FOR SALE: Tailored Men's Clothing "Receive & Ship" Store
FOR SALE: Tailored Men's Clothing "Receive & Ship" Store
Averaging $4,575 Net Profit / Mo
Top 7 Things to Know
1. This business was designed by the current owner who has over 7 years of custom clothing experience and was created to fill a need for custom luxury products at an accessible price. The current owner will provide training in the custom clothing and tailoring industry, so that this business may be run by someone with zero custom clothing experience.
2. This business has developed significant amounts of customer loyalty. While it launched in August 2018, over 25% of the store's total orders (and 17% of revenue) came from returning customers. This kind of repeat business is almost unheard of for luxury products and speak to a high degree of customer satisfaction that should continue to grow.
3. This business is focused on high-profit orders, so it requires little time to process and fulfill orders. The current owner spends approximately 5 hours a week on order fulfillment, customer service, and marketing combined.
4. The store uses the "Receive & Ship". Each product is made custom on ordering by the supplier. So you don't need to spend any money ahead of time building inventory. Orders are placed through a simple software program. On completing the product, the order is shipped to the owner, who ships the order to the customer. This allows the owner to add in marketing or branding materials prior to it being received by the customer. This fulfillment process could also be easily outsourced to a third party.
5. The Average Order Value (AOV) is a solid $824. With an average gross margin of 38.24%, the average order generates $315 of gross profit. With such a large profit margin, there's plenty of room for marketing and advertising.
6. To-date traffic to this site has largely been driven by word of mouth referrals, the only paid advertising that has been tested has been basic Facebook retargeting, leaving this a huge avenue for sales growth (see the Growth Opportunities section below for more details).
7. The supplier for this store provides fresh products seasonally with high-quality product photos, giving multiple opportunities for repeat orders (ideal for email marketing), and easy catalog management.
- Niche: Custom Tailored Men's Clothing (please sign NDA to begin due diligence & get additional information)
- Store Model: "Receive & Ship" (no inventory)
- Business/Website Age: 7 Months (started in August 2018)
- Avg. Monthly Revenue: $12,797/month
- Avg. Monthly Net Profit: $4,575/month
- Avg. Order Value (AOV): $824
- Avg. Profit Per Order: $315
- Avg. Visitors Per Day: 957 (29,116/month)
- Weekly Time Requirement: 5 Hours
Asking Price: $190,000
The asking price for this business is $190,000, calculated as follows:
$32,027 Net Profit (Aug 18 - Feb 19)
Divided by 7 months for an average monthly net profit of $4,575
x 12 for an estimated annual net profit
x 3.5 Annual Earnings Multiplier
Rounded Down to $190,000
P&L and Financial Information
Here is the accrual-basis Profit & Loss Statement for August 2018 - February 2019 (click the image to view a larger version of the P&L in a new tab):
Here's a summary of the key numbers from the P&L...
- Avg. Monthly Revenue: $220,605
- Avg. Monthly Cost of Goods Sold (including product and shipping costs): $184,710 (83.7% of revenue)
- Gross Profit Margin: 16.3% of revenue
- Avg. Monthly Net Profit (after all expenses): $20,357 (9.2% of revenue)
The current owner will, of course, give the eventual buyer(s) the opportunity to perform extensive due diligence and verify all of the income claims and other information presented in this listing. This will include doing a number of live "screen-share" web meetings to log in and view reports and transactions in the store admin panel, payment accounts, advertising accounts (Google, Bing, etc.), Google Analytics, etc.
Following is a screenshot of the Ecommerce Overview report for 2018 from Google Analytics, which shows $2,650,711 of revenue (just a couple thousand dollars more than the annual revenue figure in the P&L above). This report also shows a total of 1,903 transactions for the year (which is an average of 5.2 orders per day) with an Average Order Value (AOV) of $1,392.91.
