SellerForce® presents a 5-year-old B2B brand that has been rapidly rolling towards success since they were first launched. Their product line, which consists of sturdy shopping cart replacement wheels, is a necessity for in-person retailers everywhere, which means that there is always a demand for the products that they supply.
Though most of the bigger names prefer to purchase from larger manufacturers, there are times when a small, quick order is needed, which is where this business shines. The company is highly evergreen, and as wheels can break down during any part of the year, they experience little to no seasonality. Though they manage their own official website and a storefront on eBay, the bulk of their sales come from their Amazon platform, which is responsible for an incredible 90% of their total revenue.
They have an Average Order Value of $100, which, coupled with their healthy 50% Repeat Order Rate, means that each customer is likely to bring in a decent amount of money in the long run. The loyalty and overall satisfaction of their customers with their products is also reflected in their average rating, which sits at about 4.8, as well as a valuable Amazon’s Choice badge on one of their key products.
Their reputation of providing sturdy, functional products within a shorter amount of time than larger manufacturers has led them to see rapid-fire growth. They enjoy 25% Net Margins, as well as an impressive YOY Net Profit Growth Rate of 84%. These statistics are especially noteworthy given the small scale of the business, which is run solely by the current owner of the business.
The owner also only requires about 8 hours per week as well, which they typically spend packing wheels and delivering them to the postal service for shipment. The simple structure of the business means that they can be run by buyers without any real Amazon experience, making for an ideal purchase for rookie and veteran entrepreneurs alike.
Their marketing campaign consists of a polished SEO strategy, which takes advantage of the useful keywords available when selling shopping cart wheels. This means that the company currently spends less than 4% of Net Sales on their advertising plan, which can either be maintained as is, or used as a fantastic scale opportunity by an enterprising buyer. An effective and low-cost strategy that they could explore post-acquisition would be to focus on better management of keywords, which would make both their SEO and PPC campaigns more effective in generating traffic.
As the company already has a monthly traffic volume of about 25,000, the buyer has an excellent jumping-off point to use for scaling purposes. If the buyer happens to have the capital to invest a significant amount into inventory, they could easily do so as well, which would let them make the switch to FBA from the FBM model that the company currently uses.
This would make shipping and inventory management more efficient, saving time and resources, and making for an improved customer experience. They could also see significant COGS saving by making a large order to a manufacturer, which would also lessen the risk of running low on inventory anytime soon.
If you’re interested in learning more about this acquisition, then our brokers at SellerForce wheel be happy to help you today.
Listing ID: SF180