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Facts and Figures
|Month||January 2019||February 2019||March 2019|
The business started in 2001 as an online consumer electronics e-tailer. Over time, the owner transitioned the sales to B2B as he found less competition and increased cart values. Sales come primarily through two websites, with the remaining 45% via Amazon – a combination of FBA and FBM. Roughly 20% of sales come from private labeled products, which offer incredible margins of 120%. The primary customer base is made up of government & law enforcement, health clubs, medical services, schools, and religious organizations.
Trailing Twelve Months Sales are $1.18M Gross, with $226k SDE. The owner and his wife combined spend less than 45 hours per week on the store. The business is home operated, without the need to carry a large inventory, and easily transferable.
How does your business make money?
The store has a diversified product mix of drop ship and private label products with positive reviews for both the store as a whole and the individual products.
Why should someone buy this business?
The store has a track record of 18 years of success and domain authority. There are incredible opportunities to expand through paid advertising, email marketing, and growing the private label business. Having seasoned contracts in the electronics market is extremely rare and hard to come by. These contracts can be used to leverage greater sales on the website, Amazon, and other marketplaces.
How can the future owner improve this business?
Optimize / Manage advertising campaigns. We have done this all in house and as we grew and as advertising changed we have fallen completely behind the times. We have done little to no optimization or updating. In fact I recently had an advertising company (well respected in the industry) do a free analysis and they said this quote “Overall, the easiest way to put this is that you were basically not even doing AdWords – it was all done so poorly that you might as well consider it the opposite of doing AdWords! There are a lot of areas where you have a pulse – and we can scale this account quite a bit once we begin to address the glaringly obvious issues, incorporate a better structure, and start using the full spectrum of high performance levers available in AdWords.” We have cut advertising by 50% in the past year because we felt we were managing it poorly and didn’t get around to fixing the issues.
Why are you selling this business?I have been doing this same business for about 18 years. It has been a great business for my family and I over the years but I have reached a point in my life where I am ready for a different experience.
- Evergreen Niche
- High Profit Margins
- Lots of Repeat Customers
- Low Time Commitment Required
- Turn-key Operations
Opportunities for a new owner
- Launch New Products
- Capitalise on the Emerging Market
- Improve Current Marketing Efforts
Customer service is handled by the seller and his wife. They have an online support form and toll free number that customers can use to contact. They currently are getting a few calls a day as well as a few emails from our online contact form. The Amazon part of the business has relatively low customer inquiries and Amazon handles issues related to their fulfillment of orders.
Suppliers drop ship most of the products. The seller OEM some pan/tilt/zoom video cameras and ptz joystick controllers from China. These units are stored and shipped by the seller. There is an outside contractor who builds some cable assemblies for us. We stock and ship these items as well. We are set up with Amazon to act as our fulfillment company as needed. We use this when we are traveling or on vacation to fill orders as needed.
Inventory amount ranged from $42,000 – $64,000 in 2018. The inventory will be sold at the time of the business sale to the new owner separate from the business purchase price. We will only transfer sellable inventory that is under 12 months old.
All inventory kept at seller's house or at Amazon.
We use Miva for our ecommerce platform and it is hosted by Metisentry on a month to month basis (no long contract).
We have a few proprietary branded products that have our own customized firmware. We have an agreement with the factory on exclusivity of product (can’t sell same color/same model in USA and we have customized firmware with the functionality we have designed/requested). We do not have trademarks or patents. We have also created unique bundles of products that we have yet to see anyone else offering in the same manner. This allows for some exclusivity and makes it difficult for customers to price compare the system as it isn’t apples to apples with anything else.
Multiple sales platforms of our own websites and Amazon (get in front of different customer types). By selling on Amazon and our own sites we have blanketed a significant part of sales channels for our products. Some of our competition is not on Amazon (they refuse to join the giant), and some of our competition is only on Amazon (With no or little effort on a website of their own). We have developed both.
Both self fulfilled and drop-shipped products (huge availability of products with low overhead). Some of our competition doesn’t drop ship and so items they don’t physically have in stock are listed as out of stock (or ships in 7 days). Our drop ship model allows us to list products in stock that we haven’t had to physically inventory. That means much less capital investment required compared to other stock businesses. We do stock some products, the majority being our private labeled products. However these suppliers have been great to work with in that they do not require large minimum orders and often can provide extremely quick shipping when needed. For example, our camera supplier has not given us any minimum order requirement (I usually order 8 to 12 cameras at a time) and they can typically ship our product in about a week from order. They ship by DHL or FedEx Express for free to our location. So we have our product (shipped for free) within about 3 to 4 days from the time it is shipped.
In 2018 we did about $587,847 on Amazon and about $700,923 from our own two websites.
In 2018 we did about $267,269 in our own branded products (cameras, controllers, cables, camera mounts) at about 120% margins.
For 2018 from Google Analytics:
36.9% Organic Search, 34.5% Paid Search, 23.6% Direct, 4.5% Referral, .4% Social
$1.18m Gross Revenue
$226k SDE (Seller Discretionary Earnings)
- Contracts (written or verbal) with customers and suppliers
- Customer databases
- Inventory on hand or on order at the time of closing
- Toll-free numbers
- e-Commerce platform accounts
Post sale support
This is support provided by the seller when transitioning the business to a buyer.