THE MARKETPLACE PARADOX: Why More Listings Are Creating Less Deal Flow

At first glance, the top acquisition marketplaces appear to be thriving. BizBuySell hosts roughly 65,000 annual listings, with 40,000–45,000 active postings at any given time. Flippa adds approximately 3,000 new digital-asset listings monthly. Acquire.com features over 2,200 active startup opportunities. Collectively, these platforms reach millions of users each month and promote accessibility in small-business ownership.

But a critical metric exposes a deeper issue: conversion rates remain persistently low, despite sustained growth.

Note: Conversion estimates are approximate and based on publicly disclosed transaction volumes versus listing counts. These figures assume listings are actively marketed during the measurement period and do not account for off-platform sales or withdrawn listings. Actual conversion rates vary significantly by deal size, asset quality, and platform vetting standards.

BizBuySell's conversion rate in the mid-teens has shown little movement despite platform enhancements. Flippa's higher ratio reflects its concentration in lower-ticket digital assets where due diligence requirements are less intensive. Across platforms, transaction velocity hasn't meaningfully improved alongside user growth.

The pattern is clear: marketplace scale is not translating into proportional deal efficiency.

Scaling listings doesn't linearly scale transactions. Four structural forces explain why.

Research on consumer decision-making has established that excessive choice can reduce decision quality and satisfaction. On high-volume platforms, buyers face a similar challenge: abundance can breed paralysis. Many prospective acquirers report spending disproportionate time filtering irrelevant or duplicative listings before identifying viable opportunities.

In a recent Evermark survey of active SMB buyers, this friction was quantified. When asked about their preference, 57% chose "fewer listings with more detailed information" over "many listings offering a wide range of choices". This preference reveals a fundamental tension: platforms optimize for inventory scale while buyers increasingly value depth over breadth.

The filtering burden is measurable. Survey respondents reported reviewing between 1-50 listings in the prior month, yet only 51% contacted sellers about 1-2 opportunities and 9% contacted no sellers at all. This suggests a conversion funnel where the vast majority of listing views don't progress to meaningful engagement—a pattern consistent with information overload dynamics.

Flippa itself has acknowledged this challenge in public communications, noting that high listing volume can overwhelm users attempting to identify relevant opportunities. When approximately two-thirds of Flippa listings are priced below $50,000—predominantly representing side projects or microbusinesses—serious acquirers seeking established revenue-generating businesses must sift through extensive inventory that doesn't match their criteria.

Open-marketplace models prioritize accessibility, which inherently reduces entry barriers. BizBuySell, Flippa, and Acquire.com allow sellers to list with minimal upfront verification—typically no standardized financial audit, limited identity validation, and self-reported valuations.

Platform terms of service consistently disclaim responsibility for validating listing information, placing verification burden on buyers. This structure extends due diligence cycles and increases acquisition costs.

Acquire.com's open model, for instance, permits pre-revenue startups to list alongside established revenue-generating firms. While this approach expands seller access, it creates quality heterogeneity that buyers must navigate—a process requiring substantial time investment to separate legitimate opportunities from exploratory listings.

The gap between listed and sold inventory reveals substantial inventory that doesn't convert. BizBuySell's approximately 65,000 annual listings versus roughly 9,000-10,000 reported closings suggests that a significant majority of businesses fail to transact within the typical listing period.

Some listings eventually sell through other channels. Many represent sellers exploring market interest without firm commitment to transact. Evermark’s survey data reveals the practical impact on buyers: 66% report that sellers "sometimes" fail to respond within 5 business days, while an additional 14% say this happens "often." Only 17% characterize seller responsiveness as reliable.

This response pattern creates information asymmetry: distinguishing between active, motivated sellers and exploratory listings requires additional due diligence effort that extends sourcing timelines. For buyers, this means wasted time contacting inactive or unserious sellers, inflating sourcing costs and contributing to decision fatigue.

Most major marketplaces don't confirm revenue claims, verify ownership documentation, or validate operational details until late-stage negotiations—if at all. Buyers must independently verify basic business fundamentals that could potentially be standardized or pre-screened by platforms.

When surveyed buyers were asked which verification steps would most increase their confidence in listings, the rankings were clear:

Buyers prioritize financial verification and identity confirmation—precisely the areas where most open marketplaces provide minimal oversight. This gap between buyer needs and platform capabilities explains why 60% of surveyed buyers spend 2-5 hours per week browsing or vetting listings, with an additional 20% spending 6-10 hours. This represents substantial time investment before meaningful due diligence even begins. This gap between buyer needs and platform capabilities explains why 60% of surveyed buyers spend 2-5 hours per week browsing or vetting listings, with an additional 20% spending 6-10 hours. This represents substantial time investment before meaningful due diligence even begins.

Search fund operators and acquisition professionals report that this verification work represents a substantial portion of early-stage due diligence. Across multiple prospective acquisitions, these verification requirements compound, materially affecting sourcing efficiency and timeline to close.

Marketplace friction creates measurable economic consequences across the acquisition process.

Extended Sourcing Timelines: Buyers report reviewing hundreds of listings to identify a small subset of actionable targets. Survey data shows that in a typical month, buyers review between 1-50 listings yet contact sellers about only 1-2 opportunities on average. This 50:1 to 25:1 filtering ratio—before formal due diligence begins—can consume 40-100 hours depending on target criteria and marketplace efficiency.

Higher Acquisition Costs: Extended sourcing cycles delay capital deployment and increase time-to-close, thereby compressing fund returns. Search fund operators report that marketplace friction extends acquisition timelines by weeks or months, directly impacting IRR calculations and opportunity costs on committed capital.

