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FOR SALE: $2.6 Million Revenue Dropship Ecommerce Business

Business Overview

Here are the top 10 things you need to know about this business...

  1. It made over $459,000 of net profit (after all expenses) over the past 12 months. That's an average of $38,252 net profit per month!

  2. Revenue has continued to trend upward over the 2 years since the business was launched. Check out the trend line on this monthly revenue line chart...

    Monthly Revenue Trend (Feb 2020 - Jan 2022)
  3. The business is far and away the web's #1 seller of the brand of products it sells. Furthermore, the manufacturer is willing to grant exclusive rights to the brand/products with a sizable bulk purchase.

  4. The business has a huge (an active) social following and customer list. Its Pinterest page gets over 10 million monthly views, and its Instagram page has over 60,000 followers. The business has about 102,000 email subscribers, 68,000 Facebook Messenger subscribers and 23,000 SMS text subscribers.

  5. The products have a 50% gross profit margin (even after shipping), meaning they sell for almost exactly 2x what they cost. This leaves a lot of room for advertising.

  6. Over the past year, approximately 24% of orders were placed by returning customers who had already ordered products in the past.

  7. The vast majority of ad spend is managed by a third-party ad management company. You could instantly increase the annual net profit by $38,000 if you were to bring ad management in-house.

  8. Virtually all of the day-to-day work is handled by a small team of Virtual Assistants (VAs), all of whom are willing to stay on for the new owner. This means you (the owner) only need to put in ~20 hours per week to run this multi-million-dollar business!

  9. The business utilizes a wide variety of advertising channels and has a well-diversified marketing strategy. This includes an affiliate program, pay-per-click ads (Google, Microsoft, Facebook, Instagram, Pinterest, etc.) and using micro-influencer marketing. Over the past 8 months (since Facebook's major ad changes), the business has steadily maintained around a 4.25 ROAS (Return On Ad Spend).

  10. Very little money is tied up in inventory. The business typically only has $5,000 to $8,000 worth of inventory at Amazon FBA warehouses. All other orders are drop-shipped directly to customers. What's more, orders are shipped from multiple fulfillment centers throughout the world (including the United States, Europe and Asia), which ensures fast delivery times worldwide.

The owner is looking to sell the business because he is actively investing in real estate, which has been a lifelong passion for him. The proceeds from the sale would allow him to acquire several properties and take his real estate investment & development career to a new level.

Key Information

  • Niche: Please sign the NDA to begin due diligence & get additional information
  • Store Model: Dropship with minimal Amazon FBA
  • P&L Period: 12 months ended January 2022
  • Business Age: ~2 years (launched in February 2020)
  • Avg. Monthly Gross Revenue: $220,356
  • Avg. Monthly Net Profit: $38,252
  • Gross Profit Margin: 49.9% of revenue
  • Net Profit Margin: 17.4% of revenue
  • Owner Time Requirement: ~20 hours per week

Asking Price: $1,610,000

The seller's $2.3 million asking price was calculated as follows...

Trailing 12-Month Net Profit (Feb 2021 - Jan 2022): $459,025
x 3.5 Annual Earnings Multiplier: $1,606,587
Add Inventory Value: ~$6,500 (on average)
= $1,613,087
Rounded down to $1.61 Million


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    P&L and Financial Information

    Here is the accrual-basis P&L Statement for the 12-month period February 2021 - January 2022. Click here (or on the image itself) to see a larger version of the P&L in a new tab.

    P&L Statement (Feb 2021 - Jan 2022)

    Following is a screenshot of the 'Financial summary' report from Shopify that shows total Shopify revenue of $2,542,102 for the 12 months (which ties to the P&L above):

    Shopify Financial Summary (Feb 2021 - Jan 2022)

    The following screenshot of the 'Ecommerce Overview' report from Google Analytics further substantiates the Shopify revenue figure:

    GA Ecommerce Overview (Feb 2021 - Jan 2022)

    And here are screenshots of the 'Date Range Reports' from Amazon USA (in USD), Amazon Canada (in CAD - average exchange rate of 0.795) and Amazon Mexico (in MXN - average exchange rate of 0.049), respectively:

    Amazon USA Report (Feb 2021 - Jan 2022)

    Amazon Canada Report (Feb 2021 - Jan 2022)

    Amazon Mexico Report (Feb 2021 - Jan 2022)

    The current owner will of course give the eventual buyer the opportunity to conduct extensive due diligence, including live "screen-share" web meetings 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.


