Private listing #689044URL Hidden
- Avg. revenue /month$52,143
- Avg. sessions /month77,142
- Avg. profit /month$7,500
- Inventory value$5,000
The business is a women's swimwear website that using drop-shipping to source and ship product to customers. The store has grown rapidly over the two summers (18 months) it has been open; the store was launched at the end of March 2017 and in the first 6 months the store generated $341K in gross sales. Revenue generated from April to June in 2018 was 65% higher than revenue generated in the same period the year before. Customer acquisition is mostly driven through Facebook and Instagram advertising. The company has developed a very large and loyal following on Instagram (49K) and Facebook (15K) and has generated nearly as large an email list (35K).
The company is well positioned to continue growing or, alternatively, could be run in a way that would maximize profits at potentially very high margins. A large majority of the posts instagram users tag the company in are from real customers however there is a constant stream of both micro and rather-large influencers willing to promote the business solely in exchange for product. The massive email list at the company has been underutilized to this point but there is enough data to show that if a more aggressive email marketing strategy were employed that the email list could generate a very significant amount of new, highly profitable business. The company has very large gross margins of 68% that leaves plenty of room for a large advertising budget but the truth is that the return on advertising expense decreases quickly as the amount spent increases. If the business spent half as much on Facebook/Instagram advertising the total return on that advertising spend would not decrease nearly as much. This business could continue growing quickly, or, if the buyer preferred, the business could be run very very profitably. The business has actually grown a real following with enthusiastic supporters. It is no longer surprising to hear that somebody I meet (and is a total stranger to me or my friends) has heard of the company or "seen the ads." Unlike what I believe is the case with many drop-shippers, a decent piece of the business is beginning to come from return customers. Over the last three months 14% of sales have been from return customers and for the same period last year it was only 4%. The company's customers and fans are valuable and will continue to generate value for any owner.
The best ways to improve the business in my opinion depend on what the buyer is hoping to accomplish. I believe that the company could easily sell adjacent products, also drop-shipped, like cover-ups, sunglasses, beach towels, or inexpensive accessories (bracelets etc). Selling new products would likely increase either conversion rate or average order value or maybe both. The company could also begin selling season-adjacent products that might sell better in the fall and early winter. Selling athletic clothing or leggings for women year round (and especially when swimsuit sales slow in the winter) could be a great way to decrease the seasonality of the business and make it easier to maximize profits year round. Currently the business only sells in three countries but I am positive that it could begin selling in many other countries almost immediately with no real additional costs implied and a good amount of upside available from selling internationally.
I have never started or sold a store before this one so everything I have done was both learned from scratch and my intentions have always been to create as solid a company as possible (not to sell but rather to run and grow). I built and rebuilt the website, have cultivated the social following, determined effective advertising techniques, and determined shopify apps that could generate value. I have used Zendesk to create automated customer service responses that drastically decreases the amount of time necessary to respond to customer inquiries and will make it much much easier to take on an additional employee or VA to handle customer service inquiries. I have sourced all of the current products which includes finding reliable suppliers. I have eliminated products that have not sold well or left customers unhappy.
Traffic and Performance
- Avg. revenue /month$52,143Verified
- Avg. sessions /month77,142Verified
- Avg. profit /month$7,500
- Inventory value$5,000
- Profit Margin14%
- Avg. sales /month1,561
Other details about profit: Gross profit margins are extremely high at approximately 68%. The amount spend on advertising has been very high on average at about 50% of sales. I am certain that I, or any owner, could pay significantly less on advertising without giving away too much growth or total revenue and run the business at a much higher profit margin.
- Shopify plan
- Inventory warehouse
- Shopify Apps (285) + Mailchimp (287)+Zendesk (50)
- Physical inventory
- Logo and branding assetsWhatever works for the buyer but I will be thorough and offer my complete support.
- Personal support after saleI will offer all the support desired via phone and email for as long as it takes to get the new owner comfortable running all aspects of the business. After that I will continue to make myself available should there be any issues where the new owner is interested in getting my opinion.
- Product photosWhatever works for the buyer but I will be thorough and offer my complete support.
- Social media
- Mailing list45,000subscribers
I would expand to selling in more countries almost immediately. I would begin offering adjacent, summer-friendly products. I would sign up with an influencer marketing platform in order to efficiently increase the the amount influencer marketing the company does. Those are mostly near-term ideas. After a year or so or maybe sooner (and assuming the scale of the company had increased significantly) I might look into enhancing the brand value of the company by branding the products, ordering in bulk, and warehousing in the US.
The new owner should be comfortable with facebook/instagram advertising although I knew nothing about it 1.5 years ago. The new owner should know or learn how to run a shopify website. Any skills to create better performing ads or a better-converting website could create a lot of upside for the owner.
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