$2.6 Million Revenue Dropship Ecommerce Business

• Property Owned or Leased:N/A
• Property Included:N/A
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• Total Number of Employees:N/A
• Furniture, Fixtures and Equipment:N/A

Home Based

Purchase price includes 45 days of support to train you/your team on how to run the business, manage the team, and pursue growth opportunities

Owner is actively investing in real estate and wants funds for acquisitions

Direct traffic (i.e. people coming directly to the website on their own because they know its domain name) accounted for about 20% of overall traffic over the past 12 months (ignoring the '(Other)' category from the above report). During the same time period, approximately 24% of orders were placed by returning customers who had already ordered products in the past. The owner has done a fantastic job diversifying the business' marketing channels. Following is a breakdown of ad spend over the past 12 months: - Facebook / Instagram - 55.4% - Pinterest - 24.5% - Google - 9.9% - Affiliate commissions - 5.4% - TikTok - 1.5% - Microsoft - 1.1% - SnapChat - 0.8% - Amazon - 0.7% - Micro-influencer marketing - 0.7% As noted above, the business currently outsources the majority of ad management (Facebook, Pinterest, Google and Microsoft) to a third-party ad agency. The owner has been very pleased with the results the agency has achieved and maintained over a long period of time. While the business' Return On Ad Spend (ROAS) was higher before the big Facebook ad shake-up in May 2021, the business' overall ROAS (calculated as total revenue / total advertising costs, including affiliate commissions) has continued to hover right around 4.25 over the past 8 months (June 2021 - January 2022). If you (as the new owner) chose to bring ad management in-house (rather than continuing to pay the ad agency to manage the ads), you could immediately add over $38,000 to the bottom line. Over the past 12 months, affiliates were responsible for generating a total of $150,589 of revenue for the business. Continuing to expand the affiliate network is a great growth opportunity for the business. Using influencers (and particularly micro-influencers) to promote the brand and products has also proven to be an effective marketing technique. Not only do influencer plugs lead to immediate sales, but they also increase awareness about the products and build brand reputation. The United States (25.5% of traffic) and United Kingdom (13.4%) are the only 2 countries that account for more than 7% of total traffic. Italy, Australia, Germany, Spain and Canada are all in the 5-7% range. The remaining 32% of traffic is made up by visitors from countries that account for 3% or less of total traffic. As noted above, orders are shipped from several fulfillment centers throughout the world (including one in the United States, one in Europe and one in Asia) to ensure quite fast delivery times, regardless of where the customer lives.

Top Growth Opportunities 1. Get Exclusivity with the Manufacturer - While the business is clearly the #1 seller of the brand/products it sells, it is far from the only retailer. The manufacturer has indicated that they're open to granting the business the right to be the exclusive retailer with a sizable purchase of each of handful of products (the quantities and prices are both negotiable). The owner estimates that becoming the exclusive worldwide retailer of the brand would instantly increase sales by 30-50%. It would take an infusion of capital to do this, but it is the next logical step to turning the business into a worldwide brand. 2. Stock & Ship (Instead of Dropship) - The business currently uses a purchasing agent, who buyers in bulk from the manufacturer, stocks the products, and handles fulfillment. While this is a very convenient set-up and essentially eliminates the need for working capital, it obviously eats into the profit margin. If you were to buy directly from the manufacturer, warehouse and ship products yourself, the owner estimates that the 50% gross profit margin would likely increase to around 60-65%. At the volume the business is currently doing, that would increase the gross profit margin by around $265,000 to $395,000 per year. 3. Increase Amazon Presence - There is a lot of growth potential on Amazon. The owner didn't initially put much effort into Amazon as he worried it might cannibalize his website sales, but now that the brand is more established he thinks promoting the products on Amazon more would introduce a lot more customers to the brand and products (particularly if exclusivity is secured). Additionally, the business currently keeps a fairly minimal amount of inventory on hand at Amazon, resulting in occasional stock-outs that hurt Amazon rankings and sales. 4. Add New Products - The current catalog is quite small (less than 50 products, the vast majority of which are little add-ons and accessories, not the main product line). The owner hasn't focused much on expanding the catalog. With the customer base and community the business has built up (102,000 email subscribers, 68,000 Facebook Messenger subscribers and 23,000 SMS text subscribers), adding some complementary products could really boost sales. 5. Use a 2% Cash Back Credit Card - While some expenses cannot be paid for with a credit card (including Cost of Goods Sold, credit card processing fees, affiliate commissions, payments to VAs, and a couple others), many of the expenses can be paid by credit card. The owner currently uses a travel rewards card to earn airline miles for personal use. If you were to switch to a 2% cash back credit card (like the Capital One Spark credit card, for example), the cash back on advertising expenses alone would generate $10,400 of additional profit per year. Together with a few other expenses, the bottom line could easily grow by $15,000 per year.

This Business Is Home Based