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    About the Niche & Products

    The business sells a small, ultra-portable version of a type of product that has been around for quite a long time (along with various accessories for those products, including consumables that need to be re-ordered over and over again over time. As you can see in the Google Analtyics 'Ecommerce Overview' screenshot above, the store's Average Order Value (AOV) is right around $90, meaning that the average profit per order is right around $45.

    Following is a screenshot from Google Trends that shows the search volume for the biggest keyword phrase in the market. As you can see, demand for the product has remained quite consistent over the past 5 years (though this past Christmas shopping season didn't have its usual spike, likely due to the COVID pandemic).

    Google Trends Screenshot

    As mentioned above, this business is far and away the web's #1 seller of the brand name it sells. This gives the business a lot of sway with the manufacturer, who has even offered to grant the business exclusive rights to sell the brand name with a sizeable inventory purchase. (The owner hasn't taken them up on this offer yet since he has used most of the profits from the business to invest in real estate, but the offer is still on the table and could be explored by the new owner.)

    Please sign the NDA below to see the domain name of the website and learn more about the products the business sells.

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    Traffic and Marketing

    Following is a screenshot of the 'Acquisition Overview' report from Google Analytics, which shows the traffic breakdown over the 12-month period Feb 2021 - Jan 2022.

    GA Acquisition Overview Report (Feb 21 - Jan 22)

    Direct traffic (i.e. people coming directly to the website on their own because they know its domain name) accounted for about 20% of overall traffic over the past 12 months (ignoring the '(Other)' category from the above report). During the same time period, approximately 24% of orders were placed by returning customers who had already ordered products in the past.

    The owner has done a fantastic job diversifying the business' marketing channels. Following is a breakdown of ad spend over the past 12 months:

    • Facebook / Instagram - 55.4%
    • Pinterest - 24.5%
    • Google - 9.9%
    • Affiliate commissions - 5.4%
    • TikTok - 1.5%
    • Microsoft - 1.1%
    • SnapChat - 0.8%
    • Amazon - 0.7%
    • Micro-influencer marketing - 0.7%

    As noted above, the business currently outsources the majority of ad management (Facebook, Pinterest, Google and Microsoft) to a third-party ad agency. The owner has been very pleased with the results the agency has achieved and maintained over a long period of time. While the business' Return On Ad Spend (ROAS) was higher before the big Facebook ad shake-up in May 2021, the business' overall ROAS (calculated as total revenue / total advertising costs, including affiliate commissions) has continued to hover right around 4.25 over the past 8 months (June 2021 - January 2022).

      If you (as the new owner) chose to bring ad management in-house (rather than continuing to pay the ad agency to manage the ads), you could immediately add over $38,000 to the bottom line.

      Over the past 12 months, affiliates were responsible for generating a total of $150,589 of revenue for the business. Continuing to expand the affiliate network is a great growth opportunity for the business.

      Using influencers (and particularly micro-influencers) to promote the brand and products has also proven to be an effective marketing technique. Not only do influencer plugs lead to immediate sales, but they also increase awareness about the products and build brand reputation.

      The following 'Audience Overview' report from Google Analytics shows how well-diversified traffic is in terms of visitors' location (country):

      GA Audience Overview Report (Feb 2021 - Jan 2022)

      The United States (25.5% of traffic) and United Kingdom (13.4%) are the only 2 countries that account for more than 7% of total traffic. Italy, Australia, Germany, Spain and Canada are all in the 5-7% range. The remaining 32% of traffic is made up by visitors from countries that account for 3% or less of total traffic.

      As noted above, orders are shipped from several fulfillment centers throughout the world (including one in the United States, one in Europe and one in Asia) to ensure quite fast delivery times, regardless of where the customer lives.

