This 19-Year-Old Surf Shop Makes $315K/Year — But Would You Buy It?
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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.
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insights INSIGHT
Drop-shipping Insight
The surfing accessories business likely involves drop-shipping due to the high SKU count (30,000) and limited warehouse space (4,000 sq ft).
The low average order value and high inventory costs present financial challenges.
volunteer_activism ADVICE
E-commerce Operations
Consider drop-shipping or Fulfillment by Amazon (FBA) to manage a large number of SKUs and streamline operations.
Analyze SKU-by-channel breakdown to optimize inventory and sales strategies on different platforms.
insights INSIGHT
Low Margin Challenges
E-commerce businesses selling other brands' products often have lower margins, requiring more inventory capital.
This necessitates careful financial planning and potentially consignment deals to mitigate risk.
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This week the team breaks down a 19-year-old e-commerce surfing accessories business with $3.4M in revenue and $315k in profit — but is the $1M asking price plus $1.5M in inventory worth it?
Sponsors: ⚙️ This episode is sponsored by Inzo Technologies — IT solutions built specifically for small businesses and acquisition entrepreneurs. Get a complimentary IT audit of your target business at: https://inzotechnologies.com or email Nick directly at nick@inzotechnologies.com.
💸 This episode is also brought to you by Capital Pad — the marketplace connecting acquisition entrepreneurs with investors. If you're looking to raise capital or invest in small businesses, visit: https://capitalpad.com
Episode Description: In this episode, Bill D'Alessandro, Heather Endresen, and Mills Snell dig into a fascinating 19-year-old e-commerce business selling surfing accessories. With $3.4M in revenue, $315k in profit, and a $1M asking price (plus a whopping $1.5M in inventory), the team debates whether this old-school online retailer is a smart buy or a capital trap. They discuss Amazon dependence, inventory consignment strategies, growth opportunities in marketing, and the risks of low-margin e-commerce models. This is the quintessential e-commerce deal breakdown!
Key Highlights:
Overview of the 19-year-old surfing accessories e-commerce business
$3.4M revenue with $315k in EBITDA
The challenge of $1.5M in inventory and low margins
Why consignment inventory might be essential to closing this deal
Breakdown of Amazon vs. DTC revenue mix
Marketing opportunities: email lists, Meta audiences, SEO
Risks of thin-margin resellers vs. owning your own products
Financing challenges with SBA lenders and consignment inventory
How lifestyle businesses create opportunity for acquisition entrepreneurs
Bill’s real-world insight on consignment deal structures
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