About the Products & Suppliers
The store sells various types of outdoor power equipment, with the majority of sales being for one particular type of equipment. After you electronically sign the NDA and complete a simple buyer verification process, we will disclose the domain name of the website to you.
The website currently carries 21 brand names, with 4 brand names making up ~75% of sales (and 8 brand names making up 90%+ of sales).
The demand for the main product line is extremely steady, as you can see from the following report from Google Trends for the #1 search phrase in this niche. There is, of course, an annual cycle causing demand to be higher in certain months, but the year-over-year search volume (representing demand) is holding steady over the past 5 years and, if anything, increased a bit over time.
Over the past 10 years, the business has built up extremely strong relationships with all of its suppliers (especially the top suppliers making up the vast majority of sales). These relationships have resulted in getting special pricing with several suppliers and the ability to occasionally run exclusive sales throughout the year.
Marketing and Traffic
The site has A LOT of Page 1 rankings and consequently gets A LOT of free, organic traffic from Google (as well as other search engines). In fact, organic traffic is the site's #1 traffic source, accounting for 63.2% of total traffic in 2018. The following table shows rankings data from SEMrush.com as of the listing creation date:
|Combined # of
In summary, the site has:
- A total of 373 "top 3" rankings (with a collective 39,480 searches per month)
- A total of 623 "top 5" rankings (121,890 searches/month)
- A total of 1,174 "top 10" rankings (192,190 searches/month)
(Note: After you sign the NDA below, you'll be able to download the SEMrush organic rankings report to see full details about the site's organic rankings.)
SEMrush.com estimates that it would cost ~$12,000 per month of Pay-Per-Click ad spend to generate as much meaningful traffic as the site currently gets FOR FREE each month due to its strong organic rankings.
Free, organic traffic from search engines is already the site's #1 traffic source (accounting for 63.2% of total traffic). And as you can see in the Organic Traffic report below (from Google Analytics), organic traffic has continued to increase over the past three years (subject to seasonality) as the site's rankings have continued to climb.
Here's a screenshot of the 'Acquisition Overview' report from Google Analytics that shows the store's overall traffic breakdown over the past year.
As the above report illustrates, the traffic breakdown is as follows:
- Organic Search - 63.2%
- Direct Traffic - 16.1%
- Paid Search Ads - 13.8%
- Referral - 5.0%
- Social - 1.0%
- Display Network Ads - 0.8%
- Email Campaigns - 0.1%
- "Other" - 0.0%
Here's a screenshot of the Audience Overview report from Google Analytics for the past year.
In addition to the country-by-country visitor breakdown (which shows that 92.2% of visitors are from the USA), there are several important things to note from the above report:
- Over the past year, 26.7% of the site's visitors are returning visitors (meaning they've been to the site before and are visiting it for a 2nd/3rd/4th time). Most eCommerce sites cannot boast such a high returning visitor rate.
- The average visitor spends 2 minute and 22 seconds on the site, more than twice as long as the average visitor duration for most eCommerce sites.
- The average visitor looks at 2.43 pages on the site, a very high number. It's quite uncommon for a site to have such a high pages-per-session number.
The above numbers are referred to as User eXperience (UX) metrics, which are one of the biggest (if not THE biggest) Google ranking factors. The site is doing extremely well across the board for these UX metrics. Visitors clearly love this site (as evidenced by the fact that many visitors return for additional visits, spend a fairly long time on the site, and visit several pages each visit), and Google's algorithm continues to place greater and greater emphasis on how users interact with the site. Bottom line: The site's organic rankings should continue to climb due to its strong UX metrics, leading to more and more free, organic traffic over time.
As mentioned above, in 2018 approximately 14.6% of overall traffic was paid traffic (13.8% paid search ads + 0.8% display network ads). These Pay-Per-Click ads were highly profitable. As you'll see from the Google Ads and Microsoft Bing Ads reports below, the average acquisition cost (i.e. Cost Per Conversion) through Google ads was $90.21, and the average acquisition cost through Bing ads was $71.39. Given the fact that the average profit per order for the store is $227, the average Google-ad-driven sale netted ~$137 of profit and the average Bing-ad-driven sale netted ~$156 of profit.
