Educational Toys Niche – Highly Automated – Strong YOY Growth

Asking Price:
$249,000
Sales:
$804,445
Profit:
$91,626
Year Established:
2020
Multiplier:
2.7x

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SellerForce® presents a growing brand in the online eCommerce market – specifically in the kid’s educational niche. Global eCommerce has snowballed over the last five years, and since the onset of COVID-19, the entire online landscape has evolved and leapfrogged exponentially.

The global educational toys market is projected to grow substantially in the forthcoming years. The growth can be attributed to the increasing adoption of Science, Technology, Engineering, and Math (STEM) toys by parents for their kids. The global market generated $68.81 billion in 2021 and is projected to rise to $132.62 billion by 2028, increasing at a 9.83% compound annual growth rate.

This brand is on a mission to inspire the next generation of innovators by offering products for kids that are fun, challenging, and designed to kickstart creativity and curiosity.

Furthermore, its products are designed to be fun and engaging, offering early childhood education, and inculcating problem-solving skills, which are perfect for growing minds. This aspect allows the products to sell all year round.

The company currently utilizes a DropShipping inventory model. However, this can easily transition into a hybrid or stock model as the supplier has warehouses in more than ten countries, including the United States. They can hold stock for the business in their warehouses based on specific requirements. Around 30 shipments are made daily from the supplier’s warehouses in China and the United States.

Lead generation has primarily been done through social media advertising, emails, and SMS marketing. Notably, the brand hit $1 million in sales in August. They hired an email marketing agency in September and generated $30,000 from email and SMS that same month. As a result, the returning customer rate has almost doubled post-September, due to implementing these marketing strategies.

Management astutely makes use of specific tactics to drive revenue. The majority of products are on sale. The company runs a monthly sale based on calendar events and scarcity marketing concepts like “Flash Sales.” This creates urgency for buyers who visit the website, leading to higher conversion rates. Additionally, A/B testing is done between different offers combined with sale campaigns to generate maximum income. The goal is to get the utmost sales by obtaining additional revenue from gross merchandise value using an effective combination of urgent sales and offers.

The Shopify-built website is easy to navigate and provides informative and intelligent information on each product. Beautiful images, discounts, easy checkout, fast load speeds, and multiple payment methods have all led to increased conversion rates. Overall, the quality and customer satisfaction are evident with thousands of 5-star reviews.

The typical customer is, unsurprisingly, parents, specifically moms. However, the brand differentiates from competitors by offering products for mothers with infants, and toddlers, all the way up to teenagers. This helps capture a larger market segment and differentiate the brand by providing a vast range of products for all age groups. 80% of customers are from the USA, with the remaining 20% from Canada, Australia, and the UK.

The owner spends 15 to 20 hours weekly on the business, focusing primarily on marketing and launching new products. Additional staff includes a customer support virtual assistant, a brand manager, a video editor and graphic designer, and an accountant. Projects such as web development and finding content-sourcing agencies are generally outsourced as once-off projects.

There is enormous scale potential for this business. Introducing more online courses for children of different ages would allow the company to acquire customers at a young age and offer classes at every age level, resulting in a high customer lifetime value. Bundling physical products like puzzles and educational toys with courses offers an incredibly profitable opportunity and have shown great success.

Additional methods to scale include becoming Omni Channel by actively selling on Google, TikTok, Pinterest, and Amazon. Furthermore, introducing airtight retargeting campaigns on social media platforms to capture customers who’ve shown interest in the products can increase conversion rates dramatically. Implementing solid SEO, a strong affiliate marketing program, and an ambassador program would assist in generating organic sales while expanding globally with focused marketing campaigns would undoubtedly reach a significant new audience.

Influencer marketing too presents an attractive prospect. The world has seen many types of influencers sprouting up, and “momfluencers” have been prominent in driving sales in this niche. These are influencers on social media who use visual storytelling to sell the idea of ‘motherhood,’ which includes their own experiences, personal interests, and, of course, favorite products. Mostly, they are so successful because of the aura of ‘mom knows best’ they carry with them. The brand can quickly implement this strategy with a high return on investment.

Contact SellerForce today to educate yourself about this exciting acquisition and its vast potential in the right hands.

Listing ID: SF104

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