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$40,500 USD

Sock Geeks

www.sockgeeks.co.uk

Appears in Fashion and apparel , London, United Kingdom, Established businesses, Large Business, Business and Franchises under $50,000, Retail Stores, Inventory, Cell Phone

General description

Sock Geeks is a British sock subscription company with over 1000 active subscribers.

Started 18 months ago, this business has grown consistently since it began, with dramatic seasonal spikes (Christmas, Fathers Day, Valentines Day, etc).

Our biggest point of different is that we match sock designs to people's personalities. This increases the conversion rate of our website (as customers are looking for a unique and more personalised product) and keeps our customers more engaged than an average retailer (as they are getting a product more tailored to them). You can read more about our sock personality matching below.


*** SHOPIFY HAVE VALUED THIS BUSINESS AT $73,610 !! WE ARE ONLY ASKING FOR $40,500 !! ***


HIGH LEVEL FACTS ABOUT THE BUSINESS:

  • 4.6 star rating on a top Reviews site with nearly 200 reviews (reviews show up in Google searches)

  • Website conversion rate of 5% (12 month average Aug. '17 - Aug. '18) - during peak seasons it has been 15-18%!

  • On track to hit annual revenue of £120k GBP (FY 2018)

  • 5,600 active subscribers to the Sock Geeks email newsletter

  • Active listing of Sock Geeks socks and subscriptions on Amazon

  • First page for Google UK search for 'Sock Subscription'

Over the past year we have optimised the site to improve the conversion rate of the store, designed & manufactured our own socks, optimised packaging to reduce production and shipping costs, built strong relationships with our sock manufacturers in China, created over 300 professional photographs (owned by Sock Geeks), developed technology to automate subscription management on multiple sales channels (such as Amazon, and offline retail) and much much more.

Our subscription model has been set-up so that new orders get fulfilled within 1-3 days of purchase, so that new customers get their first pair of socks quickly and don't need to wait around for the subscription to start. After that, they will then receive one pair of socks every month, and these are sent out to all active subscribers on the same day of the month each month. This means that we keep our customers happy whilst also making our business as operationally efficient as possible. The amount of time spent on the business is therefore no more than one hour a day (to fulfil new orders, respond to customer enquiries & carry out day to day marketing activities), plus a few hours once a month to fulfil all the active subscribers' monthly pair of socks.


WHAT ARE YOU PURCHASING:

The whole business is for sale. This means you would inherit:

  • The website, domain names and all creative assets

  • All active subscribers (over 1000)

  • Details of all previous subscribers (over 4000) who are currently lapsed (ability to reactivate or cross-sell)

  • Nearly 6000 pairs of Sock Geeks branded socks (stock at hand as of August 2018 - retail value of £30k+)

  • UK Trademark of Sock Geeks

  • Amazon account with optimised listing for selling individual socks as well as subscriptions (currently being Fulfilled by Amazon with Amazon Prime option)

  • Google Adwords account with huge amount of data & well optimised

  • Review Site account with almost 200 reviews at 4* and 5* (reviews automatically display on Google search results)

  • Facebook & Instagram accounts

We will also provide you with any initial training and support required to ensure a smooth transition to the new owner, along with strategies that you can implement straight away to hit the ground running to increase sales & profitability.

N.B. The website is set up for multi-currency, and is also mobile-optimised.


MARKETING & CUSTOMER ACQUISITION

Acquisition of customers has been predominantly through Google (both organic and Adwords). We also have a very engaged customer base and newsletter list, who make repeat purchases and are very responsive to emails.

  • We are currently on the first page of Google UK organic search for 'Sock Subscription'

  • Our Google Adwords cost-per-acquisition is currently less than £3 and falling

  • Reviews appear in our Google organic and paid listings

  • We have a very high repeat-customer rate (YTD returning customer rate is 28%), and a very high conversion rate from our email lists.

We have barely scratched the surface on other marketing channels.

Therefore the opportunity for a new owner to grow the business is huge, through social media, PR, affiliates, influencers, offline, etc, as well as the ability to add more products to cross-sell and up-sell to customers.

Our website has an average annual conversion rate of 5% (which is double the industry average) so the more people you can send to the website, the more orders you will get!

As mentioned above, one of our biggest points of difference is that we match socks to people's personalities. This is one of the reasons for our extremely high website conversion rate. To work out our customer's sock-personality type, we developed a fun and quick personality quiz. Customer's take the quiz, and then are assigned to one of our 3 different sock-personalty types. We design socks suitable for these 3 different sock-personality types. You can try out the quiz for yourself on our website.


WHY ARE WE SELLING:

The reason we are selling this business (reluctantly) is because we want to spend more time focusing on our main business, which is our personality quiz.

