Website Closers® presents an eCommerce company doing exceptionally well within the highly profitable global hair care market, having built up a strong customer base for their hair extensions that are all the rage within the industry today. The company’s profits are growing as quickly as the customers’ hair does, and the company has built up a solid reputation as a leader in this highly in-demand field.
As the first brand to sell their particular hair extensions, which have a proprietary design, this company continues to innovate and stay ahead of the curve. Remaining on the cutting edge within the hair extensions industry has been their goal from the start, and they continue to set a high standard for hair extension brands. In fact, their particular products have been copied by some of the largest hair extension brands in the world, including Luxy and Zala, since they recognize quality when they see it.
Like many other businesses in the lucrative hair products industry, this brand has done an exceptional job using the popularity of social media and the visual appeal of how their extensions look on satisfied customers to drive sales higher. With a massive 76,000+ followers on Instagram and another 19,000+ on Facebook, the company has enjoyed the kind of exposure online that keeps their sales rising.
This is an international company, with sales in the U.S., Canada, the UK, Australia and New Zealand, and they source from two main suppliers that have been working with them for 5+ years, providing them with trusted and reliable service. With a $256 Average Order Value, the company has been profitable enough to expand to 107 SKUs, of which 102 are variations on their core hair extension product.
There are certainly a lot of strategic decisions this company has made that have contributed to their growth, but it’s also important to note that the Hair Extensions Industry is growing at a rapid pace today. The industry really took off after the pandemic lockdowns, when customers couldn’t go to their local salons. As online shopping dramatically increased, hair extensions became tremendously popular because they were effective and the customer could apply the product themselves without the need for a professional hairstylist.
Today this market is worth $364 million in the U.S. alone, while the global hair extension industry is expected to earn $10 billion in 2023. This is now the fast-growing segment of the overall hair care and beauty industry today.
That’s a lot of profits to be earned, and this company has certainly demonstrated how an eCommerce shop can grow in this niche space. A review of the company’s history will help demonstrate that.
First launched nearly 7 years ago, the company developed its products in a category of hair extensions known as halo, a simple and one-step method for customers looking to get longer and fuller hair.
These halos are popular with first-time users who can easily apply them for everyday wear in just minutes. Easily attached, it provides thicker and longer hair in seconds, without causing any damage to the user’s real hair.
The company provides its suppliers with their own unique design specifications, and the company sells only its own branded products.
While their SKUs enjoy strong profits year-round, sales do get stronger between July and December, and their Repeat Customer Rate has been growing as the average customer tends to purchase more than one halo extension. Today that Repeat Customer rate has increased to 25% and this percentage of repeat customers is growing year over year.
The company’s marketing is a healthy mix of paid and organic traffic. Their PPC ads help drive 44% of their profits, while SEO is boosting their organic traffic and contributing to 33% of sales. Their return on investment is now 5.5x.
Their SEO efforts have been particularly effective and include an informative blog on their Shopify website that successfully attracts 55,000+ monthly visitors and has its own paid subscribers, bringing the company $5,500 in revenue each month. Their overall SEO program, which includes the use of keywords and outbound link building, has given the company a tremendous 100,000+ unique monthly visitors.
With 250,000+ people in their email database, their email marketing campaigns have a healthy open rate and they’re enjoying a high return on that.
The company also engages with its audience very effectively on their social media channels, which includes collaborations with similar brands and industry influencers that help them reach a new audience and grow their email list.
A significant benefit for a buyer is that the current ownership works just 10 hours per week, and could work even less since the company has an experienced team in place to handle daily operations. That includes a social media manager in charge of social, content and PPC ads, a manager in charge of emails, graphic design and the company blog, a supply chain manager and five customer service representatives.
The company keeps $250,000 to $300,000 in inventory available to keep up with orders, and all products are shipped from their three 3PL warehouses. The company normally holds about three months’ worth of stock, particularly leading up to their high season. Additional inventory is ordered every two months.
With glowing reviews from their customers, the company is projected to continue growing and certainly has demonstrated they have the tools to do that. For a buyer, the bigger question is how ambitiously they want to scale this operation, since the addition of new SKUs, including products in new hair categories, would provide a significant boost to sales. So would expanding their listings onto popular eCommerce websites such as Amazon, Walmart and eBay.
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