Website Closers® presents a well-established eCommerce Brand that takes pride in offering a diverse range of high-quality hand tools and PPE from brand-name manufacturers, many with lifetime warranties and proudly Made in the USA, ensuring reliability amidst supply chain challenges.
The company’s decade-long commitment to building a robust online presence has made it a leading source for industry-required items. Since its inception, management has prioritized personalized service by forming lasting relationships with both customers and suppliers. Unlike other fulfillment centers, the brand has become recognized as a trusted advisor, providing valuable insights and recommendations and even crafting kits tailored to customers’ unique needs.
Business Broker Takeaway
Our analysis of this business shows that the value propositions present are strong for a first-time buyer looking to get into the online space as well as for a buyer already in this or a parallel sector, looking for a strategic acquisition opportunity. We are excited about this business for three important reasons:
The brand has demonstrated robust year-over-year growth and boasts multiple sales channels, including its highly-optimized website, as well as Amazon and eBay storefronts, which account for 34%, 61%, and 5% of revenue, respectively. This approach reduces reliance on any single platform and facilitates reaching a broader audience.
Management has strategically targeted key industries, including construction, trades, agriculture, DIY, aerospace, government, oil and gas, railroad, and manufacturing. By doing so, they have captured individuals and enterprises with recurring needs and marketed to them to secure ongoing business. Subsequently, the 20% Repeat Purchase Rate accounts for 45% of revenue, reducing Customer Acquisition Costs and boosting profitability.
The company has obtained SBA-Approval, offering eligible buyers the opportunity to acquire it with a nominal down payment and amortize the loan over an extended period, benefiting from a minimal interest rate.
Inventory and Sourcing
A vast catalog comprising 40,000 SKUs is sourced directly from the manufacturers that the brand represents. Importantly, there is no concentration of sales on any product or category, evidenced by 70% of income derived from 900 SKUs. All manufacturers have offices or distribution centers in the US and a lead time of 3 days or fewer for expedient stock replenishment.
A hybrid inventory model maximizes profitability, with the highest-moving items maintained at the company’s 1,700-square-foot warehouse and others requested on demand. Management places orders daily for optimal cash flow and swift fulfillment. The business holds approximately $100,000 of stock and enjoys favorable NET30 terms with its suppliers. On average, 190 orders are shipped daily.
The brand experiences minimal seasonal fluctuations in sales due to its diverse product range. Tool offerings are popular throughout the year, for example. At the same time, certain safety items, such as cooling towels and shirts, are sold primarily in spring and summer but balanced out by jackets and face liners that are predominantly purchased in winter.
Marketing & Customer Base
A multifaceted digital marketing approach comprises PPC advertising on Google and Bing, organic social media, segmented email campaigns, and strong SEO. All are geared toward attracting one of three customer categories:
DIY Consumers. These enthusiasts are typically hobbyists and have a home workshop. Their orders are generally below the free shipping threshold of $199, enabling the company to profit from delivery, and they are a respectable source of referrals.
Designated Buyers for a Company. This group is driven to the products via search engines and purchases for their work using personal credit cards. They submit expense reports for reimbursement, strive to exceed the free shipping threshold, and return repeatedly.
Business Customers. Comprised of either trade professionals using the products or resellers, business customers require goods on a recurring basis, have a higher AOV, and reorder based on production schedules.
Personnel & Scale Opportunities
The two owners run the business. One manages operations, accounting, and marketing, while the other focuses on IT and customer service. An additional employee has warehouse duties and handles product listings. PPC management, social media, and email campaigns are outsourced.
Various avenues have been identified to scale the company considerably.
The sellers are committed to expanding their manufacturing partnerships, aiming to secure contracts with eight new manufacturers by 2025. Furthermore, they plan to enter the automotive and electrical contractor markets by onboarding two prominent brands.
To increase visibility and engagement, enhancing the brand’s social media presence and launching aggressive ad campaigns is low-hanging fruit. Leveraging platforms such as Instagram, Facebook, and LinkedIn will facilitate direct engagement, while collaboration with influencers, especially on YouTube, will amplify brand messaging across various channels.
Product diversification is also a priority for the company. Plans are afoot to add a renowned US manufacturer of tools to its portfolio that will offer customers a wider selection of high-quality products. Finally, despite a reduced emphasis on eBay, automating the listing process can revitalize this channel’s potential.
