WebsiteClosers® presents a B2B eCommerce Brand in the Nutritional Supplements and Snack Foods Verticals. They have gained a competitive edge through the development of a sophisticated line of high-demand products. Their attention to detail on product development has resulted in a low concentration risk factor and a high Repeat Order Rate exceeding 70% … a level unheard of in most CPG brands.
Ingredients are sourced from a network of 10+ trustworthy suppliers, with whom the company has built strong relationships. The company then processes their products through their in-house manufacturing arm, ensuring a thorough level of quality control that has won over 500+ loyal wholesale accounts.
The brand has strengthened their B2B appeal by offering white labeling services, allowing customers to sell the company’s high-quality products under their own branding. While most of their sales are wholesale, 2% of the mix is generated by their small, yet enthusiastic, D2C following.
The dedication of their consumer base has led to strong revenue growth, a 38% YOY SDE growth trend, and 18% net profit margins.
Business Broker Takeaways
1. Comprehensive Operations. The company’s operations are highly efficient, with strong supplier partnerships guaranteeing competitive pricing and a reliable supply of key ingredients and packaging materials.
While the company recently made a bulk order to cover 3 to 4 months in inventory, they usually order certain ingredients every 2 to 4 weeks. 100% of their inventory is held in two 1,800-square-foot facilities, and they handle their inventory management process with the help of advanced tools such as Katana MRP.
2. Dedicated Team. The brand employs a team of roughly 10 full-time staff members, which includes a production manager with 7 years of experience.
During peak periods, such as after trade shows, the company also typically brings on about 5 to 10 more staff members for production. This team works in 2 offices, with the first dedicated to production and shipping while the second is used for sales.
Current ownership spends an average of 3 to 4 hours per day meeting with managers and their assistants, reviewing emails, and calling on certain wholesale accounts.
3. Scalable Marketing. The brand’s current marketing efforts combine magazine ads, tradeshows, cold calling, and social media. As this advertising plan is straightforward, a buyer could quickly begin scaling the company by investing in additional marketing efforts.
Scale Opportunities
The brand is already showing steady growth and strong YOY growth rates, with the seller anticipating that, as they add new SKUs and wholesale accounts, their growth will continue. An enterprising entrepreneur can take advantage of this trend and, through the right scale opportunities, take the company to the next level of growth.
For instance, a buyer could keep track of the latest trends in the market and release new products to meet demand. From there, they could promote these products to new and existing customers through additional marketing and upselling strategies. They could also allow other companies to private label their products, which would strengthen their appeal among wholesale customers.
Another tactic the new owner could take would be expanding the company’s operations by adding additional manufacturing equipment. The brand is already planning to move to a warehouse with more office and warehousing space, and as they could also expand to a 3,000-square-foot space, new equipment would allow them to fully utilize the space, refine their manufacturing process, and more easily scale.
Conclusion
The company operates in an evergreen industry and is well-positioned to take advantage of new trends while maintaining the high quality they’re known for. They have a great foundation for their products, and outside of knowing how to manage systems and conduct sales, a buyer will need no special skills to run the business.
A bank financing option is available for this deal, which will allow a buyer to quickly get to work post-purchase.
