SOLD: 9 Y/O Lamps & Home Decor Dropship Ecommerce Store
SOLD: 9 Y/O Lamps & Home Decor Dropship Ecommerce Store
Up for sale is a 9 year-old dropship eCommerce store with a long track record of continuous profitability. The store sells a wide variety of high-end lamps (including table lamps, bedside lamps, floor lamps, etc.) and a handful of related home decor items (such as wall art, wall mirrors, wall sconces, etc.). Over the past 12 months (May 1, 2017 - April 30, 2018), the store has generated over $100,000 of revenue and over $30,000 of net profit, averaging $2,528 net profit per month. The store's gross profit margin (after COGS, shipping and merchant fees) is a very robust 36.5% of revenue. The store's net profit margin after all expenses is an impressive 304.4%. The site ranks on Page 1 of Google for 297 search phrases, which are collectively searched for about 47,000 times per month in Google, driving A LOT of free organic traffic to the store each month. Many of these are top 3 rankings, as you'll see in the Rankings and Traffic section below. All in all, the store averages 3,275 unique visitors per month (an average of 108 visitors per day). Over the past 12 months, the store processed 166 orders with an Average Order Value (AOV) of $613.28. With a gross margin of 36.5% (after COGS, shipping and merchant fees), this means the average order generates $223.85 of net profit. Not only does this mean you have a large profit margin to work with in PPC advertising, but it also means you don't have to process very many orders each month to generate a healthy profit. On average, the owner only has to process ~14 orders per month. She currently spends about 15 hours per week operating the store. The owner, who is a long-time member of Store Coach, is selling the store because she recently landed a full-time job in the field in which she got her college degree, and she wants to devote all of her work-related time and energy into her new career.
- Niche: Lamps and other home decor items (sign NDA for more info)
- Store Model: 100% dropship eCommerce
- P&L Period: May 2017 - April 2018 (12 months)
- Avg Monthly Gross Revenue: $8,484 ($101,804 annual)
- Avg Monthly Net Profit: $2,528/month ($30,338 annual)
- Net Profit Margin: 30.4% of net revenue
- Page 1 Google Rankings: 297 keyword phrases collectively searched for 46,990 times per month
- Average Order Value (AOV): $613.28
- Monthly Visitors: 3,275 per month (108/day)
- Age of Site: 9 years old
- Time Requirement: ~15 hours per week at the current revenue/profit level
ASKING PRICE: $90,000
The seller's asking price for this store is $90,000. Here is how the asking price was calculated...
May 2017 - Apr 2018 Net Profit: $30,338 x Annual Earnings Multiplier: 3.00 Equals: $91,015 Rounded Down To: $90,000
P&L Statement and Financial Information
Following is the P&L Statement for the most recent 12-month period May 2017 - April 2018. (Click the P&L image to open a full-size version in a new tab.)
Following is a quick summary of the key numbers from the P&L...
- Avg Monthly Net Revenue (after refunds): $8,329
- Avg Monthly Cost of Goods Sold (including shipping): $4,925 (59.1% of net revenue)
- Gross Profit (after COGS, shipping & merchant fees): 36.5%
- Avg Monthly Net Profit: $2,528 (30.4% of net revenue)
The current owner will of course give the eventual buyer the opportunity to do a live "screen-share" web meeting and jump into the store admin panel, payment accounts (Authorize.net), Google AdWords account, etc. to verify and confirm all of the figures shown in the P&L above. (Also, after you sign the NDA below, you'll be given access to the "Due Diligence Package", which includes reports from BigCommerce, Google Analytics, Google AdWords and more.)
About the Niche & Suppliers
As explained above, the store sells a wide variety of high-end lamps (including table lamps, bedside lamps, floor lamps, etc.) and a handful of related home decor items (such as wall art, wall mirrors, wall sconces, etc.) The domain name of the site will be disclosed only to serious potential buyers who first sign an NDA, which you can do electronically here. The demand for the product line is extremely stable, as you can see from the following Google Trends screenshots of 4 representative keyword phrases (which show search data for the United States over the past 5 years)...
