Website Closers® presents a 7+ year Brand that has been riding the wave of new residential and commercial construction through their proprietary line of outdoor plastic drainage products, along with their stainless-steel linear bathroom drains.
This deal embodies the Goldilocks principle, combining the advantages of zero ad spend, high average order value (AOV), multiple sales channels, and established defensive moats to safeguard the brand during its ongoing development. This is that rare opportunity to purchase a business with a lower risk profile and higher growth potential.
They have an impressive 250 SKUs based within this market, which are not only proprietarily trademarked, but also patent protected, keeping their products safely off the rosters of their competitors. Their Average Order Value falls anywhere between $150 and $400, and they enjoy a healthy Growth Rate.
The company sells from a diverse lineup of sales channels, including an Amazon storefront, their own website, and major retailers, including Home Depot and Lowe’s. They use Home Depot distribution centers and their own warehousing to handle orders and ship about 60 orders per day and 4 to 8 DFC orders once a week. They also more actively used FBA for their orders in the past, but have pulled back from that in order to focus on creating a new Amazon account dedicated to the sole purpose of selling shower drains.
One of the most impressive aspects of the brand is that, despite their size and respectable major partnerships, their sales are 100% organic. The limited sales performance they have in place is a representative firm acting on their behalf for Home Depot and Lowe’s, who help maintain the partnership they have with these big-name stores, and an updated website with improved SEO marketing. They have also added a new Home Depot marketing tool to their top 100 SKUs, which will start in July 2023.
In the past, the current owners spent over 50 hours per week managing the business. When they made the switch to remote operations, however, they successfully whittled their workload down to around 15 hours every week. Their primary tasks are dedicated to purchasing stock, sales, marketing, product development, staff management, answering customer product questions, and processing returns for Lowe’s. If the buyer takes an interest in scaling, they could likely keep the workload low by hiring additional staff to manage some of these responsibilities, such as a customer service representative.
Outside of the owners, the company also maintains two employees, who are responsible for fulfilling daily orders.
The global drainage system market has experienced significant development in recent years, and projected to steadily grow thanks to an increase in home and commercial construction and remodeling. This puts this brand in a prime position to take advantage of this upward trend, and the right buyer can ensure that they use this momentum to soar to the top as the premier supplier of linear shower drains and outdoor trench drains. Thankfully, there are several scale opportunities available to the company that are waiting to be utilized with the right strategies.
Amazon represents an opportunity to further diversify sales, expand their reach, and bring in more consumers who are more interested in repairing and improving their homes and properties.
They could also continue the development of products for this newfound brand, which would make them all the more appealing to prospective buyers. This opportunity would be a great move for getting the new brand onto their feet, as their experience in selling exclusive, high-quality drains would help them create a product line that is more than likely to draw interest.
Further developing the relationships that the company currently has with Home Depot and Lowe’s would also be a smart move to make for the future. Though their partnership is already strong as it is, making steps towards making it even stronger would ensure that it remains beneficial long into the future, and possibly provides further benefits. For instance, a stronger bond with these new retailers could help their new shower drain brand get featured on retail shelves, improving their accessibility and overall profitability.
Their 100% organic marketing has also laid a great foundation for a possible paid advertising campaign. PPC on Amazon, Google, and Facebook would all do wonders in spreading brand awareness and publicity, increasing their consumer count and public awareness. It would also be especially beneficial for their new brand, as the fact that it was only recently established means that it has less of a reputation to work off of than the main business. A proper advertising campaign would be just what the company needs to reach a far greater level.
This remarkable acquisition offers a business that is well-established in a rapidly developing vertical and has set themselves apart with a line of reliable products that are exclusive to them and their brand. Their 100% organic traffic rate is promising for any future advertising campaigns that the buyer chooses to invest in, and clever planning can ensure that the workload stays low while profits skyrocket.