Compressed Deal Economics: Time spent on filtering and verification reduces available bandwidth for operational improvement planning and post-acquisition value creation—directly affecting expected returns and extending value realization timelines.

Sophisticated acquirers are adapting their sourcing strategies in response to marketplace dynamics.

Market data shows bifurcation by transaction size. Flippa reported 40% year-over-year growth in transactions above $100,000, though these represent a minority of total platform volume. This pattern suggests that higher-budget buyers are increasingly selective about sourcing channels, often gravitating toward more specialized platforms or direct relationships.

Survey data from active buyers reveals a striking concentration in platform usage: 83% use BizBuySell, followed by 51% using Acquire.com. By comparison, niche platforms show significantly lower penetration—DealStream (11%), OffDeal (6%)—while only 3% report using Axial.

This distribution pattern is particularly telling. Axial, as a curated, invite-only platform, remains largely inaccessible to individual searchers and smaller funds. The 97% non-usage rate suggests a substantial gap between open marketplaces (which dominate individual buyer activity) and institutional-grade platforms (which remain concentrated among established PE firms and larger search funds). This bifurcation reinforces the market segmentation hypothesis: deal sourcing is stratifying by both transaction size and buyer sophistication, with mid-tier acquirers potentially underserved by existing platform options.

Platforms emphasizing quality over quantity—including Empire Flippers, FE International, and Investors Club—maintain substantially smaller active inventories (often fewer than 100 listings) but report higher buyer satisfaction and faster transaction cycles. While conversion data remains proprietary, these platforms compete primarily on vetting rigor rather than listing volume.

Search fund managers consistently report reduced filtering time on curated platforms—often 50-70% faster initial screening despite smaller inventories—though these efficiencies come with higher transaction fees (typically 5-10% versus 2-3% for open platforms).

Contrary to early predictions about marketplace disintermediation, business brokers remain active participants in SMB M&A. Their value proposition has evolved: brokers now compete less on exclusive inventory access and more on deal filtering, verification, and transaction management expertise.

This dynamic is particularly evident in the $500,000-$5,000,000 transaction range, where deal complexity and due diligence requirements create value for experienced intermediaries who can pre-screen opportunities and facilitate negotiations.

Major marketplaces are introducing selective friction to address quality concerns:

Meanwhile, a new cohort of platforms is emerging with alternative approaches to the marketplace problem:

These interventions—from both established players and new entrants—represent implicit acknowledgment that pure scale without quality control creates diminishing returns. The industry is experimenting with hybrid models: combining open-access listing mechanisms with selective curation, verification layers, and transaction support services. The strategic question remains whether existing platforms can successfully retrofit quality controls, or whether purpose-built platforms with curation-first architectures will capture market share.

Buyers can improve sourcing efficiency through disciplined channel selection and due diligence protocols.

1. Evaluate Platform Conversion Transparency

When assessing marketplaces, inquire about transaction close rates and average time-to-sale. Platforms that can't provide these metrics likely prioritize user growth over transaction outcomes.

2. Filter by Verification Status

Prioritize listings with verified financial documentation, confirmed ownership, and complete operational disclosure. While this reduces initial pipeline size, it substantially accelerates downstream due diligence.

3. Implement Multi-Channel Sourcing

Rather than relying exclusively on single platforms, successful acquirers typically combine:

This layered approach captures market breadth while maintaining deal quality.

4. Distinguish Active from Exploratory Listings

Indicators of serious sellers include recent listing dates, realistic pricing relative to comparable sales, and complete financial documentation. Older listings with unchanged pricing or incomplete disclosure often signal exploratory market testing rather than committed sale processes.

5. Quantify True Sourcing Costs

Account for time investment as capital cost. If initial marketplace filtering requires 80-100 hours to identify one viable acquisition target, the effective sourcing cost substantially exceeds posted transaction fees. This calculation should inform channel selection and acquisition strategy.

Observable trends suggest the marketplace landscape is stratifying along economic and operational lines:

Emerging platforms using algorithmic filtering and off-market discovery represent a potential middle path: leveraging technology to surface relevant opportunities without accumulating massive public inventories. This model addresses marketplace inefficiency by prioritizing relevance over raw volume.

The strategic implication: sourcing efficiency increasingly rewards specialization over scale. Acquirers who develop trusted broker networks, proprietary sourcing channels, or curated platform access will likely achieve faster transactions and lower frictional costs than those relying exclusively on open marketplaces.

The data reveal a persistent paradox: marketplace growth has not produced proportional improvement in deal efficiency.

More listings have not correlated with better transaction outcomes.

For dealmakers, this reality demands strategic adjustment. Success in SMB acquisition increasingly depends on:

In acquisitions as in capital markets broadly, efficiency compounds faster than exposure. The optimal 2025 strategy prioritizes focused sourcing, verified pipelines, and decisive deployment over exhaustive marketplace coverage.

The winning approach isn't browsing more listings—it's filtering better ones.

This research was conducted by Evermark, a platform focused on improving deal quality and efficiency in the SMB acquisition market. Our ongoing research tracks marketplace performance, conversion dynamics, and buyer sourcing strategies across major platforms.

The insights presented here draw from publicly available platform data, proprietary survey research of active SMB buyers (n=35), and analysis of transaction patterns across the lower-middle-market M&A landscape.

Methodology Note: Survey respondents were recruited from active SMB buyer communities and represent individuals currently searching for acquisition opportunities. Response data was collected in October 2025 and reflects current marketplace experiences and preferences.

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The SMB acquisition ecosystem continues evolving rapidly. Platform dynamics, conversion patterns, and sourcing strategies shift as marketplaces mature and buyer behavior adapts. We track these trends to help acquirers make more informed sourcing decisions.