Thoughts on Madokamodern.com Flippa auction

[TrustButVerify]

Just some thoughts about this particular auction that caught my attention from a gotcha point of view. I'm not saying this is a scammer, but just some points to think about.

This is a import business that sells modern style furniture.
https://flippa.com/2680485-no-reserv...annual-revenue

The site was up for sale previously and did not sell:
https://flippa.com/2660617-competiti...annual-revenue

The net profit looks great on this but here are some things that don't make sense.

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The business seems like it has a lot of moving parts that are not mentioned in the initial listing.

On the website it mentions that there is a "showroom" for you come and look at the furniture and as the auction progresses the seller mentions the fact they have a full blown warehouse and receive containers of goods directly from China. (Not exactly an internet business in my mind.)

A quick inspection reveals quite a few mixed reviews http://www.yelp.com/biz/madoka-modern-costa-mesa including people state they have been waiting months to receive their goods and their emails are not responded to.

Seller states in their listing that many goods are ordered from China and take 3 to 8 weeks of delivery yet there is no mention of this on their website when ordering.

The seller looks to the same seller who was recently suspended https://flippa.com/users/461109.

Odd that the seller has sold two previous websites under that account which sold for several thousands dollars each, but no feedback was left. Also has a recent login from outside the USA.

Seller displays a BBB logo on their homepage yet is not a member of the BBB.


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Auction is no over, selling for a buy it now of $85,000.

Thoughts on this auction?

[Clinton]

Those are well spotted risks!

The BIN seems to be a couple of months worth of turnover / a year's worth of profit. This reflects the fact that there are several "moving parts" and that this is not the purely internet business Flippa buyers are looking for.

I believe the sellers wasted their time in Flippa. If they had used a business broker and sold this on business website as a B&M business they'd have attracted buyers already in that industry and could have sold for at least double what they got in Flippa.

For someone like you looking for an internet business, I think you did the right thing to walk away.

[TrustButVerify]

Yeah, definitely not an internet business. I didn't have much issue believing their revenue numbers but it seemed like they were trying to hide how much work was involved to cater to the flippa crowd and as you stated Clinton, they should have simply sold to a B&M buyer on the West Coast (where shipments are received) who could have easily transitioned into the business. But that (alleged) net profit sure was tempting!