All prices in USD

Private listing #796811

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$985,000
  • Avg. revenue /month
    $32,782
  • Avg. sessions /month2,747
  • Avg. profit /month
    $15,221
  • Inventory value
    $28,430

Business Story

Why this business was started

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I started my career on Wall Street in 1986. By 2000, I was running a venture capital fund focused on energy technologies. In 2004, my father and I started a company to manufacture and sell renewable energy heating systems. After selling heating systems throughout the country over 12 years, the EPA proposed emission restrictions on sales of new heating systems. However, millions of previously installed systems are all “Grandfathered” so the new rules do NOT affect them, except only to motivate such customers to do proper care and maintenance of their heaters so they last for decades.

With fresh motivation to properly care for and maintain their heaters, I could not keep up with demand so in October 2016, I opened a Shopify store to meet this market demand, and in the ensuing 32 months, we sold more than $1 million in parts and supplies.

The biggest selling product is a liquid solution that prevents corrosion. Each heater was sold with a 20-year warranty, and in order to maintain the warranty, the customer must use this product, and submit every year a small water sample that proves that their heater is properly protected. THESE CUSTOMERS ARE HIGHLY MOTIVATED TO PURCHASE THIS PRODUCT because that is the only way they can ensure that their warranty remains valid, and their heater is protected against corrosion.

An important point on this warranty: The buyer of this store will assume ZERO warranty liability – that liability remains with the manufacturer which is a different company. We will explain that in greater detail later.

A big motivating factor that drives customer loyalty is the perceived value the customers receives when they submit a water sample to our “lab” for testing. In response, we test their sample and then provide them a report that tells them that either their sample passed the test, or if not, how much solution to add in order to achieve a passing grade.

Although we have created the impression that testing is complicated, the testing procedure is simple. The procedure is completed using a one-page checklist by a 15-year old young man who we pay per test. This is a major driver of customer loyalty.

Demand is also very strong for replacement parts - pumps, fans, simple electronic components, cleaning brushes and supplies, etc. Many customers are required to purchase these items from us for their warranty to remain valid.

These customers are fiercely loyal to our brand. They want to protect their investment with proper maintenance and operating procedures, and our treatment chemical has been specifically formulated to protect the exact grade of steel in their heating systems.

Fortuitously, I had snagged the industry-leading domain “[REDACTED]” many years ago and hadn’t done anything with it. After opening the Shopify store, we added this brand name to the store but have not marketed to all the other brands – a massive market. We are amateur online marketers, so this enormous market is virgin territory for a sophisticated online seller (YOU!).

The reason of selling this business

I am not a sophisticated online seller/marketer. I just developed a successful product offering that satisfies a market need. Now that the business has shifted to the online world, I am out of my comfort and experience zone. Even though the business grew 30 percent in its second year on Shopify (2018) after its first full year (2017), this business could become so much more. It is therefore time for the amateur (me) to let go and allow the professional (you) to take over and allow this company to soar.

Also, I have a new job so I am ready to let go. I am getting out of this niche industry completely and would be happy to sign a non-compete agreement.

What's involved in running this business

I have organized things to run by themselves on the operations side. It is simple – some items are drop shipped direct from vendors, and some items are fulfilled by our fulfillment center. Items that are stocked at the fulfillment center are shipped automatically - the center is connected to our store and downloads orders every 15 minutes. For items that are drop shipped, I have a call center in the Philippines with two employees (very low cost) who handle such orders. This team takes excellent care of all customer service, technical support, and administrative details. You could make any changes you like to this approach to fit in with your current business systems, or you could leave things exactly as they are and have them continue to operate seamlessly.

With only few exceptions, I never touch the products. I live overseas for 4-5 months each Winter so the business is set up to run itself. Most of the inventory is ordered by my team, and I also have a Philippine accountant who takes care of my books. So I spend as much or as little time as I want with the business. My wife jokes that we should travel more because it seems that each time we travel to exotic places, the store does exceptionally well while we are gone and our bank account has much more money in it upon our return than when we left – even after paying for travel costs!

We don’t do much marketing. I am not good with google ads, or any other advertising methods. We do send out Mailchimp emails a few times a week, but those articles are just modified versions of the articles we sent out in years past, and my team takes care of most of that. If you are good at marketing, you could probably increase the size of this business 5x very quickly.

We have a knowledge base of articles that answer every technical question that has ever been asked related to this industry.

Here is what we have been good at: Our site has become the recognized leader and provider of information for our industry. We have published all the industry standards, we have all the operations procedures documented, and any possible technical concern has answers and solutions through hundreds of articles in the blog section of our Shopify store entitled “Easy Fix Articles”.

Our approach has been to create a community or "Family" of people who care about renewable energy heating. They are a group of independent, hard-working people who love saving money and beating the “system”. They are very comfortable getting their hands dirty, and building their own future. So our messages to them have been successful as we bring everyone together over these common attributes: Freedom, Independence, Hard Work, and Patriotism.

