with Profitable ecommerce business (saunas and hot tubs) · Profitable ecommerce business (saunas and hot tubs)
LenderHawk analysis. Not affiliated with or endorsed by Acquisitions Anonymous.
The listing was attractive mainly because of its scale and profit, but its drop-shipping model likely reduced the multiple relative to branded e-commerce peers.
Drop-shipping can push an otherwise profitable e-commerce business down to a much lower multiple because the buyer is mostly purchasing a sourcing arrangement, not a durable brand moat.
A Shopify app with sticky installs can trade like software even when the underlying code is mostly commodity infrastructure built on AWS and Twilio.
Strategic buyers can pay dramatically more than financial buyers when a small product fills a portfolio gap or creates cross-sell opportunities.
A consumer product that looks simple can still command a premium if customer acquisition is efficient and the category is highly giftable or emotionally driven.
High annual recurring revenue is not enough by itself; retention, install friction, and distribution channel quality drive the real multiple.
The market for Shopify-app rollups is heating up, which can lift multiples as more capital targets the same acquisition set.
A business with minimal proprietary technology can still exit for millions if it launches at the right time and captures category demand early.
Enterprise procurement software with strong growth and low churn can justify a strategic acquisition price far above what a pure financial buyer would pay.
A business can become valuable primarily because it launches into a fast-growing category at the right moment, not because the product is technically hard to build. Timing and category selection can dominate technical complexity.
When to use: Use this lens when evaluating early software or internet businesses whose core product is easily replicated but whose market timing is favorable.
The real asset in many software-lite businesses is customer access, installed base, and channel presence rather than proprietary technology. Once switching costs and workflow integration exist, the code itself matters less.
When to use: Use this when assessing Shopify apps, SaaS tools, and marketplace-native software where implementation friction creates stickiness.
The hot tubs and saunas business did about $5.2 million in trailing revenue and $2 million in trailing profit, but sold for just above $3 million.
Andrew introduced a profitable e-commerce listing that appeared to trade at roughly 1.5x profit.
The drone company did about $2 million in trailing revenue and a little over $1 million in trailing profit, and sold for $8 million.
The hosts inferred the deal likely reflected strategic value, patents, and government-contract momentum.
The LinkedIn automation SaaS did about $2.4 million in trailing revenue and $1.64 million in trailing profit, with roughly $300,000 raised.
The conversation used the listing to compare SaaS multiples in a softening market.
The SMS Shopify app showed about $149,000 in its most recently closed month, $109,000 in profit that month, and $1.5 million in annual recurring revenue.
The hosts used those figures to infer a run-rate business with unusually high margins.
The SMS app sold for $6.3 million.
Andrew confirmed the close price after the hosts estimated a multiple in the six-to-eight times range.
The cartoon portrait business did about $2.26 million in trailing revenue and $485,000 in trailing profit, and sold for $2.2 million.
The hosts compared its multiple to the Shopify app and were surprised it cleared roughly five to six times profit.
The procurement and purchase-order SaaS had about $1.5 million in trailing revenue, $561,720 in trailing profit, and 307 customers.
Andrew used those metrics to frame the largest acquisition discussed on the episode.
That procurement SaaS sold for about $11 million.
The hosts identified it as a strategic buyer deal and estimated it at roughly 22x profit.
Favor businesses with sticky workflow integration over businesses whose economics depend mainly on paid acquisition.
Why: Installed customer behavior and switching costs make revenue more durable than pure ad-driven demand.
Separate financial-buyer value from strategic-buyer value before judging a listing.
Why: A business that looks expensive on EBITDA can still be rational if it fills a product gap or creates cross-sell opportunities.
Treat drop-shipping businesses as structurally different from branded inventory businesses.
Why: You may be buying supplier access and fulfillment coordination rather than brand equity or defensible product economics.
When a software-like business is built on commodity components, dig into distribution before worrying about code quality.
Why: The moat is often channel presence, reviews, and customer lock-in rather than technical exclusivity.
Track whether a market is attracting roll-up capital before you assume multiples are static.
Why: Incoming specialized buyers can reprice an entire category upward.
Bill said he listed a small side-project SaaS and went from posting to money in the bank in 11 days. He noted that Andrew pushed him to double his asking price, and the business still found a buyer quickly.
Lesson: In some software markets, underpricing can leave a lot of value on the table because buyer demand is deeper than founders expect.
The hosts worked through how a simple SMS app could generate over a million dollars of annualized profit while running on commodity infrastructure like AWS and Twilio. The perceived moat came from installed workflows, not code.
Lesson: Recurring revenue plus workflow lock-in can make a straightforward product look much more defensible than its tech stack suggests.