At first glance, this business sounds pretty interesting.
It sells officially licensed NFL merchandise across Amazon, Walmart, eBay, and Shopify.
The listing claims approximately $518,000 in annual profit on $1.63 million in revenue.
And unlike many ecommerce businesses, it comes with a legitimate barrier to entry.
Getting approved to sell licensed NFL products is not easy.
That approval alone creates a moat that most Amazon sellers cannot replicate.
The NFL-approved Amazon account is probably the most valuable asset in the entire deal.
The business also includes roughly $1.2 million of inventory, a warehouse operation, multiple sales channels, and a customer database with more than 388,000 verified buyers.
On top of that, the business is described as semi-absentee with a Head of Oversight managing daily operations.
Those are all real advantages.
If someone wanted to expand into NCAA, MLB, or other licensed products, there may be genuine growth opportunities here.
The asking price is $4.55 million.
That works out to an 8.79x cash flow multiple.
For comparison, similar wholesale and distribution businesses typically sell around 2.7x cash flow.
That is an enormous premium.
The financing math gets even worse.
When we run the deal through SBA financing assumptions, the DSCR comes out to just 0.80.
That means the business does not generate enough cash flow to comfortably support the debt.
As a result, the buyer would need to bring roughly $2 million to the table.
That is a down payment of approximately 44%.
After all that, projected cash flow after debt is only about $104,000 per year.
Even if every number in the listing is accurate, the return profile simply is not attractive.
The projected cash-on-cash return is only about 5%.
The estimated payback period is nearly 20 years.
That is a very long time to recover over $2 million of invested capital.
Meanwhile, the buyer still has to manage licensing compliance, inventory forecasting, seasonality around NFL demand, and marketplace risks.
Those risks might be acceptable if the business were priced reasonably.
At nearly 9x cash flow, they become much harder to justify.
The NFL license is valuable.
The customer list is valuable.
The semi-absentee structure is valuable.
But valuation matters.
And at the current asking price, the financing simply does not work for most buyers.
BizHub scored this deal a 3.0 out of 10.
Interesting business. Very difficult deal.
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