This business was founded: about 3 years ago
Time to run this business: approximately 15 hours per week

Traffic and Performance

  • Avg. revenue /month
    $32,782
    Verified
  • Avg. sessions /month2,747Verified
  • Avg. profit /month
    $15,221
  • Inventory value
    $28,430
  • Profit Margin35%
  • Avg. sales /month163
Other details about profit: Note - This is a seasonal business since it relates to heating. In the six months from August through January, we generate approximately 73 percent of annual revenues. So while these figures listed here are annual "averages", there is a normal seasonalality of the business that peaks in Oct/Nov as customers prepare for the Winter heating season. Our gross profit margin in 2018 was 56 percent. That can be increased even more through higher volume purchasing, and fulfillment cost reductions that can be achieved. Our net profit margin in 2018 was 37 percent. That can also be increased, mostly by reducing shipping costs. (Note that many companies include shipping costs in their "Cost of Goods Sold". We break it out so that we can measure our effectiveness at recovering shipping costs in revenue from customer orders.)
Total revenue
  • $1,180,149
  • Revenue data comes directly from Shopify and cannot be edited by the seller
    Total traffic
  • 98,917Visits
  • Traffic data comes directly from Shopify and cannot be edited by the seller

    Expenses

    • Shopify plan
      $119
      /month
    • Inventory warehouse
      $1,200
      /month
    • Employees
      $1,833
      /month
    • Domain
      $100
      /year
    • MailChimp
      $150
      /month
    • Craigslist
      $50
      /month
    • Salesforce.com
      $373
      /month
    • Lab Expenses
      $255
      /month

    Sale Includes

    • Physical inventory

    • Logo and branding assets

      All logos and especially proprietary exclusive branded and trademarked product lines will be transferred to the new owner via an online file and my attorney will draft a transfer of ownership of all copyrights, trademarks, and all intellectual property and trade secrets.
    • Personal support after sale

      I would be happy to provide training remotely and in person with the new buyer if needed at our office or yours as needed and agreed upon. After the initial training, I would be available for a pre-set number of hours per week for the remainder of the first full year of operations post-close as needed for an orderly and successful transition.
    • Domain

    • Product photos

      All product photos (hundreds) are owned by us and will be transferred to the new owner via an online file.
    • Social media

    • Suppliers

      Not Included
    • Mailing List

      22,620subscribers

    Seller‘s Advice

    How to grow this business

    Why this will be your best investment ever:

    • Current customers are intensely loyal, because they are required to use our parts and supplies in order to keep their 20-year warranty valid. (Buyer assumes no warranty liability.) • We do almost zero marketing. Tremendous upside exists for a buyer who applies sophisticated marketing strategies to attract new customers. • A large market of existing brand customers is available – these are customers who need our parts and supplies to maintain their warranty, but who are not current customers of the online store. (Details revealed under NDA only) • This parts and supplies niche industry is growing rapidly, since regulations have forced customers to take better care of their installed systems. Therefore, the enormous installed customer base must do a better job of maintaining their grandfathered assets, but must use our parts and supplies to keep their warranty valid and in force. • Buyer may choose to greatly enhance profitability immediately through larger order and inventory quantities (details to follow) • Current regulations may get reversed by the Trump Administration which would enable buyer, IF DESIRED, to enter manufacturing of industry-leading products using proven drawings and outsourced vendors. (Optional! No downside, only upside. This optionality is included in this offer at zero cost. Product drawings are included however, to preserve that these products remain with this company. Let us explain this to you further.) • This online store runs itself: We have a fulfillment center that fulfills all orders. Order fulfillment could be brought in-house to increase profitability. The online store also has a two-person customer service team that takes orders and answers technical support questions. The customer service team operates from the Philippines and is intensely cost-effective.

    How to grow this business • Apply sophisticated online marketing strategies. We are not marketing experts. We just created a great set of products that sell like crazy when people find us. • Easily expand this business to serve owners of all other brands and models of this niche industry, not just our primary brand customers. • Also pursue the large number of our heater customers who are not current customers of the online store. This niche is big. • Amazon sales! We are connected with Amazon, but don’t know how to sell there. Same with Facebook in the industry forums, Craigslist, eBay, etc. You will see that we only have 90 Facebook followers which shows that we have not made this a priority. • There are also significant opportunities to serve indoor wood stove customers with an online store. • A very high return on investment (ROI) can be achieved through larger volume purchasing of parts sold at this store – gross margins can be improved 22 percent or more. • Considerable savings can also be achieved through fulfillment. The current fulfillment center costs are quite high, and in particular, their shipping costs are quite high and could be cut by at least 25% if handled in house, or perhaps through a different fulfillment center. This is a major area of cost savings that a new buyer should explore. (With my international travels, I was not motivated to make such a change.) • By simply applying sophisticated online marketing strategies, growth rates can go from 30 percent to 500 percent or more. This market is completely open

    Skills to have

    No special sills are required, just a desire to apply online sales strategies to make money!

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