FOR SALE: Auto Parts & Accessories Dropship Ecommerce Business
Averaging $11,413 Net Profit / Mo
Up for sale is a 100% drop-shipping based eCommerce business that is trending upward and poised for continued profitability and growth in 2020 and beyond. Over the past 12 months (Feb 2019 - Jan 2020), the business has averaged $70,657 in revenue and $8,923 in net profit per month. But over the most recent 6 months (Aug 2019 - Jan 2020) that is much more representative of the current state of the business, it's averaged $89,457 in revenue and $11,413 in net profit per month.
The store sells various aftermarket auto parts and accessories. Every item in the catalog is drop-shipped directly to the customer, so there's no need to pre-purchase large quantities of products, stock/warehouse inventory, or deal with shipping out orders.
The current owner recently bought into an event production business, which has started to take off and is consuming more and more of his time. He is selling this auto parts business to free up more of his time to focus on his other business.
- Niche: Auto accessories (please sign NDA to begin due diligence & get additional information)
- Store Model: 100% dropship eCommerce
- P&L Period: Aug 2019 - Jan 2020 (trailing 6 months)
- Store Launch Date: Sep 2017
- Avg. Monthly Gross Revenue: $89,457
- Avg. Monthly Net Profit: $11,413
- Net Profit Margin: 12.8% of revenue
- Owner Time Requirement: 20-25 hours per week
Asking Price: $410,000
The seller's $410,000 asking price was calculated as follows...
x 36 Months (3.00 Annual Earnings Multiplier): $410,868
Rounded Down to: $410,000
P&L and Financial Information
Here is the Profit & Loss Statement for the trailing 12-month period February 2019 - January 2020. (Click on the image to see a larger version of the P&L in a new tab.)
As you can see in the P&L above, the store has averaged monthly revenue of $89,457 and monthly net profit of $11,413 over the past 6 months. Net profit has continued to steadily climb over the past year, as you can see in the line chart below.
One thing you'll notice about the P&L is that there are virtually zero marketing expenses. This is because virtually all of the business' sales are coming from a shopping marketplace similar to Amazon (but not Amazon). So instead of shelling out a ton of money for paid advertising, the business pays a fixed low commission to this shopping marketplace for each sale. This commission is included in the 'Merchant & Selling Fees' line item in the P&L.
The current owner will of course give the eventual buyer the opportunity to conduct extensive due diligence, including one or more live "screen-share" web meeting(s) where you’ll be able to view reports and transactions in the business' admin panel, payment accounts, bank account, etc. to verify and confirm all of the figures shown in the P&L above.
About the Niche & Suppliers
As noted above, the store sells various types of aftermarket automobile parts and accessories. The store's catalog is very large (about 184,000 SKUs from dozens of different suppliers), but it's very easy to manage because of the product data feed file the current owner has already built (which is of course included in the sale).
For the benefit of the eventual buyer, the specific products the store sells as well as the domain name of the site will only be disclosed to serious potential buyers who first sign an NDA (which you can do electronically below).
100% of orders are drop-shipped from US warehouses. The business has 4 distributor partners with a total of over 120 warehouses across the USA. When an order comes in, the owner simply copies & pastes the order details into the online portal of the wholesale distributor of his choosing (based on each of the 4 distributors' total delivered cost). All 4 distributors use online portals for ordering, and they all have state-of-the-art processes in place and very low mis-ship rates. (Note: If a part happens to be out of stock with all 4 of the distributors, the business is typically able to drop-ship the item directly from the manufacturer for a small fee. This allows flexibility in the business' product listings and sets them apart from its competitors.)
The majority of orders ship out the same day the order is placed and arrive within 2-3 days, thanks to the distributors' combined 120+ warehouses across the country. Where customers' expectations are 5-7 days for delivery, the business consistently under-promises and over-delivers customer, resulting in a sky-high customer satisfaction rating.
As mentioned above, this store is 100% drop-shipping based, meaning that the suppliers ship products directly to the customers. This means that you do NOT have to pre-purchase large quantities of inventory, store products in a warehouse, or manually ship out orders yourself. When an order comes in, the supplier ships the order directly to your customer. Dropshipping is hands-down the easiest store model and completely eliminates the need for working capital as well as the risk of not being able to sell large stocks of inventory you've pre-purchased.