      The following screenshot of the 'Organic Channel' report from Google Analytics shows how the site's keyword-rankings-driven organic traffic has grown over the past 2 years:

      GA Organic Traffic Report (Mar20 - Jan22)

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      Store Operations

      At its current revenue level reflected in the P&L above, this business requires approximately ~20 owner hours per week to run. This is possible because the owner has a team of Virtual Assistants (VAs) as well as some ad-hoc freelancers in place to handle the vast majority of the day-to-day operations (including customer service, order fulfillment, content writing, graphic design, website maintenance, etc.).

      The owner's tasks consist of the following:

      • Overseeing the team of VAs
      • Interfacing with the purchasing agent
      • Interfacing with freelancers
      • Analyzing ad performance & interfacing with the ad agency
      • Posting to social media
      • Administration and accounting

      As part of the sale, the owner will of course train the buyer on all aspects of operating the business.

      This business can easily be managed and operated from anywhere in the world.


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      Top Growth Opportunities

      • Get Exclusivity with the Manufacturer - While the business is clearly the #1 seller of the brand/products it sells, it is far from the only retailer. The manufacturer has indicated that they're open to granting the business the right to be the exclusive retailer with a sizable purchase of each of handful of products (the quantities and prices are both negotiable). The owner estimates that becoming the exclusive worldwide retailer of the brand would instantly increase sales by 30-50%. It would take an infusion of capital to do this, but it is the next logical step to turning the business into a worldwide brand.
      • Stock & Ship (Instead of Dropship) - The business currently uses a purchasing agent, who buyers in bulk from the manufacturer, stocks the products, and handles fulfillment. While this is a very convenient set-up and essentially eliminates the need for working capital, it obviously eats into the profit margin. If you were to buy directly from the manufacturer, warehouse and ship products yourself, the owner estimates that the 50% gross profit margin would likely increase to around 60-65%. At the volume the business is currently doing, that would increase the gross profit margin by around $265,000 to $395,000 per year.
      • Increase Amazon Presence - There is a lot of growth potential on Amazon. The owner didn't initially put much effort into Amazon as he worried it might cannibalize his website sales, but now that the brand is more established he thinks promoting the products on Amazon more would introduce <em>a lot</em> more customers to the brand and products (particularly if exclusivity is secured).  Additionally, the business currently keeps a fairly minimal amount of inventory on hand at Amazon, resulting in occasional stock-outs that hurt Amazon rankings and sales.
      • Add New Products - The current catalog is quite small (less than 50 products, the vast majority of which are little add-ons and accessories, not the main product line). The owner hasn't focused much on expanding the catalog. With the customer base and community the business has built up (102,000 email subscribers, 68,000 Facebook Messenger subscribers and 23,000 SMS text subscribers), adding some complementary products could really boost sales.
      • Use a 2% Cash Back Credit Card - While some expenses cannot be paid for with a credit card (including Cost of Goods Sold, credit card processing fees, affiliate commissions, payments to VAs, and a couple others), many of the expenses can be paid by credit card. The owner currently uses a travel rewards card to earn airline miles for personal use. If you were to switch to a 2% cash back credit card (like the Capital One Spark credit card, for example), the cash back on advertising expenses alone would generate $10,400 of additional profit per year. Together with a few other expenses, the bottom line could easily grow by $15,000 per year.

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      Included in the Sale

      The sale includes all of the following...

      • The business name, domain name and website (including all textual and graphical content)
      • All software, subscriptions and systems required to operate the business
      • All contracts with Virtual Assistants (VAs) and freelancers
      • All customer lists and email lists associated with the business (including 101,000 email subscribers, 68,000 Facebook Messenger subscribers, and 23,000 SMS text subscribers)
      • All social media accounts (Facebook, Instagram, Pinterest, TikTok, SnapChat, Twitter, etc.)
      • All inventory on hand at Amazon FBA (typically $5,000 - $8,000 in cost value)
      • 45 days of support to train you/your team on how to run the business, manage the team, and pursue growth opportunities
      • Note: The seller will sign a non-compete as part of the Asset Purchase Agreement

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      Buying Process

      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 30-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 30-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 live screen-share web meetings so you can review financial information, the store admin panel, payment accounts, Google Analytics, etc. We'll also work with you to prepare to sign the definitive Asset Purchase Agreement (APA).

      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.

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