Website Closers® presents an eCommerce business that has become an industry leading provider of indoor and outdoor furniture, with their products prominently displayed in specialty stores, department stores and home furnishing centers – both online and offline. For more than 20 years, retailers nationwide have been purchasing from this company, which provides exclusive wholesale private label products at a time when home furniture sales are soaring right along with the hot real estate market.
For the past 5 years, this brand has taken their catalog online, first with two Shopify websites and then two Amazon platforms. The result has been an impressive growth in the company’s DTC sales and a rising Repeat Customer Rate. The company’s shift into eCommerce has been a huge success for them, increasing their profitability and brand awareness nicely.
The company’s reputation for exceptional value matched with affordable pricing and first-rate customer service has only strengthened since they expanded into eCommerce, and this enterprise is also benefitting from the current state of the highly profitable home furniture industry.
China Team. The company is hitting numerous daily record sales events with no signs of a slowdown, and a lot of this is attributable to their team in China. Their products are designed and manufactured for them in China, where they have a team of 30 people (in addition to their 20 US staff members) that handle sourcing, merchandising, QA/QT, shipping and accounting for the company. This China team is highly valuable not just for this business, but also for future product lines. Everything is sold under the company’s brand name, and they have a strong reputation for high quality products, affordable pricing, and excellent customer service – all of which is highly attributable to their cross-border capabilities in Asian, which very few furniture companies have at their disposal.
With the real estate market continuing to break records and homes getting purchased within days of landing on the market, that has resulted in increased spending on home renovations and home furnishings. The home furnishings industry hit $120 billion in 2021 and is projected to keep growing by 4%.
There has also been a heightened interest in making outdoor home areas look as comfortable and appealing as possible. The outdoor furniture market in North America is projected to reach $6.7 billion by 2027, and manufacturers have responded by looking for creative ways to produce new outdoor furniture, allowing customers to choose from a wide range of wooden, plastic and metal finishes and colors.
The end result for companies such as this one has been a sharp increase in sales for items designed to make outdoor living space more attractive. One of this brand’s greatest strengths has been the diversity of their catalog: they now have more than 2,000 products available. That gives this brand a major scale option, as we will see while reviewing the company’s track record within this very lucrative niche space.
Growth Partner. Due to the massive near-term growth the company is experiencing, this company is being valued based on a discounted cashflow model. Ownership is interested in retained equity and remaining involved; the perfect buyer would be one that welcomes the Founder as a partner after closing, who has access to capital, connections and a network, and who can be highly influential in taking this business to $100M in Revenue, and beyond. The structure of the deal will be important, but the seller is open and flexible, especially if the right buyer comes along with the tools necessary to help grow this business.
eCommerce was a major decision for the company. From the start, all the company’s products have been designed and manufactured for them, to be sold under their brand name. Initially marketing these products to traditional retailers, the company’s product line continued to expand, and now includes a diverse and stylish selection of Adirondack chairs, outdoor patio sets, patio umbrellas, outdoor patio heaters, indoor dining room sets, and bar stools. In total, their catalog includes more than 2,600+ SKUs. The success of their wholesale program enabled the company to sell directly to customers through their two Shopify sites and on Amazon. With an Average Order Value of $200, the company is doing exceptionally well, shipping 360 orders a day to a customer base that includes literally anyone who owns or rents a home.
Patio furniture has become the company’s top seller, representing 80% of the sales. While their products bring in solid revenues year-round, sales peak in the spring and summer. Today in addition to their branded products, they also sell third party SKUs on Amazon.
The company is growing its eCommerce sites. To boost their eCommerce sales, the company has used different digital marketing tactics to drive sales. They have been running PPC ads on Google and social media sites such as Facebook and Instagram to attract new customers, while they also run PPC ads on Amazon.
The company has an SEO program to ensure their websites rank well in search engines, and they also have an educational blog to attract new customers.
The company is starting to see an increase not just from new buyers, but also on upsells. Their Repeat Customer Rate has started rising to 10% and continues to get higher. The company also maintains plenty of 5 Star reviews on their Amazon platform from customers who have raved about the high quality of their products, fast delivery, and excellent customer service.
The company ships products from its 50,000 square foot warehouse, while new inventory orders are placed once a month to keep up with customer demand. For wholesale accounts, the company offers its customers both dropship and direct shipping opportunities for their extensive line of outdoor patio furniture.
It’s important to note that they are now offering just 10% of the items available in their furniture catalog, so there is a massive growth opportunity here by reviewing the remaining 90% of the catalog and adding many of those SKUs to their existing sales channels. A partner that acquires this company should have access to capital to capitalize on the low hanging fruit available in SKU expansion. A buyer of this company could expect massive growth from that kind of investment in future inventory.
The company has an experienced team in place. The current ownership employs 50 workers, which includes 20 in the United States, such as those working as account managers, customer service representatives, a production team, an office manager and a warehouse manager. In addition, they have 30 workers employed overseas, handling sourcing, merchandizing, shipping and more. Some contractors have been added to handle aspects of the company’s marketing efforts. As a large B2B and DTC operation, this team has the experience and skill to manage all daily operations for a buyer.
Customers have come to love this brand’s attractive and carefully made furniture items, and the company has clearly fulfilled its mission to offer premium products at a time when the demand for outdoor furniture is skyrocketing. With a thriving eCommerce customer base and a strong B2B/wholesale market, this company is ideally positioned for a huge amount of growth in the near future.
Contact Website Closers today to find out more about this amazing Middle Market Transaction.
This Furniture Brand is Represented by:
Tech & Internet M&A