E559: Is It Better to Sell or Hold Onto Your E-Commerce Business in 2024?

Dave and I discuss the reasons why e-commerce valuations have significantly decreased this year, Mike's run at the World Series of Poker event, and the potential valuation of content websites. 

Today's episode is sponsored by Clearco, a company that provides ecommerce businesses with working capital to fund inventory, marketing, shipping and logistics, and more! Check them out today! 

It's been almost a year since I last sold off one of my e-commerce businesses. 

Since then, a lot has changed.

Amazon's new fees were implemented, interest rates have skyrocketed, and FBA Aggregators are few and far between. 

I invited Dave over today to discuss how Amazon may or may not have had a hand in directly affecting the valuations of e-commerce businesses, and why the market hasn't recovered from 2 years ago. Here are some of the big takeaways from this episode: 

The Big Takeaways

• E-commerce valuations have decreased mainly due to the uncertainty caused by Amazon's fees and policies. Who knows when Amazon will come out with more fees that'll impact profitability? 
• Google's latest algorithm update has hit a LOT of content websites, leading to decreased traffic for everyone involved which directly impact its valuations. 
• If your e-commerce business is sold at a 2x multiple, it might not be enough for you to retire. Wouldn't it be better to hold onto your business instead? 

Timestamps

• 00:00 – Introduction and Sponsor
• 02:56 – Mike's Run at the World Series of Poker
• 08:13 – E-commerce Valuations
• 20:07 – Valuations for FBA Businesses
• 21:06 – Valuations for Off-Amazon Brands
• 22:01 – Uncertainty in Content Site Valuations
• 28:14 – Decision to Hold onto a Profitable Business
• 31:08 – Dave's Funny Story 
• 34:21 – eBay's Attempt to Change

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Thanks for listening!

Until next time, happy selling!