Marketing and Traffic
As was mentioned above, virtually all of the business' sales are coming from a shopping marketplace similar to Amazon (but not Amazon). The business does have a stand-alone website, but it's really more of a corporate website for branding and credibility purposes.
Over the past couple of years, the business has built up an amazing relationship with this shopping marketplace partner and is now their preferred automotive partner. As the marketplace's preferred automotive partner, the marketplace gives them "first dibs" on every auto-related order placed in the marketplace (even those that were generated from one of their competitors' product listings), which they have the option of accepting or declining. It's an absolutely ideal relationship (which will of course transfer to the new owner) and makes this business incredibly valuable.
Please note: As this relationship is so crucial to the business, for the benefit of the eventual buyer, details about this shopping marketplace partner will not be disclosed until a Letter Of Intent (LOI) has been submitted and accepted by the seller.
The current owner estimates that he spends 20-25 hours per week running the store at its current operating level reflected in the P&L above. Here's a list of the tasks the current owner performs each week:
- Process orders (14-16 hours per week)
- Customer service (2-4 hours per week)
- Market research & pricing analysis (2 hours per week)
- Update product feed file (1 hour per week)
- Accounting and bookkeeping (1 hour per week)
As you can see from the list of tasks the owner is performing each week, many of these sources (comprising most of the time) could very easily be handled by a Virtual Assistant (VA), contractor or employee.
- Expand the Product Feed File - There are literally tens of thousands of additional products available through the existing 4 distributors that could be added to the product feed file. Adding these additional products would almost certainly lead to more sales, as it's really just a numbers game. This is a one-time task that would benefit the business for years to come. The current owner just hasn't been able to find the time to do it (he estimates ~80 hours of work) since he originally completed the ~184,000 product feed file.
- Sell in Additional Marketplaces - Currently, all sales are being driven from a single marketplace. With the existing supplier relationships and product feeds that have been created, listing in additional marketplaces could double, triple or quadruple sales (or more).
- Remarket to Past Customers - The current owner doesn't have any experience with remarketing or email marketing, so the customer list/data is currently just sitting there going unused. Given the fact that the customer list contains information about what automobile each customer drives (based on the specific part(s) they ordered), remarketing to these customers could be highly effective and drive additional sales and profits.
- Re-Build the Stand-Alone Website - The current website (built on the Wix platform) is just a storefront for the marketplace customers to acknowledge the existence and credibility of the business. It's not currently built to allow customers to place orders. If customers could actually place orders on the stand-alone website, you could more effectively cross-sell and upsell marketplace customers once they landed on the website.
Included with the SaleThe sale includes all of the following...
- The domain name and website (including all textual and graphical content)
- The marketplace account
- All 4 supplier accounts with the wholesale distributors
- The ~184,000-product data feed file (which the owner spent hundreds of hours creating)
- All social profile accounts associated with the business
- All customer lists associated with the business
- 30 days of support to train you/your team on how to run the business, manage the ad campaigns, etc. (first 30 hours via phone or live webinar/screen share then Skype/email support after that)
- Note : The seller will certainly sign a non-compete as part of the purchase & sale agreement.
You can make an offer for this highly profitable eCommerce 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 10-day due diligence period will begin. During this 10-day period, we'll work closely with you and with the seller to help you complete due diligence. Among other things, this will include doing one or more live screen-share web meeting(s) so you can review financial information, the marketplace admin panel, payment accounts, sales reports, supplier 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.
Option to "Buy and Outsource"
If you're interested in acquiring this business (either on your own OR as part of a group) but don't have the time, desire or know-how to handle the day-to-day operations yourself, use the Ask a Question box below to learn how you can outsource 100% of the day-to-day operations to a full-service eCommerce operations company for a very reasonable operating fee . This allows you to reap the financial benefits of owning (or co-owning) a "cash cow" Internet business like this without having to operate it yourself. By outsourcing 100% of the day-to-day operations, you can own (or co-own) this business completely passively.
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Disclaimer: Store Coach, Inc. is acting as the broker of the sale of this website/business and is merely presenting figures and information provided by the website/business owner. The website/business owner is solely responsible for all financial figures, statements, claims and information provided on this page as well as all financial 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 financial figures, statements, claims and information provided by the website/business owner.