I've combed through countless reports on the state of online business deals across various marketplaces to bring you the insights that matter.

Below is an analysis of online business trends over the past few years compiled using deal data from major business marketplaces like Empire Flippers, Flippa, Boopos, and more. It is not all-inclusive but gives a good look at where we have been and where we we enter 2024.

🔑 Takeaways

Online business deals have been rising consistently

  • The year 2021 saw a major outlier in the dollar amount of deals being done due to factors related to COVID, but despite that, we still see 2022 above 2020 levels as we mean-revert to the baseline trend.

  • Consistent increase in buyers messaging sellers on Flippa

  • As you might expect, larger deals are more likely to be done by companies, while smaller deals are more likely to be completed by side hustlers and solo entrepreneurs.

    • My Take: The middle ground deal size of $150K-$750K is where you can find deals that are not overly crowded by sophisticated companies or private equity buyers (the deal size is too small to move the needle), and where you can gain an edge over the average individual by learning the ins and outs of what makes a great deal.

Sellers are still stuck in the past - 2021 valuations were elevated due to one-off factors related to COVID, and we see a reluctance to move on from those peak values. This can be seen in fewer deals getting done and longer time on the market.

  • 2023 was a buyer's market, and I think sellers will need to continue to be flexible with terms to get deals done in 2024

  • We can see the number of deals that included an earn-out has fluctuated slightly upward

How does business model impact SDE Multiple?

  • SaaS and subscription maintains the strongest multiples of the group as recurring revenue reigns supreme

  • E-comm and FBA multiples declined slightly, facing challenges such as fee hikes, supply chain issues and the aggregator bubble bursting

This is not slowing down the growth of general E-commerce as we will make about 20% of retail purchases online (expected to increase to 25% by 2026)

The Emergence of social commerce:

  • 2023 saw the emergence of tiktok shop as another social media commerce site and the trend is only going to continue - being the first to jump on these trends can yield awesome results

How does deal size dictate multiples?

Let’s take a look at the table below

  • As we can see smaller deals deserve small valuations (pretty straightforward)

    • My Take: There are many outliers and each deal is unique so I wouldn’t get too caught up on an exact multiple for the business model until you have analyzed what the advantages and disadvantages of the particular business are

Does Age Matter for Multiple?


  • It is important to consider stability, longevity and historical performance of a company but it is certainly not the only factor - many things can change going forward and the most important thing to mitigate risk is to consider all of those potentialities

Diving deeper into subscription and SaaS

  • We see an interesting bucking of the trend in midsized deals (500k-1M) showing amazing strength and a 1.6 increase in multiple while small (100k-500k) and large (1M+) market valuations both declined

Let’s look further into the revenue, cost of goods sold (COGS), Total Advertising Cost of Sales (TACoS), and Profitability for this group of SaaS and subscription businesses

Median Revenue Growth:

  • We see a large range here - topping out in Q2 2022 and trending down for most of 2023

  • The average median growth rate over the entire period was 20.85% which lines up close to the 22% seen by public SaaS companies over the same time

Below we can see more granular detail

  • The most common growth rate falls between 0% and 50% and 10-20% being the peak

  • Very high growth rates are harder to come by (duh doy)

  • There is a decently large segment of business with negative growth pointing to challenges and competitive pressures


  • COGS shows a serious increase over the period which should probably come as no surprise to anyone following general conditions - inflation was rampant

  • Prices rose in relation to APIs, cloud computing infrastructure and AI accelerators

Below we can see more granular detail

  • Most companies kept COGS below 30% but it’s likely that physical product subscription companies struggled a lot more

TACoS 🌮 No not those tacos! (Total Advertising Cost of Sale)

TACos as a metric reveals the portion of revenue dedicated to advertising, providing insights into the efficiency and impact of ad strategies

  • Q4 indicates higher competition for ad space with the holiday season (Black Friday + Cyber Monday)

Below we can see more granular detail

  • Most companies were able to keep TACoS under 10% - indicating strong organic reach or high ROAS (return on ad spend)

  • Higher TACoS are rare but may indicate more competitive markets or aggressive ad investment aimed at high growth or capturing market share

Let’s get to the good stuff - Profit Margin

  • Despite the upward pressure on COGS and TACoS, profit margins have remained strong, suggesting that (just as we’ve surely noticed) companies have been successful in passing increased costs onto customers

  • This indicated a healthy pricing strategy and value proposition

Below we can see more granular detail

  • Most margins are concentrated between 40%-90%, which aligns with expectations for SaaS

  • This reaffirms the competitive advantage of subscription and SaaS models in maintaining profitability and higher multiples vs ECOM and FBA business models

Online Business Deals are International

  • Owing to the location independent nature of online business we can see transactions between counter-parties that represent many different countries

  • The world is open to explore buying and selling online businesses

What to look for in 2024?

To find the best deal we want to weight the following factors:

Revenue Growth: Slow and steady wins the race here - we don’t necessarily want to see parabolic growth because it may quickly reverse and peak out

COGS: Optimizing COGS without sacrificing quality is key

TACoS: We want to see a balanced ad spend that efficiently drives growth while maintaining a healthy ratio to revenue

Customer Acquisition Rates: Ideally we will see an accelerating pace of customer acquisition, indicating a growing market presence and product acceptance

Churn: The higher the customer retention rates the better indication of product-market fit

Profit Margins: The higher the better - the ability to turn revenue into profit at a highly efficient rate indicates financial health and long-term viability

If you would like any help in finding and evaluating a business to buy in 2024 I would love to work with you