The product catalog currently contains just over 3,000 products, and the owner estimates that an additional 1,000+ products could be added (just from the existing reseller accounts). The store has 9 supplier accounts set up, but the vast majority of sales (representing ~95% of orders/revenue) are attributable to the top 3 suppliers. The seller will assist the buyer with either taking over her existing reseller accounts with each of the suppliers or with providing personal introductions to assist the buyer with setting up new reseller accounts (if the supplier doesn't allow the buyer to just take over the existing reseller account). The products range in price from about $180 up to $600, with many customers ordering two or more items. Over the past 12 months, the store had 166 orders. Thus, the Average Order Value (AOV) was $613.28, calculated as $101,804 gross revenue divided by 166 orders. Given the store's gross profit margin of 36.5%, the average order generates $223.85 of net profit.
Rankings and Traffic
The site has A LOT of Page 1 rankings and consequently gets A LOT of free, organic traffic from search engines (primarily Google, but also Bing and several other search engines). In fact, approximately 73% of the site's traffic is organic. The following table shows rankings data from SEMrush.com as of the listing creation date:
|Rank in Google||# of Keyword Phrases||Combined # of Monthly Searches|
The "Due Diligence Package", which you'll receive after you sign the NDA below, contains the SEMrush.com rankings report for the site, from which the above data was derived. Here's a screenshot from Google Analytics that shows the store's organic traffic trend over the past year (May 2017 - April 2018).
While rankings-based "Organic Search" traffic is the #1 traffic source for the site (accounting for 72.9% of total traffic), it's not the only way the current owner drives visitors to the store. Direct traffic (i.e. people who know the site's domain name and navigate directly to the site, likely because they've visited the site and/or placed an order in the past) accounts for a remarkably high 16.3% of total traffic. The current owner also uses Google search ads to drive additional targeted traffic to the store. Paid advertising accounted for just 4.3% of total traffic over the past year. Here's a screenshot of the Google Analytics Acquisition Overview report, which shows the breakdown of total traffic over the past year (May 2017 - April 2018).
Here are a handful of additional key takeaways from the above Google Analytics report:
- The site has had 39,300 visitors over the past year (which is an average of 3,275 visitors per month, or 108 visitors per day).
- The store's bounce rate of 49.5% is remarkably low for an eCommerce store. Most online stores have a bounce rate in excess of 60-70%.
- The average visitor spends 3:38 on the site and views 4.48 pages. These are extremely strong user metrics.
Here's the same report for the past 3 years so you can see the 3-year traffic trend.
The owner typically spends ~15 hours per week running the store (at its current operating level reflected in the P&L above). Here's a list of the core operating tasks she performs...
- Processing Orders - When a new order comes in, she forwards the order information on to the appropriate supplier. Then, once the supplier notifies her that the order has shipped, she updates the order status in the store admin panel and forwards the tracking information to the customer.
- Customer Service - This includes responding to emails (mostly using templated emails), taking (and returning) phone calls, live chatting with customers (occasionally), processing occasional refunds, etc. Also, the site offers a free "visualization service" where the customer can send a photo of the room/space they're planning to place the mirror, lamp or other item, and the store owner then uses software to overlay the product image onto their photo to help the customer visualize how it will look.
- Writing New Articles or Blog Posts - The current owner has historically written a lot of unique content for the site, which has no-doubt helped the store achieve the organic rankings it has.
- Managing the Product Catalog - This includes researching and adding new products, updating stock statuses, updating pricing (occasionally), etc.
- Analyze and Tweak PPC Ad Campaigns - Every month or so, it's a good idea to spend a few minutes analyzing the PPC campaigns' performance and modifying them as needed.
- Bookkeeping - The necessary evil. :-)
Following are top handful of growth opportunities to take this store to the next level...
