Business Overview

Seller is the largest, direct to consumer, direct mail CBD company in the US. It specializes in formulating, marketing and selling CBD nutritional supplements and nutraceutical products, derived from the hemp plant. With a 2021 run rate of $8.5 million in gross sales, over 250,000 unique customers and over 500,000 orders, it stands apart from the competition. The product portfolio includes tinctures, capsules, soft gels, topical products and gummy products. Seller’s product base focuses on non-THC hemp products such as CBD, CBG and CBN and not Delta 8. All products are sold via direct-mail, call centers and print advertising. Using disciplined customer acquisition practices and comprehensive product formulation testing methodologies, which have driven strong, high average repeat order sales, the Company has become one of the largest CBD companies in the US. NDA and POF required.

Financial

  • Asking Price: $2,999,000
  • Cash Flow: N/A
  • Gross Revenue: $8,500,000
  • EBITDA: N/A
  • FF&E: N/A
  • Inventory: N/A
  • Inventory Included: N/A
  • Established: 2018

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:N/A
  • Lot Size:N/A
  • Total Number of Employees:10
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

All aspects of production and fulfillment are outsourced to specialty third parties, with the management team heavily involved in supervising the day to day performance of these functions.

Is Support & Training Included:

Seller available to provide support and training, for a transition period or longer.

Purpose For Selling:

An experienced Buyer is needed to take the company to the next level of growth.

Pros and Cons:

Seller’s product base focuses on non-THC hemp products such as CBD, CBG and CBN and not Delta 8. An early CBD market entrant, and the first to do direct mail sales for CBD, Seller innovated new products and marketing techniques to drive growth and retention of customers. Seller is the largest direct mail CBD company, with high average order volume, using proven strategies acquired from years of experience in the dietary supplement space that are unique in the CBD industry. Additional growth is expected to follow by applying these techniques, adding other cannabinoid products, expanding geographic reach and enhancing marketing channels. Seller provides its customers with one of the few or only consumer focused CBD and Hemp product catalogues in the US; which has proven extremely popular with its customers.

Opportunities and Growth:

There is significant upside potential for a buyer with an online presence, to grow revenues by implementing internet marketing and sales strategies. The market for CBD products is expected to continue rapid growth to over $20 billion in the US by 2024, including uses in cosmetics, health products, food and beverage, pet products, skin care and pharmaceuticals. It also is expected that CBD products will be more broadly sold at pharmacies, fitness chains, yoga chains, mass retailers, cosmetic retailers and convenience stores in the future. Seller is well positioned to market its products to such direct retailers, given its established expertise in producing and marketing large volumes of quality, branded products that appeal to the consumer.

Additional Info

The company was founded in 2018, making the business 4 years old.

Why is the Current Owner Selling The Business?

There are all kinds of reasons individuals resolve to sell businesses. Nonetheless, the true factor vs the one they say to you might be 2 completely different things. For instance, they may state "I have too many other obligations" or "I am retiring". For lots of sellers, these factors stand. But, for some, these might just be excuses to try to conceal the reality of transforming demographics, increased competitors, recent reduction in profits, or an array of various other factors. This is why it is really essential that you not rely entirely on a seller's word, however rather, utilize the vendor's solution in conjunction with your general due diligence. This will repaint a more sensible picture of the business's existing situation.

Existing Debts and Future Obligations

If the current business is in debt, which many companies are, then you will need to consider this when valuating/preparing your deal. Lots of operating businesses take out loans with the purpose of covering things like inventory, payroll, accounts payable, and so on. Keep in mind that in some cases this can indicate that earnings margins are too small. Many organisations fall under a revolving door of taking loans as a way to pay back other loans. Along with debts, there may additionally be future commitments to take into consideration. There may be an outstanding lease on equipment or the structure where the business resides. The business might have existing contracts with suppliers that must be met or may result in penalties if terminated early.

Understanding the Customer Base, Competition and Area Demographics

How do operating businesses in the location draw in new customers? Many times, businesses have repeat consumers, which create the core of their everyday profits. Certain aspects such as brand-new competition growing up around the location, roadway building, as well as employee turn over can impact repeat consumers and adversely affect future incomes. One essential point to take into consideration is the placement of the business. Is it in a highly trafficked shopping center, or is it concealed from the main road? Certainly, the more individuals that see the business often, the greater the chance to develop a returning client base. A last idea is the basic location demographics. Is the business located in a largely inhabited city, or is it situated on the edge of town? Just how might the local typical house earnings impact future income prospects?