15 Year Established eCommerce Online Business in Tea Niche with High Margins and Average Order Value

Asking Price:
$160,000
Sales:
$109,732
Profit:
$47,731
Year Established:
2007
Multiplier:
3.35x

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A Seller Force offering, this eCommerce business has done exceptionally well establishing a loyal customer base for its online authentic Chinese teas and tea accessories, by introducing their products to a largely Australian customer base for both retail and wholesale. With more than 530 products to offer, including 60 tea products in more than 12 categories, this business has found creative ways to entice tea lovers to their site.

This is an enormously profitable industry the company is operating within. The global tea market is valued atMost of their products are packaged and sold under their brand name, including some of the tea cakes they sell, and their long standing and trusted relationships with their suppliers have given the company the ability to quickly ship and deliver their SKUs.

$12.63 billion and projected to continue growing by 5.5% through 2025. As one of the most popular beverages in the world, tea remains highly evergreen and is also popular for having health benefits that include boosting the immune system, strengthening bones and teeth, and controlling blood cholesterol levels. Tea, quite simply, continues to be a product in high demand throughout the world.

Initially, the company launched in 2007 operated through a brick-and- mortar retail shop, but quickly saw their sales skyrocket once they made products available online. Their sales leads have come organically through searches on Google, and over time the company has cultivated a large base of loyal customers who now make up 20% of their order volume.This offering has some extensive scale options as well. Let’s take a closer look at how they built this strong foundation for success.

Their niche market from the start has been DTC sales for high quality Chinese teas and accessories rather than B2B sales to retailers, although they do have wholesale accounts as well.

With such a wide range of products, which include more than 400 tea accessories, their packaging and branding is unique and produced for the company by their suppliers. The company stocks locally but will drop ship as a service for large custom orders.

With an Average Order Value of $114, sales have remained healthy throughout the year, with peaks around Christmas and Mother’s Day, which are busy times for online retail in Australia, and during Chinese New Year when sales rise for Chinese direct customers living in Australia.

Their typical customer tends to be women between the ages of 24 and 35 with high incomes and who are not only tea enthusiasts but also health conscious. Among their male customers, they are often men who have visited China and are familiar with the quality of the tea brands made there.

Today, 20% of their orders come from repeat customers.The company also gets orders from Chinese customers, who now make up 20% of their overall sales, including wealthy buyers who place large orders on behalf of family and friends back in their native country.

The company is now averaging 5 shipments a day, and they reorder inventory every 3 months to keep up with demand. Their packaging includes branded cardboard tea canisters for tea.

Much of their success has been accomplished with a minimal marketing plan that has relied on ranking high in search engines thanks to their SEO program, which uses keywords and a blog to boost traffic to their website, and social media marketing.

This approach is working, with 70% of their web traffic coming from organic searches.

The company could certainly scale quickly through an expanded approach to their digital marketing, including using email marketing campaigns and a stronger investment in their social media presence.

Their B2B sales could increase substantially if the company put in a concerted effort toward marketing directly to retailers and wholesalers with related distribution channels.In the past, the company’s sales have increased once they made even a modest investment in online marketing.

The current ownership now focuses on tasks that include order fulfillment, product sourcing and shipment, negotiating with suppliers, marketing, and website support. The two owners do not have any employees although they have used temporary workers for busy shipment times and contractors for SEO purposes and web development.

The huge global marketing for tea products isn’t go away anytime soon, and this brand has succeeded by putting an emphasis on high quality products and using that to enhance their brand reputation. Their actions have been successful in attracting not just vibrant sales but a growing percentage of repeat buyers.

Contact Seller Force today to find out from our brokers how this offering represents a very wise long-term investment.

 

Listing ID: SF 63

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