Great questions. Let me address them:

1) The rationale behind the reverse auction isn't 100% profit based. It's the best combination of being able to be transparent (for a good case study) combined with the ability to get a good value.

The reverse auction actually prevents people from waiting until the last minute because it creates scarcity. The moment someone places a bid, the store is off the market. So for people who really are interested, they only get one chance.

2) Small eCommerce business like this usually sell for 2-3x sellers discretionary earnings, which is a term for net income with a usual exclusion for one full-time salary. The fact that a full-time salary isn't included is part of the reason they sell for a smaller multiple.

From the original post:

Currently, my operations manager, Pat, runs the day-to-day operations. He works part time and spends up to two hours per day running the operations of TrollingMotors.net. For more details on exactly what he does, please see the section on Operational Responsibilities.

When calculating seller’s discretionary earnings (i.e., income) for small eCommerce businesses of this size, wages for one person (often the owner) are usually not deducted. Given that Pat and my combined operational workload for the business is less than 15 hours per week, I didn’t include any labor costs per this normal exclusion in calculating seller’s discretionary income.

However, I realize that most people (myself included if I were you!) would want to see the financials including payments to an employee. That’s why I’ve listed below how paying an employee would impact the bottom line. This is the anticipated cash flow assuming someone else was running the day-to-day operations of the business, effectively putting the operational aspects of the business on complete autopilot.

Cost for employee wages is $15,000 / year (assuming $50,000 full-time salary paid at two hours per day), reducing the net income to $50,000 from $65,000.

You mentioned it can barely sustain one person which, if this all they did all day, may be true (depending on where you live). But the operational time involved with running the business is 2 hours per day, which leaves a lot of time to do other things. Most of the existing work has been done (website development, supplier relationships, etc) and the product line doesn't change much so the website doesn't need to be updated frequently.

Two hours a day can seem really low, especially from the perspective of the seller as I obviously have a conflict of interest. That's why I added real data points to the workload required for operations. Over the last year, averages are:

- 3 email tickets per day
- 4 phone calls per day
- Average call time of 8 minutes)

...plus some work at the beginning of the year to retrofit the website for the 20 to 30 new models that come out.

If you tried to take out a $150,000 full-time salary for someone out of the business, it obviously wouldn't make sense. But for someone who wants to get into eCommerce with a minimal amount of day-to-day work and quickly get a lifestyle business into their life, it's a much better fit.

Hope this helps clear things up, and let me know if I can answer any follow up questions. And glad you liked the traffic -> revenue chart! I think it's much more useful than simply traffic stats alone. :-)