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Acquisitions Anonymous - #1 for business buying, selling and operating

This 19-Year-Old Surf Shop Makes $315K/Year — But Would You Buy It?

Apr 11, 2025
The podcast dives into a 19-year-old e-commerce business that sells surfing accessories, boasting $3.4M in revenue and $315k in profit. The discussion revolves around whether the $1M asking price—and an additional $1.5M in inventory—represents a smart investment. Key topics include the challenges of low margins, Amazon dependence, and the potential for growth through effective marketing. The hosts also explore the intricacies of consignment sales, inventory management, and how to navigate both opportunities and risks in the surf industry.
36:08

Podcast summary created with Snipd AI

Quick takeaways

  • The podcast discusses the financial challenges faced by e-commerce businesses with low profit margins, particularly highlighting the $1M asking price and $1.5M in inventory for the surf shop.
  • It emphasizes the missed growth potential through marketing, as the surf shop owner hasn't engaged its 80,000-person email database for years, which could significantly boost sales.

Deep dives

Challenges of Low Margins in E-Commerce

E-commerce businesses often face difficulties with low gross margins, especially those that do not sell their own products. The discussion highlights a particular business that struggles with an average order value impacted by its diverse inventory of over 30,000 SKUs. This issue requires substantial capital to be tied up in inventory, affecting the overall profitability of the company. A 10% profit margin raises concerns about whether the financial setup is sustainable given the high level of inventory investment.

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