SOLD: ReviewMeta.com - High-Traffic Amazon Review Checker Site
NOTICE: This business is now SOLD. We invite you to visit the Store Coach Marketplace to see other web stores currently available to purchase.
Netting ~$135,000 Per Month!
Up for sale is an insanely profitable and clearly upward-trending online business that sells its own private label brand of unique products in the "Home" category of Amazon and on its stand-alone website. Over the past 12-month period (March 2018 - February 2019), the store has averaged $824,374 gross revenue and $134,810 net profit per month!
The business boasts a strong 68.8% gross profit margin (revenue minus Cost of Goods Sold) and a 16.4% net profit margin (revenue minus all expenses) and shows a strong positive growth trend over the past four years since it was founded.
The business' private-label brand has built up a fair amount of brand recognition, and it has a strong reputation for selling high-quality home good products. The majority of the business' ~20 SKUs have a 4.2 - 4.5 star rating on Amazon, which is NOT easy to accomplish in this particular niche. Several of the products have are so popular and receive such favorable reviews that they display the coveted Amazon's Choice badge!
Demand for the types of products the business sells has continued to grow over the past decade, as you can see from the Google Trends screenshots in the About the Niche section below.
The business is quite easy to run, as the two owners currently spend a combined 25-30 hours per week running the store. The owners are selling the business because they're retiring and are ready to "ride off into the sunset."
SBA Loan Pre-Qualified
We've already provided this sale listing, along with several years of financial reports and tax returns, to an experienced eCommerce business SBA lender, who has provided an official 7A SBA loan pre-qualification letter signifying that this business acquisition will qualify for an SBA loan.
- Niche: Home goods (please sign NDA to begin due diligence & get additional information)
- Store Model: Private label products primarily fulfilled by Amazon (FBA)
- Sales Channels: Primarily Amazon.com (USA), but also a stand-alone website, Amazon.ca (Canada), Walmart Marketplace and eBay.com
- Business Age: 4 Years (founded in March 2015)
- Avg. Monthly Revenue: $824,374/month
- Avg. Monthly Net Profit: $134,810/month
- Gross Profit Margin: 68.8%
- Net Profit Margin: 16.4%
- Average Order Value (AOV): ~$46
Weekly Time Requirement: 25-30 hours per week
The seller's asking price for this store is $6,470,000 plus the cost value of inventory on hand at closing. The asking price was calculated as follows:
$1,617,713 Net Profit (Mar 2018 - Feb 2019)
x 4.0 Annual Earnings Multiplier*
Rounded Down to $6,470,000 (plus the cost value of inventory)
* Given the business' upward trends in revenues & profits, the fact that it sells its own unique private label brand of products, and its strong brand reputation and product ratings on Amazon (including several "Amazon's Choice" badges), Store Coach has assigned a 4.0x annual earnings multiplier to this business.
P&L and Financial Information
Here is the detailed P&L for the most recent 12-month period (March 2018 - February 2019). Click on the image to view a larger version of it in a new tab.
* Please note that the 'Product Costs' line item in the P&L has been "standardized" over the 12-month period to eliminate the impact of the timing of when products are purchased and invoices are paid. In an effort to report expenses in the same month as the associated revenue (i.e. accrual-basis accounting), the P&L above was prepared by multiplying the average product costs percentage (which is 30.5% of revenue) to the monthly revenue figure for each of the months to yield the 'Product Costs' figures for each month.
** Just a couple months ago, the owners negotiated significantly better pricing for several of their products. Had this better pricing been in place for the past year (as it will going forward), product costs would have been $212,350 lower... 100% of which would have gone straight to the bottom line. Thus, net profit would have been $212,350 higher for the past year (which is an average of $17,696 additional net profit per month). We're obviously not adding this hypothetical additional net profit to the historical P&L, but the new owner should see this additional ~$18k of net profit each month moving forward. With this cost savings alone, the $6,470,000 asking price (which is based on a 4.0x multiple) effectively becomes a 3.54x multiple.
Following are a few of the key numbers from the P&L...
- Annual Revenue: $9,892,490
- Avg. Monthly Revenue: $824,374
- Cost of Goods Sold Percentage: 31.2% of revenue
- Gross Profit Margin: 68.8% of revenue
- Selling Costs: 33.6% of revenue
- Advertising Costs: 18.3% of revenue
- Other Expenses: 0.7% of revenue
- Net Profit Margin: 16.4% of revenue
- Annual Net Profit: $1,617,713
- Avg. Monthly Net Profit: $134,810
Here is the report from Amazon.com (USA) for the period March 1, 2018 through February 28, 2019. Note that the 'Amazon (USA)' revenue total of $9,798,242 ties to the sum of the following figures from this Amazon report: 1) "Income" of $9,660,319.27 + 2) "Sales, shipping, and gift wrap tax collected" of $145,642.31 + 3) "Sales tax refunds" of -$7,689.55. (Sales tax - both from Amazon and from website sales - is then removed from revenue in the last line of the P&L entitled 'Less: Sales Tax'.)
Click here to electronically sign the NDA in order to gain instant access to additional reports and screenshots from Amazon.com (USA), Amazon.ca (Canada), and the website's admin panel (Shopify) to verify. Additionally, the current owners will of course give the eventual buyer the opportunity to conduct extensive due diligence to verify the accuracy of all figures in the P&L. This will include doing live "screen-share" web meetings to log into Amazon, the store admin panel, payment accounts, and so on.
About the Niche
The business sells its own private label brand of a particular type of product in the "Home" category of Amazon.com (and on its stand-alone website and a handful of other online selling marketplaces, as outlined above). The business currently manufactures and carries ~20 SKUs, with a few new SKUs coming down the R&D pipeline.
