Website Closers® presents a seasoned Party Supplies eCommerce company that has consistently demonstrated growth and profitability since launching 15 years ago. Across four brands, the majority of products are sourced from established suppliers in Asia with whom the owners have cultivated excellent relationships over the years.
This business has been pre-approved by our lending partners at industry leading interest rates, amortized over a decade. This allows a buyer to put down 5-10% of the purchase price, and thus earn a much quicker ROI. The buyer will also have the benefit of a 3rd party valuation and a “2nd set of eyes” from the bank, helping to decrease the risk profile of the business acquisition. This pre-approval also speaks volumes to the quality of this company and the contemplated transaction.
Almost all products are or have been created by the in-house team of expert designers, and every SKU is specifically branded with one of four trademarks owned by the group. Much of the company’s success is due to this design team being uniquely engaged with the target market because they are the target market.
New ideas are presented weekly and maintained in a database, from which management constantly evaluates the best to bring to market. The well-integrated team designs products and participates in PPC campaign tuning to maintain a strong tie to current trends.
The company has 479 active SKUs and an additional 54 that it is selling until they are out-of-stock. Approximately 30 SKUs are invented and launched annually to keep the product portfolio fresh and discontinue the least-performing products. The primary sales drivers include dress-up and birthday party items for children and household parties and special occasion items for adults. These are highly stable markets, as the 1,300 daily sales will attest to.
Management makes use of a 100% stock inventory model. All of it is imported to a 3PL warehouse, from where 40 to 50 full truckloads are moved to Amazon facilities for fulfillment each year. Orders are typically placed six times annually to maintain six to nine months of inventory. They are done in these volumes to increase the bottom line by purchasing at a high MOQ. This minimizes the price per unit, inventory carrying costs, and transportation fees. The staff takes great pride in maintaining minimal stockouts at FBA while reducing logistical costs in the entire value delivery system.
The accomplishment is in no small part a result of proprietary software used to manage inventory. The owners have investigated many alternatives, including custom software, yet nothing has come close to helping them optimize inventory, PPC spending, and profitability to the level they do.
Sales remain strong throughout the year, with a slight peak in the Fall, producing steady cash flow and a consistent workload.
The marketing approach is straightforward yet strategic and relies primarily on Amazon PPC and AMS. Leadership has learned from experience that for the product types it sells, customers are less loyal to a brand than to Amazon Prime. As a result, they focus on being the top-ranked brand in the marketplace for the product categories in which they participate. Optimized listings, high-quality images, and superior A+ Content complement the paid endeavors. This has proven fruitful, with a yearly average ACoS of 10.5%.
The product ranges are designed for children and adults of all genders and ages alike, therefore catering to virtually every online shopper. The highest customer demographic, however, is a middle-aged female with children.
The owners focus principally on long-term growth, new products, markets, and channel development, as well as sales, pricing, and inventory strategy.
They devote around two hours weekly to operational reviews with the team that runs the business. They also invest around eight hours monthly reviewing financials to ensure everything is maintained to a high standard of compliance. Finally, three to five days per quarter are dedicated to strategic evaluation and direction.
An adept team handles most day-to-day operations and includes members in the following capacities:
It is worth noting that these are well-paid US employees, and the cost structure could be reduced significantly if a strategic buyer has a lower-cost team in place. Additionally, the company is reviewing and pricing out the opportunity to replace many of the current staff members with Virtual Assistants and other much lower cost staffing. This can be done right away after closing.
The eCommerce party supplies and accessories industry is poised for continuous growth, presenting an excellent opportunity for new owners to capitalize on the projected demand. By acquiring an established business in this niche, they can leverage existing customer bases, well-developed supply chains, and strong brand recognition to tap into the ever-expanding market.
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