- Expand PPC Marketing - As you can see in the P&L, the current owner is only spending ~$103 per month on paid advertising, and she is exclusively running Google search ads. In addition to increasing the monthly ad spend (particularly for high-performing keyword phrases), it would be wise to try out various other forms of paid advertising, including: Google shopping ads (also known as Product Listing Ads, or PLAs), Google remarketing ads, Google Bing shopping ads (PLAs), Bing remarketing ads, Bing search ads, Pinterest ads, Facebook/Instagram ads (including re-targeting ads), and more. As mentioned above, the average order generates $223.85 of net profit. This gives you A LOT of margin to play with, making this a huge growth opportunity!
- Update & Expand the Product Catalog - As mentioned above, the current owner estimates that there are ~1,000 products available (from existing suppliers) that could easily be added to the site to expand the catalog. This would no-doubt increase the likelihood of customers finding exactly what they're looking for, thereby increasing the conversion rate and profits.
- Perform SEO on "On-the-Verge" Keyword Phrases - As noted in the Rankings and Traffic section above, the site has A LOT of Page 1 rankings in Google. The 54 keyword phrases for which the site ranks in the top 3 account for the majority of the free, organic traffic the site gets. Just imagine how much more organic traffic the site would get if the 95 keyword phrases for which the site currently ranks 4th - 6th (which are searched for 14,600 times per month) were moved up to be top 3 rankings! Or imagine if the 148 keyword phrases for which the site currently ranks 7th - 10th (which are searched for 27,650 times per month) moved up to be top 3 (or top 5) rankings. Then there are an additional 470 keyword phrases (which collectively get 97,280 searches per month) for which the site currently ranks on Page 2 of Google (11th - 20th). A little SEO effort could go a long, long way as slight rankings improvements could sky-rocket traffic!
- Send Out More Regular Emails/Newsletters to Customer List - The owner hasn't been all that consistent with sending out regular newsletters to the 1,700+ person customer list. Doing a better job with this would no doubt increase sales, especially if coupon/promo codes were offered. While this store's product type isn't a "consumable" that customers will need to re-order several times a year, it is certainly the type of product that satisfied past customers would likely want to purchase again.
Included with the Sale
The sale includes all of the following...
- The domain name and website (including all textual and graphical content)
- Transfer of all supplier accounts (or introductions and assistance setting up new accounts, if applicable)
- All social profile accounts associated with the website
- The customer lists (comprised of 1,700+ past customers)
- 30 days of support to train you/your employee on how to run the business, place orders with suppliers, maintain the store, etc. (first 10 hours via phone or live webinar/screen share, then Skype/email support after that)
You can make an offer for this store here. We'll immediately present your offer to the seller. If he accepts your offer, we'll notify you immediately and update this page to let other interested parties know that an offer has been accepted. Once your offer is accepted, a 3-day due diligence period will begin (during which time other interested parties may place a "back-up offer" in case the sale falls through for whatever reason). During this 3-day due diligence period, we'll work closely with you and the seller to help you complete due diligence. Among other things, this will include doing a live screen-share web conference meeting so you can review financial information, the store admin panel and sales reports, traffic reports in Google Analytics, the supplier accounts and invoices, etc. We'll also send you the Asset Purchase Agreement (APA) for you to review. Once the APA is signed and the sale is completed, we will update this page to let other interested parties know that the sale has been finalized and remove this listing from the Store Coach Website Marketplace.
Disclaimer: Store Coach, Inc. is acting as the broker of the sale of this website/business. The website/business owner is solely responsible for all figures, statements, claims and information provided on this page as well as all figures, statements, claims and information which may be provided to interested parties during the due diligence process. It is the responsibility of the eventual buyer to review and verify all figures, statements, claims and information provided by the website/business owner.
TABLE OF CONTENTS
- P&L and Financial Information
- About the Niche & Suppliers
- Rankings and Traffic
- Store Operations
- Growth Opportunities
- Included with the Sale
- Buying Process
- Submit an Offer or Inquiry
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