As discussed above, the products (and the brand) have developed a strong reputation for being well-made, high-quality products. Most of the products have between a 4.2 to 4.5 star rating on Amazon (very strong ratings for this type of product), and the seller account has a 99% positive feedback rating. There are currently 4 products that display the coveted Amazon's Choice badge, which significantly increases sales.
For the benefit of the eventual buyer, we are not disclosing the niche or the product line here in this public listing. To obtain additional information about the business and its products, please sign the NDA form below (electronically - it only takes a couple minutes).
The following screenshots from Google Trends shows the USA search volumes for a few of the top search phrases representing the products the business sells. As you can see from these Google Trends reports, the demand for these products has steadily risen over the past 10 years (with noticeable up-ticks in demand during the holiday shopping season). The products are in a very safe, "evergreen" niche that has been around for a long time and should continue to grow for many, many years to come.
About the Suppliers
The business currently has 2 manufacturers: one based in the USA and the other overseas. Over the past year, the products manufactured by the USA factory accounted for ~50% of revenue, with the products manufactured by the overseas factory accounted for the remaining ~50% of revenue.
The business has forged strong relationships with both of these manufacturers, with a single point of contact for each. This facilitates fast, clear communication, more effective price negotiations, and the ability to leverage across the full scope of products. The current owners will make introductions and facilitate the transfer of the existing supplier accounts to the buyer, ensuring that the new owner gets the same pricing and terms that the business has gotten historically (realizing, of course, that manufacturing costs are subject to change as the price of raw materials, labor and freight may change over time).
For the products that are manufactured overseas, the order lead time is approximately 90-120 days, depending on the size of the order and the time of year (to account for any possible delays in production, shipping, ports/customs, etc.). Inventory is ordered by the container, and order frequency varies based on order volume and the popularity of each product. The overseas supplier handles all container shipments and warehouses the inventory in their USA-based warehouse until the business is ready (based on stock levels) to ship the products to the fulfillment centers. This arrangement allows the business to save substantially on storage fees charged by the fulfillment centers.
For the products manufactured in the USA, the order lead time is much shorter: typically around 7-14 days. The current owners have developed a sleek system for monitoring both sales trends and inventory levels to determine when to order more inventory and how much to order to ensure that demand is met without tying up too much capital in inventory at any given time. They will of course train the new owner on how to use this system to manage inventory purchasing (and all other aspects of running the business).
Throughout most of the year, the business typically carries approximately $600,000 of inventory (at cost value). This number may surge to about $1,000,000 coming into late November in preparation for the holiday shopping season, when sales increase dramatically.
The current owners report that they typically spend a combined (between the two of them) 25-30 hours per week running this business at its current operating level (reflected in the P&L above). Here's a list of the primary operating tasks they perform (many/all of which you could outsource if you wanted to)...
- Managing Amazon Operations - The current owners spend several hours each week managing the Amazon account: analyzing sales trends, monitoring reviews and feedback, setting up and monitoring sales and promotions, managing the Amazon PPC ad campaigns, answering product-related questions asked by customers, etc. It's important to note here that the business uses Fulfillment By Amazon (FBA), so all orders placed on Amazon.com are processed and handled by Amazon (including the bulk of customer service, though the owners do need to spend some time each week communicating with buyers).
- Monitoring Stock Levels and Ordering Inventory - It's critical for the success of the business that all SKUs are available to purchase at all times. On the other hand, you don't want to over-purchase and have stock sitting on the shelves for long periods of time. As mentioned above, the current owners have developed an efficient system for determining when to re-order each SKU and how many to order (to account for sales trends, upcoming sales/promotions, lead times, and so on).
- Managing PPC Ad Campaigns - As you can see in the P&L, the business currently uses the following advertising platforms: Amazon PPC ads (within the Amazon seller account), Amazon AMS ads (through Vendor Express), Google, Pinterest and Facebook. While these ad campaigns are already quite well-optimized, the current owners still spend a few hours each week analyzing the ad campaigns' performance and tweaking the ads.
- Analyzing the Market & Developing New Products - To ensure long-term profitability, the current owners have made it a priority to constantly analyze the market to identify trends and new opportunities. While they started out with only a handful of SKUs a few years ago, the business now has ~20 active SKUs with several more in the development pipeline. The current owners will of course hand over the reins on these soon-to-be-released products and show you how they conduct research and go about launching new products.
- Accounting and Bookkeeping - Accounting is surprisingly simple for a business that does this much revenue. The vast majority of sales activity occurs inside Amazon, and Amazon makes a single deposit every two weeks that takes into account all revenues, refunds, shipping credits, Amazon fees, fulfillment (FBA) costs, and so on. That being said, accounting and bookkeeping still require a couple/few hours each week.
Included with the Sale
The sale includes all of the following...
- The domain name and website (including all textual and graphical content)
- The Amazon.com (USA) selling account
- The Amazon.ca (Canada) selling account
- The Walmart Marketplace selling account
- The eBay.com selling account
- All inventory on hand at the time of closing (not included in the $6.47 million asking price)
- All intellectual property associated with the business (brand names, trademark (pending), etc.)
- All supplier and vendor accounts
- All customer lists
- All social profile accounts (Facebook, Pinterest, etc.)
- 90 days of support to train you and/or your employee(s) on how to run the business, manage Amazon operations, place orders with manufacturers and manage inventory, etc. (first 80 hours via phone or live webinar/screen share, then Skype/email support after that)
- Note: The sellers will certainly sign a non-compete as part of the Asset Purchase Agreement.
NOTICE: This business is now SOLD. We invite you to visit the Store Coach Marketplace to see other web stores currently available to purchase.
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Disclaimer: Store Coach, Inc. is acting as the broker of the sale of this website/business. The website/business owners are 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 owners.