FOR SALE: 14 Y/O Business Selling Private-Labeled, Organic Aromatherapy Candles & Sprays
Up for sale is a 14-year-old business that sells its own unique, trademarked brands (as well as private-labeled brands) of 100% organic aromatherapy candles and sprays. Without doing any advertising whatsoever, the business averages over $30,000 in net profit in years without significant private-label orders (like 2021) and closer to $50,000 in net profit in years with such orders (like 2020).
The business boasts an amazing 85.6% gross profit margin (i.e. revenue minus cost of goods sold) and an equally impressive 63.8% net profit margin (i.e. net profit after all business expenses). The owner estimates that she only spends about 6-8 hours per week running the business (almost all of which could easily be handled by an employee or contractor).
The business' revenue is diversified among 4 unique sales channels:
- Wholesale sales to a large distributor: 38% of revenue over the past 3 years
- Private-label orders by other retailers: 28% of revenue
- Wholesale sales to various retailers: 26% of revenue
- Retail sales directly to customers: 8% of revenue
Private-label orders (the business' #2 revenue source) are oftentimes quite large and are also fairly sporadic. The biggest private-label client typically places an order about every other year. The 2021 P&L, upon which the asking price is based, only includes ~$1,900 in private-label sales, whereas the year 2020 included ~$42,500 in private-label sales.
See the Sales Channels section below for more information.
Niche: 100% organic, chemical-free aromatherapy candles, massage candles and sprays (please sign the NDA below to see the domain name)
Store Model: Primarily B2B (92%) + limited B2C (8%)
P&L Period: Calendar year 2021
Business Age: ~14 years (launched in 2007)
Avg. Monthly Gross Revenue: $4,017
Avg. Monthly Net Profit: $2,561
Net Profit Margin: 63.8% of revenue
- Owner Time Requirement: 6-8 hours per week
Asking Price: $165,000
The seller's $165,000 asking price was calculated as follows...
Annual net profit (2021): $30,732
x 4.0x Annual Earnings Multiplier: $122,928
Plus: Approximate cost value of inventory: $45,000: $167,928
Rounded down to $165,000
As mentioned above, 2021 only included ~$1,900 in private-label sales, whereas the previous year (2020) had ~$42,500 in private-label sales. Had 2021 been a year where the biggest private-label client placed an order, the earnings multiplier would be closer to 3x.
P&L and Financial Information
Here is the accrual-basis P&L Statement for the year 2021. Click on the image to see a larger version of the P&L in a new tab.
The current owner will of course give the eventual buyer the opportunity to conduct extensive due diligence, including a live "screen-share" web meeting where you’ll be able to view reports and transactions in the store admin panel, payment accounts, Google Analytics, etc. to verify and confirm all of the figures shown in the P&L above.
In her own words, following is the owner's synopsis of how the business came to be:
About the Market & Products
The business sets itself apart by selling aromatherapy candles, massage candles and sprays that are 100% natural, organic, clean and safe. They have no synthentic fragrances, chemicals, dyes or materials of any kind.
Their candles are a 100% natural alternative to the toxin-filled candles on the market. They use 100% natural wax, cold-pressed straight from coconuts, and have no chemicals of any kind. This coconut wax is blended with only the purest essential oils and/or organic plant aromas. The candle wicks are textile-grade, lead-free, natural cotton. Each candle is hand-poured in small batches, ensuring the utmost quality.
The business operates within a growing and profitable candle market. U.S. retail sales of candles are estimated at approximately $3.2 billion annually, and the trends are leaning heavily towards the natural, organic niche. Consumers are becoming increasingly wise and health-concious and are demanding products that are healthier for themselves and the environment. With increased focus of mental health, mindfulness, meditation, and the like, the need for natural candles and massage oil candles will only become stronger.
The following Google Trends screenshot shows the search volume for the keyword phrase "aromatherapy candles" over the past 5 years in the USA:
In addition to aromatherapy candles, the business also sells a line of 100% natural massage oil candles used as a part of a multisensory spa experience. They are currently being bought by luxury spas, smaller day spas and private consumers for home use. According to the American Massage Therapy Association (AMTA), the massage therapy industry is an $18 billion industry and continues to grow. These all-natural massage candles have proven to be a favorite amongst spas and gift shops.
Here is the Google Trends report for the search phrase "massage candles" for the past 5 years (USA):
To see the business' websites (one for wholesale customers and one for retail sales) and the brand names and products it sells, please sign the NDA.
As introduced above, the business generates revenue through 4 distinct sales channels:
Wholesale sales to a large distributor (38% of revenue over the past 3 years): The business' #1 revenue source is wholesale sales to a large distributor in the industry who fell in love with the products way back in 2007 and has been buying & distributing them for the past 14 years. Over the past 3 years, sales have increased from $16.1k (2019) to $20.4k (2020) to $28.9k (2021).
