection. The fact that it was branded was also a strong selling point.

    I think that any business is sellable. Someone is willing to buy it, but you have to produce a clean running business with no excuses to ask top dollar.

    For example, I wasn't asking for more than it was worth due to potential, or the fact that I never emailed my list, or really fine tuned adwords. There was never any talk of future growth added into the valuation. I just showed a consistently growing business and priced it at last year's earnings.
     
    GeoffW, Jamaal, Ross Morgan and 3 others like this.
  7. biophase
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    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    The paid traffic would be included in the advertising expenses so the traffic does count. But the paid traffic would have to be profitable or it would detract from the business value. I'm not sure if many buyers would even look that deep into it though.
     
  8. TreyAllDay
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    TreyAllDay Whatever it takes Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Very interesting! I'm a bit embarrassed I did not even know business brokerages were a thing.
     
  9. Venom AD
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    Venom AD New Contributor

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    Okay so if you want to cash out there are resources you can use to find potential buyers, very cool.

    Thank you for your time.
     
  10. Paul Thomas
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    Paul Thomas Bronze Contributor FASTLANE INSIDER Speedway Pass

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    I gotcha, I was saying more along the lines of its not "passive" like organic traffic so might take away from the value. But this makes sense, thank you!
     
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  11. LuckyPup
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    LuckyPup Done Dicking Around Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    If I could bake, I'd bake you a FU cake! Sincere thanks for sharing and for all you do here.
     
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    jick5555 Contributor

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    Really enjoy reading posts like this, Congratulations dude.
     
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  13. Action Mike
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    Action Mike Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Congratulations!!! The FU section of unscripted was one of my favorite I have ever read in a business book.

    Thanks for the post and all the advice you give, it helps tremendously to those in the beginning stages.
     
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  14. Gutski
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    Gutski 我很快乐! Read Millionaire Fastlane I've Read UNSCRIPTED

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    Hi @biophase
    Thanks for the post. It is encouraging for a newbie like me!
     
  15. Nik@16
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    Does the deal includes previous year retained earnings and present year profits too ?
     
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  17. garyfritz
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    garyfritz Silver Contributor Read Millionaire Fastlane Summit Attendee

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    Very happy for you Kenric! I hope the next business is even more fulfilling than the first.

    I'm kinda amazed that ecom businesses -- especially exclusively Amazon-based businesses -- sell for 2x. Assuming steady performance it takes 2 years to get your investment back. Amazon could screw you 16 ways to Sunday in that time, and completely wreck the structure you built on. I'm surprised that inherent risk doesn't lower the valuation more.
     
    RMDS likes this.

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