Website Closers® presents a Membership-Based Online Marketplace that is growing rapidly year over year, with recurring revenue now representing 30% of their growing monthly sales.
The company offers an impressive assortment of handpicked Home Furnishings and Indoor & Outdoor products. These products are analyzed and chosen by an internal Product Research Team that uses a proprietary system of picking which products are best suited for their growing membership audience.
Many of the company’s products include electronics, gadgets, items for the car, and many others that provide convenience, comfort, and pleasure at home. All high demand items that tend to have a lower level of competition in the marketplace. It turns out these SKUs are exactly what consumers are looking for since the company has been experiencing 230% Earnings Growth since July 2023, skyrocketing profits for a brand with a $40 Average Order Value.
One of the company’s smartest moves was to launch their Membership Program, similar to Amazon Prime, which provides customers with free shipping and 50% off future purchases. This has proven to be a significant revenue generator and a catalyst to overall growth at the company. With over $7 Million in Sales, they are shipping 200+ orders daily.
Customers like the products they’re getting. The company’s branded Shopify website receives plenty of excellent 5-star reviews, and their Repeat Customer Rate just shot up to 20%. Their products are easy for customers to find, since the company uses Google Shopping ads to drive sales higher and is now enjoying a four-time return on investment on its ad spend.
Their customer demographics are solid: primarily women aged 50 and older, who have above-average income and plenty of disposable cash to spend. While their Average Order Value is $40, their Lifetime Customer Value is much higher at $100. It helps considerably that the market for home furnishings and outdoor items are both skyrocketing today, enjoying sharply rising profits. This is a vertical offering guaranteed to enjoy financial success in the future.
Business Broker Takeaway
Our analysis of this business revealed several key value propositions for a buyer looking for an online company operating profitably in fast-growing, evergreen verticals and with the ability to scale quickly. We anticipate buyers will recognize that value for 3 important reasons:
- High Recurring Revenue. A very attractive position for a buyer is the company’s steady and rising recurring revenue, which includes a growing percentage of repeat buys. Sales are impacted by seasonal factors but in a positive way. Because the company has so many SKUs, some products sell better in the summer months, others in the winter, etc., so the company is not reliant on just a few products to drive sales higher. The company also has plenty of evergreen products, so sales remain solid throughout the year. A buyer need only come in, enjoy that recurring revenue, and focus on growing the company.
- Automated Business. A buyer inherits a turnkey operation that does not require a major workload on their part. The current ownership works as little as 5 hours per week, focusing mainly on uploading new products and monitoring their Google ad campaigns. Most daily functions are handled by an experienced team that includes managers of operations, fulfillment, customer service, and product research.
- Growth Opportunities. Adding to their SKUs would be a simple but proven method for scaling quickly. The company could hire additional members of the product research team to locate more products in high demand with low competition. Expanding sales channels to include Amazon, Walmart, and other popular eCommerce platforms would also drive sales much higher, and so would launching an SEO program that fully optimizes the website for popular keywords in their verticals, and an informational blog on indoor and outdoor accessories.
Company Operations
Once they’ve researched and discovered products that are enjoying healthy sales, the company orders these SKUs from their supplier and gets them listed on their website. Google automatically puts each new item onto Google Shopping. The supplier stores their inventory and handles shipping. The packaging is uniquely designed for this company.
No single item dominates sales and the company has numerous popular items that make up between 10-30% of their gross revenue. The same is true for their Membership Program which continues to grow and attract newcomers.
Their Google ad campaigns have been a smart investment in expanding their customer base, particularly since Google continues to successfully refine how it finds new customers. The company has also created a solid foundation for this business, relying on the suppliers’ warehouse for stocking SKUs. The brand always maintains a month’s worth of inventory to keep up with orders. The supplier stores these products in their warehouse, free of charge.
Marketing
The company has so far relied 100% on its fully automated PPC ad spends on Google Shopping, along with meta ads used for retargeting people who visit their website but do not make a purchase.
The brand’s product team also researches the keywords that help rank the products they choose for high search engine visibility. This has given the company the ability to generate high organic traffic to its website, and it’s working since the company now gets a massive 300,000+ unique monthly visitors to its site.
There are additional digital marketing tools a new owner could use. The company boasts an impressive 100,000+ subscribers in their email database, which could be effectively used for a newsletter that focuses on promotions, special deals, and launching new products.
The company could also start its first social media marketing campaign, which could include selling its products on sites such as Facebook and Instagram. Additional popular platforms, such as eBay and Etsy, would also be ideal for many of their SKUs, while the launching of an Amazon platform would enable the company to apply its PPC ad strategy to that site as well.
A buyer should be able to quickly recognize this company’s many strengths: recurring revenue, a growing customer base, strong reviews, an effective marketing campaign, and plenty of viable scale options. Since the company’s research team has already demonstrated that its SKUs are in high demand, the brand’s future looks bright in the long term as well.
