Website Closers® presents an illuminating eCommerce business that sheds plenty of light on why homeowners are eagerly embracing the purchase of outdoor lighting.
To understand why the outdoor lighting industry is valued at $13 billion and growing fast, with eCommerce leading the way, look no further than this highly profitable business that has found a significant customer base through their platform on Amazon. The company has performed exceptionally well attracting customers who love putting up Christmas lighting every holiday season, but they’ve also demonstrated that outdoor lighting is marketable all year round.
In fact, while Christmas lighting makes up 40% of their sales, the remaining 60% comes from low-voltage lighting that can be used on an outdoor patio or decorative garden, serve as a deterrent to thieves, or simply add curb appeal to an attractive property.
Having demonstrated that outdoor lighting is something people buy all year, the company has watched their revenue light up on their direct to consumer sales, but they are at a transition stage. The company has started to experience a rising number of sales to professional lighting installers. Having focused entirely on DTC sales to date, the company is poised to experience a huge growth spurt as they expand into the wholesale market, targeting the thousands of independent installers that market outdoor lighting products. This is the perfect time for a buyer to acquire this company and enjoy those rapidly expanding channels.
A major value this company offers a buyer of this brand is the loyalty of the existing customer base. The company’s Repeat Customer Rate is now 33% and rising, but that percentage masks the fact that certain products actually have a phenomenal 80% reorder rate.
The company is constantly adding new products to the line of 119 SKUs they now sell, and since a lot of those products got added in the past 12 months, their Repeat Customer rate is projected to grow considerably higher in the new year.
Their success demonstrates why outdoor lighting is so profitable today. Quite simply, outdoor lighting isn’t just for Halloween or Christmas anymore and is in high demand among strip malls, community entrances, and municipalities that want well-lit venues to promote pedestrian and guest safety but also to make their properties more visually stunning at night.
That concept has caught on with the public. With the homeownership rate in the U.S. now at 66% in 2022 (and as high as 78% in some states), the public recognizes that lighting designed for outdoor use can be just as appealing as a well-lit living room or kitchen.
The worldwide outside lighting fixture market is projected to enjoy a major increase in the coming years as eCommerce has given consumers more LED energy saving lighting choices than ever for ways to creatively shine a light on their home. This company achieved its strong position within this niche space in just a few years, so here’s a closer look at how they did it.
Launched 5 years ago, the company has grown tremendously as the outdoor decorative lighting industry has become a major cultural trend. Through their Shopify website and Amazon platform, the company has done an exceptional job using photos of brightly lit homes to demonstrate how low-voltage landscape lighting can make homes both safe and beautiful all year long.
They have also demonstrated how these products have a mass appeal when they’re affordably priced to the average consumer.
With more than 100 SKUs available, they have an increasingly diverse product line that includes LED spotlights, pathway lights, Christmas lights, and much more. Their products are manufactured by multiple factories that this company has built strong relationships and there is plenty of customization to the packaging and product configuration of items sold under their brand name.
At an Average Order Value of $165, only 30% of their business is seasonal with those Christmas lighting that sells from October through December. Their landscape lighting products maintain steady sales throughout the year, with peaks during the spring and fall, and there’s a lot of room for optimizing some of their existing products and adding new ones. In fact, the company frequently hears from their customers about what they’re looking for and has a solid understanding of what type of new products will generate the highest profits.
Amazon has been their dominant sales channel, and the company takes advantage of PPC ads on the site to drive sales higher and introduce their products to new customers. Operating on Seller Central, the company has done so well on Amazon that they are now in the process of expanding listings onto another eCommerce titan, Walmart.
Amazon also enables the company to take advantage of Fulfillment By Amazon for fast shipping and strong customer service. Since landscape lighting is not impacted by seasonal factors, the company maintains between 4-6 months’ worth of inventory to keep up with demand.
They maintain a 1,000 square warehouse to reduce the possibility of being out of stock if sales pick up. Because they continue introducing new products, there are always questions about which items will take off with buyers so they stay well stocked just in case.
A key aspect of their Amazon strategy has been those promotional photos that demonstrate how gorgeous their lighting looks. This tactic has worked so well that the company has recently enjoyed a significant uptick in orders from professional lighting installers around the country, giving them their first break into B2B sales. There is enormous potential to drive these wholesale accounts much higher.
Their audience on Amazon has been diverse. They appeal to homeowners, Do It Yourself users, and people looking to replace their older outdoor lighting fixtures. Their buyers are usually between the ages of 35 and 65, a healthy mix of both men and women, and they have won numerous Amazon Badges for their most popular SKUs.
The company has untapped potential to expand their marketing beyond PPC ads, and one of the strategies they’re exploring is video marketing on sites such as YouTube, TikTok and Instagram. It’s a great way to introduce their products to a much wider audience in the future.
The current ownership now focuses on tasks that include researching new products, optimizing their listings, and reviewing inventory with suppliers. They employ a warehouse manager who ships inventory to Amazon FBA and handles returns and customer inquiries.
For a buyer, it’s worth noting how rapidly this company is growing today, with nearly 30% profit margins, and how the simple task of introducing new products will send their profits skyrocketing.
