Selling Overstock.com (Dumpster Fire King) for $500m

🧠 The Takeaways

Today we’re buying Overstock.com to flip it to a loan provider for $500m because there’s no value in Flash sale sites.

1. Immediately install Zero Based Budgeting to stop the insane spending.

2. Kill the Flash sale sites.

3. Harvest as much consumer data as possible.

+ Why you need a year to exit your biz

LBAB! Community - Take 12 months to prep an exit.

Founders ask me all the time: “I want to sell my biz—how long should I expect the process to take?”

Answer: It can be as short as 2-3 months if you want to move really quickly, but honestly, those deals are usually dumps at incredibly low valuations.

If you want to get a strong multiple and have a smooth transition process, I recommend taking 12 months to get the biz properly ready.

Why 12 mos?

Because there’s a laundry list of items to prep your biz to sell. 

Here are the ones that take the most time:

1. Cleaning up your Financials (P&L/Balance Sheet).

2. Ripping out unnecessary costs to increase EBITDA.

3. Creating process/SOPs. (Training the team to take over.)

4. Getting enough data on the new growth tests to show proof points.

5. Grow into Expectations.

Most founders I talk to think their multiples are going to be much higher than they will realistically be at close.

eCom bizs trade at a multiple of Net Income/EBITDA. Increasing your Rev + reducing costs to get your Net Income as high as possible takes time if you want to do it right.

Also, Acquirers want to see consistent trends over time. Not violent changes in 6 weeks.

Let’s Examine This Biz

Note: As always, none of what follows is legal, tax, investing, financial, or any other sort of advice. And I was never here.

Overstock.com ($BYON), owners of Overstock.com, Bed, Bath, and Beyond and Buy Buy Baby, the original “buy products nobody wants online for incredibly cheap” is dying a slow death because no one can make money reselling unwanted inventory online.

• Share price: $4

• Market Cap: $230m

• L5 Performance: -66%

• P/E Ratio: N/A

Temu and Shein ravaged this biz. Just because De Minimis went away doesn’t mean this biz has a chance in hell at making money again.

Financial Summary

TLDR Analysis: Cooked

• Sales fell for the 4th year in a row. 😰

• OPEX of $481m on a Gross Profit $290m. 🤮

• They lost 16% less money than the year before…

This is one of those Frankestein’d roll ups that sounds great in a boardroom after some excel jockeys run some numbers, but obviously, smushing 3 failing bizs all in the same category that essentially did the same thing was never going to work.

I’m just shocked it’s still running, and they haven’t sold this off yet.

Let’s Fix This Biz

Here are my 3 moves to tear apart Overstock’s garbage roll-up and make $500m.

1) Zero-Based Budgeting

How on God’s green earth are they spending $353m/yr on Selling, Marketing, and Tech?

I want someone to explain to me how a biz that is acquiring multiple discount retail platforms to consolidate backends and (supposedly) increase profits through scaled efficiencies is spending 120% of its Gross Margin on admin, marketing, and the tech stack.

The 1st thing we’re doing is installing Zero Based Budgeting (ZBB):

1. Everyone’s annual budget goes to $0.

2. Every $ someone wants to spend has to justify it to the exec committee.

3. Anything that doesn’t pass the 90-day review doesn’t get turned back on.

Here’s a great ex. of why this is needed. Look at their ecom platforms:

1. Overstock.com: Shopify

2. BedBathandbeyond.com: Custom cart

3. Buybuybaby.bedbathandbeyond.com: Custom cart (I’m not joking. This is the URL for Buy Buy Baby.)

Someone is absolutely getting fired for this clusterf***.

ZBB exposes the mess and where the biz needs to streamline / make smarter decisions.

Takeaway: When the system is a dying mess. Restart from scratch and build back up what makes sense.

2) Kill the Flash Sales Biz

I can’t believe I need to say this in 2025, but don’t run a 100% Flash sales-focused biz.

The fact they’re running TWO Flash Sales sites (Overstock + Bed Bath & Beyond) gives me 0 faith that the current management has any idea what they’re doing.

The graveyard of Flash sales sites that have gone bankrupt over the years is too long to list. 

Even the straight-from-manufacturing-cheap-products bizs are struggling. Aka Flash Sale sites 2.0.

I’d hope buried somewhere in here is an interesting piece of inventory and vendor management software that we could either SaaS-ify or sell off to someone who could properly monetize it.

Otherwise, the only interesting element buried in the carnage of this Frankenbiz is also the most neglected: Buy Buy Baby. 

There might be some salvage play here to get Bed Bath & Beyond + Overstock into the Home & Apparel industries respectively. 

But I’m not holding my breath.

Takeaway: Don’t move sideways into the quicksand industry.

3) Tap the Consumer data. Become a Loan middleman.

The ONLY smart thing that Beyond Corp (🤮🤮🤮) is doing is taking their ~30m active customer profiles and creating “services” around them.

I’m not confident consumers will pay $19.95/yr to get special discounts from Bed, Bath & Beyond.com, but I do believe that they would for shipping/warranty Protection or to take out a home improvement loan to fix up their house.

Why does it make sense for the biz that throws incredibly deep discounts on meh home goods/clothing to sling home improvement loans?

Because they have the customer at the right moment in their buying journey. Buying from one of these platforms is an incredible signal of:

1. The type of customer.

2. Where they are in life.

3. Their financial situation.

Banks/debt providers will pay through the nose for the data, and if Beyond (🤢) can connect those customers, they will provide more value then selling unwanted products at 52% off.

Takeaway: Become a loan data biz.

Final Thought

My long shot here: Sell the whole biz to a BNPL/Debt provider.

The nightmare of operating a flash sale biz to collect consumer data to ID micro-loan candidates sounds like something that would make me lose my hair all over again.

The data of ~30m active profile is worth a heck of a lot more than $500m to an Affirm or Klarna (who spend that on Marketing every year).

The real pull-a-rabbit-out-of-a-hat magic will be convincing a BNPL to inherit these platforms and merge them into a BNPL marketplace. Instead of discount death spiral and micro-loan platform wannabe.

This acquisition would be a rounding error for either BNPL (both worth $15B). 

It’d give them some of the most valuable domains on the internet and established buying relationships with some of the largest Consumer brands in the world.

But most importantly.

There'd be ~30m more customers looking for financial help to sell loans + credit cards to.