I’ve been on the seller side of this conversation before.
Years ago, I tried to sell my ecommerce business. I went through the process, talked to brokers, had buyers look at the numbers and eventually got an offer.
I remember waiting for that offer and thinking, “Alright, here we go.”
Then I saw the number.
Not exactly what I had in mind.
Looking back, one of the problems was pretty simple: I understood my business as the owner. I did not understand it the way a buyer did.
That’s why I wanted to have Joe Van Deman and Colin King from Circle City Capital Group on the podcast.
These guys have looked at thousands of businesses and bought more than a dozen of them, including ecommerce brands.
And their story starts on Craigslist.
Welcome to episode #55 of The Ecommerce Revolution Podcast, where we feature guests who are experts in their field to share real strategies to help you launch, grow, and win in commerce. If you want support on your journey, join our community of hundreds of entrepreneurs and get access to content, coaching, workshops, and a private network of fellow ecommerce entrepreneurs.
Yes, Craigslist.
Joe put up a post looking for business owners who might want to sell. Colin saw it, reached out, and instead of selling Joe a business, the two ended up becoming partners.
They spent the next year looking at more than 1,500 companies together.
That alone told me this was going to be an interesting conversation.
What I really wanted to know was this:
What makes an ecommerce business attractive to someone who actually buys businesses?
A lot of their answers were not complicated.
Clean books.
Know your numbers.
Separate your personal and business expenses.
Don’t make the business completely dependent on you.
Document what you do.
Have a team that can actually operate the company without the founder touching everything.
All pretty basic stuff.
And yet, a lot of founders don’t do it.
We also talked about valuation, which is where things can get uncomfortable.
A seller may think, “My business makes this much.”
A buyer may look at the same business and say, “No, it doesn’t.”
Joe and Colin got into add-backs, financial statements, bank records, tax returns and all the things buyers are going to look at when they’re trying to figure out what the business really earns.
That part brought back a few memories for me.
Another part I really liked was hearing about the businesses they tend to buy.
Joe called some of them sleepy brands.
That phrase stuck with me.
These are not always the hottest, fastest-growing ecommerce companies.
Some are old.
Some started as catalog businesses.
Some are running on outdated technology.
One business they looked at was still on Yahoo Stores.
For those of you who remember Yahoo Stores, welcome to the club.
But those businesses may still have something very valuable underneath the dust.
Good products.
Customers who keep buying.
A strong name.
And profits.
Joe and Colin look at those businesses and think, “There’s something here.”
Maybe the site needs to move to Shopify.
Maybe nobody has touched the email list in years.
Maybe the company is barely doing paid marketing.
Maybe some fairly basic improvements could make a big difference.
I found that part of the conversation refreshing because ecommerce can get so obsessed with the newest thing.
New platform.
New AI tool.
New marketing channel.
Meanwhile, Joe and Colin are still getting a lot of mileage out of email, Google, Facebook, Instagram and even direct mail.
Direct mail.
The old new thing.
They’re also experimenting with connected TV, so they’re certainly not ignoring what’s changing. But they’re not chasing shiny objects just because everyone else is talking about them.
One of Joe’s comments that really stood out was this:
Own your audience.
That means your customer relationship. Your email list. Your website traffic. Your ability to reach people without having to ask permission from Amazon, Walmart or some other platform.
From a buyer’s point of view, that matters.
Colin also talked a lot about unit economics, and this is one of those things every ecommerce owner should understand whether you ever plan to sell or not.
What does the product cost you?
What does it cost to acquire the customer?
What does it cost to fulfill the order?
What is actually left over?
If you don’t know those numbers, you’re flying a little blind.
Then, near the end, Colin flipped the whole conversation around.
Instead of only thinking about selling your ecommerce business someday, maybe you should think about buying one.
That got my attention.
Why build everything from scratch if another business already has the audience, product line, distribution or infrastructure you need?
We could have kept going on that topic for another hour.
There’s a lot packed into this episode, but the big takeaway for me was pretty simple:
Even if you never sell your company, building it in a way that someone else could buy it is probably a pretty smart way to run a business.
Cleaner financials.
Better systems.
Less dependence on the founder.
A stronger team.
A customer base you actually own.
That doesn’t just make your company more sellable.
It makes it a better company.
And one last thing: stay until the end for Colin’s answer when I ask what piece of technology he can’t live without.
It definitely wasn’t the answer I expected.