Sock Geeks was initially set up as a case study to prove the effectiveness of the personality quiz for converting customers in an eCommerce business.

We have now proved this, and in doing so, we have also built a fantastic sock subscription business with a huge amount of potential for a new purchaser to hit the ground running and grow the business significantly more.

The quiz will remain our IP after the sale of Sock Geeks, however the new owner of Sock Geeks will be allowed to continue using the quiz on Sock Geeks if they wish, under a licence agreement, free of charge.

Financials and traffic

Our average order value is £30. Order volume and order value massively increase in the 4-6 weeks prior to Christmas, and also other seasonal events such as Father's Day, Valentine's Day, etc.

Over the last 12 months, this is the break down of products (subscriptions) bought, and the associated gross profit per product sold:

  • 13% are 3-month gifts (53% gross profit)
  • 48% are 6-month gifts (48% gross profit)
  • 23% are 12-month gifts (39% gross profit)
  • 4% are recurring personal subscriptions paid monthly (62% gross profit)
  • 7% are recurring personal subscriptions paid 6-monthly (48% gross profit)
  • 5% are recurring personal subscriptions paid annually (39% gross profit)

In addition, we sell individual socks on Amazon and make additional revenue from that.

To date, we haven't made much net profit for the following reasons:

  • We spent almost all our monthly gross profits on google & social paid marketing, to build awareness, momentum and sales. As a result, we now have a lot of data in Google and Social media, meaning that our marketing spend is now able to be much more efficient. This is proved by the face that we have reduced our cost per acquisition from almost £18 per sale (which we were losing money on) to less than £3 per sale (which we make a lot of profit on!).

  • We have also spent a lot on testing new marketing channels to see what works well and what doesn't work well. Again, this means that we now don't need to waste money on channels that don't convert effectively. We will share all of this information with you so that you don't make the same mistakes!

  • Lastly, we have spent a lot of money developing our own technology (included in the sale) to make the business as operationally efficient as possible.

Now that all this hard work has been done, the business is set up to be very profitable for a new purchaser.

Average profit/month

$4,300 USD

Average overall profit margin

48%

Average number of sales/month

300

Value of inventory

$30,000 USD

Average Monthly revenue

$6,047.84 USD

Average Monthly traffic

2,782 Sessions

Revenue and traffic data from this graph is calculated by Exchange and can not be edited by the seller. Average profit, profit margin and number of sales are provided by the seller. Learn how Exchange calculated this data.

Business Expenses

The other large cost to consider is storage cost. Something that can be optimised if using existing storage space.

Expense item

Cost

Shopify plan

$78.00/month

Subscriptions (ie. Mailchimp, apps)

$150.00/month

Advertising (ie. Adwords, Facebook ads, etc.)

$450.00/month

Inventory warehouse

$500.00/month

Domain

$1.00/month

Inventory

Located in London

Willing to ship inventory

Willing to transfer relationships with suppliers

What’s included in the sale

  • Physical inventory
  • Logo and branding assets
  • Social media accounts
  • Personal support after sale
  • Domain
  • Product photos

Social Media

Facebook

sockgeeks

Instagram

sockgeeks

Mailing list

5,600 subscribers

Social media followers

2,500 people

Q & A

Why should someone buy this store?

This business is perfect for a business that has the facilities to add on a highly effective business to their existing brand.

Alternatively, it's perfect for someone with a track record of increasing traffic to a website, who doesn't want to go through all the hassle of setting up suppliers, creating photography, designing a website, creating product and all the other pieces that come with creating a business.

Even continuing the current growth trajectory (see official Shopify data below) will dramatically increase revenue and profit.

How can the future owner improve the business?

  • Improved marketing - Increase traffic into the top of the funnel. The high conversion rate of the website means that a skilled marketer could dramatically increase revenue from simply driving more traffic to the store. We have so far focused on Google Adwords, and only scratched the surface with social media and done little to nothing with SEO, PR, partnerships etc.

The vast subscriber base, however, shows that people enjoy engaging with Sock Geeks.

  • Reduce fixed cost. Again, increased traffic and sales will dramatically increase profit by reducing the fixed costs per product, and allow for savings when ordering more product.

  • Streamline fulfilment There is the ability to have the socks fulfilled directly from China to reduce cost and time needed to spend on the business.

What work have you put into the store?

As well as creating the store, the quiz, designing and manufacturing over 30 different styles of socks, creating the website, shooting photography and all the above, we have also completely optimised the business to minimise man hours required to run it.

We created the business with the aim of having an income stream that required little to no effort.

This has involved creating our own technology to ease management of subscriptions, processes to manage the business, and creating a customer experience that is easy to manage (while also being very effective from a customer experience perspective).

How many hours does it take to run this business per week?

5 hours

$40,500 USD

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