Website Closers® presents an SBA-Preapproved, well-established eCommerce brand with over a decade’s worth of experience in the Online Rugs Industry. They have successfully capitalized on the niche, selling well known styles, including Braided, Bohemian, Farmhouse, Modern, Outdoor, Shag, Southwestern and Vintage. The company sources its products from six countries, giving them a wide range of styles, patterns, and materials to offer their customers, all at an affordable price. Their excellent business structure and first-rate rugs have earned them a 38% YOY growth rate and cemented them as leaders in their industry. The company has built up their number of SKUs to over 1,280, along with an astounding 88,100+ additional SKUs available for drop shipping, through a number of clever expansion and manufacturing strategies. Their international suppliers ensure that their product line is far more diverse than much of their competition, and keeps the quality of their rugs high. Additionally, they have also expanded outside of rugs into the Home Furnishing and Décor, and now also offer products such as figurines, coffee tables, planters, pots, and benches.
We have worked with our lending partners to obtain SBA Pre-Approval for this company. What this means to a buyer is that this business can be acquired for as little as 10% down for Qualified Buyers. The loan can be amortized over a 10-year period at historically low interest rates. Such an opportunity allows buyers that otherwise wouldn’t be able to get into a larger asset class access to this great business – it also offers the opportunity to achieve a ROI much faster due to the long amortization period.
The business has achieved a respectable Average Order Value of $84.54, and, thanks to their high level of customer satisfaction, they have attained a 98% Positive Lifetime Seller Rating on their Amazon.com storefront, along with countless positive reviews on their other platforms. Given that Amazon accounts for roughly 51% of the company’s sales, it’s a clear indicator that they have become a known, trusted source for fantastic rugs and other decorative pieces.
The global carpeting and rug market has provided the brand with a strong foundation to work off. In 2020, it was worth 32 billion USD, and it’s expected to grow to 38.8 billion USD by 2026, growing at a CAGR of 3%. Rugs are always in demand for how well they can tie a room together, the fact that they can protect the flooring in places with heavy footfall, and, depending on the material, can resist stains and last years in a household.
The company has been able to keep up with consistent demand through its hybrid inventory model that includes stocking high margin / high volume products and drop shipping others to keep the product array large. This mix allows them to fulfill orders timely. About 74% of SKUs are stocked at Amazon using their Fulfilled by Amazon warehouses in order to offer Prime Shipping capabilities for Amazon members. Roughly 26% of their inventory is drop shipped. The company handles 220 shipments on an average day, and nearly double that during their peak seasons of the fourth quarter and holidays. They rely on a variety of sales channels to bring in their income. Along with their popular Amazon storefront, they also sell from their official Shopify website, Wayfair, Walmart, and Etsy, among several others.
These channels could be expanded even further by expanding into international markets, including Amazon’s Canada and European platforms. They could also target their wholesale and B2B sales to local and regional furniture stores, which would let them secure strong relationships with other businesses and improve their position in the general wholesale market.
They have benefited from a strong marketing strategy, which relies heavily on a smart mix of PPC advertising and email marketing. They run their PPC ads on Amazon, Google, and Pinterest, which are not only popular websites, but, in the case of Pinterest and Amazon, are also often used for people who are already planning their décor for their home. Meanwhile, their email marketing campaign utilizes nearly 20,000 contacts to send out newsletters, which keeps subscribers informed, and encourages them to make new purchases and take advantage of special offerings.
The company generates organic traffic through their presence on various social media websites. On Pinterest, they have nearly 1,000 followers, and over 400,000 monthly views on average on their products. The are also on Facebook and Instagram. A buyer could use more aggressive social media strategies to grow these accounts, which, given their impeccable reputation among customers, should be very easy to manage.
The steady demand in the rug and furniture industries means that, by adding new products or expanding into adjacent verticals, they could rapidly scale their business. They could also increase their dropship business by adding onto their current 30 vendors and building up strong relationships with new, lucrative manufacturers. Doing this would make adding more types of products, or more products in general, a much simpler process, and let the brand occasionally change up their offerings to keep things fresh for their customers.
The brand has cemented itself as a true giant in its industry. It has more SKUs than many other businesses could hope to achieve, a fantastic reputation among its customers, and a diverse selection of manufacturers from all around the world. Its new owner has a plethora of opportunities and scale potential at its disposal, and, if they have the right know-how, could seize them to expand the business far beyond its current size.
Contact Website Closers today if you’d like to hear more about this acquisition, and how you can take advantage of all its remarkable opportunities.
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