Private-label orders by other retailers (28%): The 2nd biggest revenue source over the past 3 years is generated by private-labeling some of the business' products for other retailers. These orders are typically quite large and also tend to be fairly sporadic, with the biggest private-label client placing a huge order every other year (on average). The 2021 P&L (upon which the asking price is based) only includes ~$1,900 in private-label sales, whereas private-label orders generated $42,500 of revenue in 2020.
Wholesale sales to various retailers (26%): In addition to the main distributor that buys and distributes the business' products (in #1 above), there are a handful of small retailers that also buy and resell the products. Order range from several units (on the low end) to hundreds of units (on the high end).
- Retail sales directly to customers (8%): Despite the fact that the owner has never done any traditional or online advertising for the business, its Shopify retail website still generates a few thousand dollars of sales each year. Direct-to-customer sales have accounted for approximately 8% of revenue over the past 3 years, but this number could increase significantly by starting to advertise the products or sell them in online marketplaces (see the Growth Opportunities section below).
At its current revenue level reflected in the P&L above, this business only requires about 6-8 hours per week to run.
The owner typically spends 2-3 hours per week responding to emails, answering phone calls, ordering raw materials for the candles and sprays, maintaining the company's books and records, etc. She also spends around 4-5 hours per week on production (i.e. mixing the raw materials and pouring the candles) and preparing orders for shipment.
The vast majority of these tasks could easily be handled by an employee, staff member or contractor.
The owner will of course train the buyer (or the buyer's team) on how to handle all aspects of running the business, including ordering raw materials, mixing them, pouring the candles, and shipping out orders.
Top Growth Opportunities
Following are the top growth opportunities in the owner's own words:
Direct to Retail - Whole Foods, book stores and gift shops are other very good fits for our product lines. Our brand values fall in line with the Whole Foods market trends and offers a huge opportunity for placement within the nationwide grocer’s chain of stores. Bookstores and gift shops are also a very natural fit for our candles. Salons and day spas are also a good fit for our sprays, candles, and massage oil candles.
Expand Private Labeling - The opportunity for private label manufacturing is a great avenue for revenue. There are A LOT of companies looking for 100% natural candles and room sprays. Developing this sector of the business could be very lucrative. All of our current private label accounts reached out to us directly. If the new owner wanted to advertise, I believe it could draw a ton of interest. I believe co-branding with resort gift shops and resort spas would also be a good play. Also, co-branding or private labeling massage oil candles for spas and/or chains such as Massage Envy could be a great partnership.
Social Media, Social Media, Social Media! - There are huge opportunities with Instagram, Facebook and Tik Tok; I just haven't taken the time to explore them. Direct-to-consumer is a huge and untapped market, and [my brands] are anxiously waiting to be unveiled to the world. I feel there could be a very loyal following behind our brands with just a small amount of social media presence. Loyalty programs, newsletters, product reviews, refer a friend programs, etc. would be the first opportunity I would pursue.
Find New Customers Through Trendy Subscription Boxes - Subscription-based companies that send out monthly gift baskets and boxes could prove to be a great way to find new customers. Many of these trendy subscription boxes would match our brands perfectly. We've been contacted by companies like these in the past, but we haven't ever tried it. With our profit margins being as big as they are, I think this could be a great avenue to bolster our direct-to-customer sales.
Create Our Own Subscription Program - But why leave it to subscription box companies alone? Creating our own subscription program (direct-to-customer) would also be a very lucrative and easy way to generate passive income and loyalty. A quarterly or monthly candle subscription-based program could be a fun way to engage consumers and make a great gifting opportunity.
- Sell on Amazon and Other Online Marketplaces - An Amazon account is currently being set up by our distributor for our 2 brand names. They are currently onboarding all the products and then will be managing and fulfilling the site. It should be ready to launch soon. Additionally, the new owner could start selling our products on Etsy, Walmart Marketplace and other huge online marketplaces.
Included with the Sale
The sale includes all of the following...
- The domain names and websites (one for wholesale customers and one for retail sales), including all textual and graphical content
- 2 trademarked logos (for the 2 brand names)
- All inventory on hand (estimated to be around $45,000 at cost value), including raw materials and freshly-designed branded packaging
- All customer lists and email lists associated with the business (comprised of ~2,000 retail customers/opt-ins and ~500 wholesale customers/opt-ins)
- All social media accounts (Facebook, Instagram, etc.)
- All contracts and relationships with existing distributors, wholesalers, retailers and private-label clients
- 30 days of support to train you/your team on how to run the business, produce, package & ship products, and pursue growth opportunities
You can make an offer for this online business here. We will immediately present your offer to the sellers. If they accept 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 which time other interested parties may place a "back-up offer" in case the sale falls through for whatever reason). During this 10-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 meeting so you can review financial information, the store admin panel, payment accounts, Google Analytics, 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.
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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.