WebsiteClosers® presents an eCommerce company with a solid footing in two evergreen and lucrative niche fields. The company markets pre-owned replacement parts for home appliances and has developed a strong faithful customer base that ranges from professional service technicians and repair workers to Do-It-Yourself enthusiasts. The company is recognized for not only having a massive catalog of 6,700+ parts to choose from but also for its popular How-To videos on YouTube that demonstrate how customers can make the repairs on their own.
As the Home Appliances market soars and the DIY movement continues to pick up steam, the company has experienced steady growth over the past four years and now enjoys 28% Net Profit margins. Sales are brisk on their $80 Average Order Value, and the company is shipping up to 40+ packages a day. With a reputation for strong customer service that includes fast shipping, the brand continues to win over its customers and its Repeat Customer rate just shot up by 7%.
The company has done particularly well at marketing electronic motherboards that control all the conveniences of modern smart home appliances. The introduction of internet connectivity for appliances has been a major boon for this business that stocks so many of the parts needed to ensure these kitchen, bathroom, laundry room and other vital appliances continue operating properly. Because the company often sells used and refurbished OEM (Original Equipment Manufacturer) boards at heavily discounted prices, they continue to appeal to both professional repair technicians and newcomers to the DIY movement. In fact, once the location of the motherboard is accessed, installation is simple.
The company also benefits from having a multi-sales channel approach that includes its Shopify website, an eBay platform, and more recently, the addition of an Amazon shop. Amazon now represents a rising 3% of sales, with 17% from their website and 80% from the eBay store.
This business represents a clear opportunity for a U.S. Buyer to acquire this company and then scale it quickly. Until now, the company has lacked a clear marketing strategy. That allows the new owner to invest in proven digital marketing tools such as social media market, email campaigns, and PPC ads on Google and Amazon to drive sales considerably higher.
Business Broker Takeaway
Our analysis of this business shows that the value propositions present are strong for a first-time buyer looking to get into the online space. We are excited about this business for 3 important reasons:
1. Strong Supplier Relations. The company stocks its SKUs with the ability to special order if needed. The company has a lock-in supply with its vendor and its warehouse is holding 18,000+ parts because of their frequently rapid turnover of inventory. In some of their product categories, SKUs will turn over within the first day of the listing being posted online. The company uses the SellBrite software for efficient management of its inventory, and its supplier relationship includes this brand having the first position for volume with the vendor, meaning pricing and terms are locked in for contracted periods. This is transferrable to the new owner.
2. Recession-Proof Business. With nearly 7,000 SKUs available, the company continues to appeal to new and existing customers, particularly in the DIY movement. The product mix changes seasonally – for example, refrigerator boards do well in the summer, while range boards attract higher sales in winter. That enables sales to remain healthy and steady throughout the year. With the constant need for home appliance repairs, this company has become recession-proof since new replacement items are seeing higher prices due to inflation, while pre-owned parts provide genuine savings for customers. This is important because many of their customers are looking for savings rather than the cost of buying a new appliance. The company has a growing percentage of repeat customers and a rising number of service technicians who have registered to take advantage of the discounts they offer to them.
3. Strong Scale Options. The company never invested in a marketing plan, relying on eBay’s internal marketing tools to put their SKUs in front of customers, and word-of-mouth customer testimonials and reviews. With this being a highly turnkey operation (the current owner works 5 hours or less each week), a new owner has plenty of great scale options, including launching an SEO program on the website that uses keywords to rank higher in search engines; and key digital marketing tools such as social media and email campaigns, and PPC ad spends. An added appeal to existing customers would be to offer contracts for service warranties, and the company could market more directly to professional service technicians to get more of them to sign up for their discount program.
The Company
Now 4 years old, the company’s outreach to both professional technicians and DIY enthusiasts has been highly successful, and so has its emphasis on competitive pricing and careful attention to customer service. With the bulk of its items being pre-owned, the company has excelled at attractive pricing that continues to attract new customers.
This has been a stable market for the company since there is a constant need for people to repair home appliances, and the DIY trends have only gotten stronger in recent years with information about how to make the repairs readily available on the internet.
With customers looking for quality items that provide savings, rather than buy a costly new appliance, their Repeat Customer Rate is rising and the company’s Lifetime Customer Value has risen to $150.
A new owner will take over a highly automated business that includes two employees who handle daily operations. No unique skills are needed to operate this business, since the eBay and Amazon platforms manage the sales on those sites.
The new owner can easily scale this business by introducing new digital marketing tools, but there are also opportunities for other creative scale methods, such as offering customers service warranty contracts, directing marketing to service technicians, and continuing to expand the sales channels to sites such as Walmart and Facebook Marketplace.
Appliances are a massive and evergreen market across the globe today, and the DIY movement has had a major impact on appliance repairs. This company has been successfully riding both trends for years, and now a new owner has a great opportunity to send profits skyrocketing.
