WebsiteClosers® presents a Manufacturer and Retailer of proprietary scented Wax Candles that they create in-house at their factory. The most novel aspect of the candles is that they’re designed to look like delectable desserts with a similar aroma, and the B2B sales have soared as their products have become popular gift-giving items, encouraging retailers to continue purchasing them in bulk orders to keep their buyers happy.
The company’s 70+ SKUs, manufactured and shipped from the company’s factory, now sell in bulk at an impressive $30,000 Average Order Value. Their customers include boutique shops, specialty stores and 50+ prominent retailers such as Paper Store, Meijer, and TJX. The candles can be found on the shelves in hundreds of big box stores across the nation. These retailers like what they’re getting, and this company has achieved a phenomenal 100% Repeat Customer Rate.
These rising sales have given the company 43% Net Profit margins, and in the past year, sales skyrocketed as the company enjoyed a remarkable 340% year-over-year growth spurt. The company is fully capable of handling increased orders since their factory can mass produce up to 5,000 candles a day at very low production costs. This fact alone has made this offering a delectable option, while the company’s rising revenue, growing customer base and affordable price points make this a shrewd long-term investment.
With its growing customer demand and proficiency in cost-effective large-scale production, the company has also become popular for using 100% all-natural ingredients, an appealing selling point among plenty of consumers, particularly eco-conscious buyers interested in sustainability and protecting the Earth. This has given the company’s reputation for solid green credentials.
This business represents a clear opportunity for a U.S. Buyer to acquire this company and then scale it quickly by establishing a direct-to-consumer channel, launching a more robust digital marketing strategy that includes an affiliates campaign, and expanding a successful kiosk program that this brand piloted in 2023.
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. We are excited about this business for 3 important reasons:
1. Unique Niche Products: Trademarked brand candles such as their Sundaes and Latte Dessert SKUs have won over buyers with their unique designs, and the candles are produced using high-quality ingredients from around the globe. Sold at retail prices between $10-$20, customers have embraced their SKUs as the ideal gift for any occasion, from birthdays to graduations to Christmas presents. Their candles have been featured prominently on social media, getting nearly 5 million views and thousands of likes, another clear indication of how popular they are.
2. Expansion Opportunities: The company has taken full advantage of every opportunity for strategic expansion. As orders increased dramatically, the company responded by utilizing PO and Invoice Factoring to keep up with demand. That enabled the company to grow its revenue significantly from $600,000 in 2022 to $2.6 million in 2023. All candles are produced at the company’s factory in Turkey, a highly automated and streamlined process capable of adding supplementary lines with minimal effort to increase their output. At least $100,000 worth of inventory is maintained so 2-3 shipments can be dispatched weekly from the company’s warehouse. A buyer can acquire the factory as part of the deal or purchase from it on favorable payment terms.
3. Growth Prospects: The current owners are exploring significant growth opportunities that could include opening a DTC sales platform on their website or Amazon, and launching new SKUs for upsells and cross-sells. In 2023, a Kiosk program was introduced to a local shopping mall, and it quickly took off and turned out to be a success. This is a model that could be replicated across the country in hundreds of other high-traffic malls, and the new owner could similarly take advantage of digital marketing tools such as social media and email marketing campaigns, an affiliates collaborative program, and SEO optimization of the website to boost sales considerably.
The Company
With their standout appearance that customers love and their in-house supply chains that eliminate the need for third-party suppliers, this company now enjoys vibrant sales throughout the year, with profits soaring during special occasions such as Valentine’s Day, Halloween, and Christmas. All products are maintained in stock with short lead times, and no single SKU dominates sales, which is why the company has been able to grow its product line successfully.
Most operations are handled by the current owner, including product creation, supply chain management, and sales. An experienced team assists in daily operations, including a full-time warehouse and operations manager, a part-time sales manager, and independent sales reps who make presentations on these products to retailers.
The company is now in negotiations for a huge number of new agreements with retailers that maintain more than 1,200 stores across the U.S., indicating these specialty SKUs are likely to become an even more prominent fixture in major retail stores in the future.
The reason this company’s future potential is so strong is that the groundwork has been laid for it to thrive moving forward, an excellent opportunity for an ambitious buyer looking for a business that produces specialized products.
The product demand alone is a strong indication of how quickly this company could grow with a DTC arm and a much more aggressive digital marketing campaign, particularly since specialty candles remain a popular and evergreen industry.