Google Ads Report (2018)
Bing Ads Report (2018)
This business is being sold with an operations contract in place. This means that you (either by yourself or as part of a small buyers group) can OWN the business but not have to worry about operating and marketing it. Your ownership can be 100% PASSIVE!
For the first 6 1/2 years of the business' existence, the owner ran the business completely on his own. Then, about 3 1/2 years ago, he simultaneously 1) contracted with one of Store Coach's sister companies to help with/consult on SEO and advertising, and 2) hired a Customer Service (CS) person to help with processing orders. The labor costs for both of these services are included in the 'Contract Labor' line of the P&L. But even with this help, the owner has still had to work full-time on the business himself.
This sale proposal includes a full-blown operations contract to make it possible for the buyer(s) to own the business and collect on its profits but NOT to have to run the day-to-day operations of the business. The owner (or owners group) would of course direct the operations team on how they'd like the business to be operated/marketed and would "meet" (typically via web conference) with the operations team periodically to review sales & financial reports and discuss "big-picture" strategies and make decisions. But the operations team would completely run the business from day to day.
This proposed operations contract would be with Hermansen Brothers, Inc. (StoreStream's sister company, which has been providing SEO & marketing services for the business) and would also include the existing CS person and, most importantly, the current owner himself. The operations contract would include all core operational functions, including:
- Website and catalog maintenance
- Order processing (fulfilling orders, dealing with returns, etc.)
- Customer service (pre-sale questions, post-sale support, etc.)
- Search Engine Optimization (SEO)
- Pay-Per-Click ad management
- Accounting and bookkeeping
The proposed operating fee would be a flat 5% of revenue. The following shows what the owner of this business would have received in 2018 had this sale happened back on 1/1/18 and the new owner had the operations team running the business the past year (2018)...
2018 net profit (per P&L above): $244,282
Add back 'Contract Labor' (since that expense would be included as part of the operating contract): +$44,053
Subtract 5%-of-revenue operating fee: -$132,363
Equals 2018 net profit after operating fee: $155,972
Thus, had the new owner(s) paid the full asking price of $1,095,000 back on 1/1/18, their 2018 earnings (after paying the operating fee) would have been $155,972, which is 14.24% of the purchase price of the business... a very impressive return! And given the business' upward trends in rankings, traffic, revenue and profit over the past several years, it's very reasonable to expect that earnings in future years would be even higher than 14.24%.
One final thing worth noting here... If the business ends up being purchased by a buyers group (rather than purchased by a single business/individual who buys it outright), the current owner would like to retain a 10-25% portion of ownership himself, given how much he believes in the growth potential and future outlook of the business.
Included with the Sale
The sale includes all of the following...
- The primary domain name and website (including all textual and graphical content)
- An additional domain name and website (which generates additional sales and profits)
- All supplier accounts
- All social profile accounts
- Customer list & mailing lists
- Operations contract (as discussed above)
You can make an offer (or express your interest in being part of a buyers group) for this highly profitable online business here.
Once an offer is accepted, the official 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. ( Please note that if a back-up offer exceeds the original accepted offer, the seller is obligated to sell to the original buyer whose offer was already accepted.)
During this due diligence period, we'll work closely with the buyer(s) and seller to complete due diligence. Among other things, this will include doing one or more live screen-share web conference meeting (s) to verify all financial information by reviewing the store admin panels, bank and merchant accounts, sales reports, Google Analytics traffic 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 1) update this page to let other interested parties know that the sale has been finalized and 2) remove this listing from the Store Coach Website Marketplace.
Sign NDA to Begin Due Diligence
Please note that until you electronically sign the NDA, we will not disclose the domain name of the website or other confidential information.
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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.
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