Rare Opportunity to Acquire a High-Growth, 5-Star-Brand Food Service Equipment Dealership At Its Infancy
Opportunities to acquire a young, high-growth business with a superior domain name in a killer niche are extremely rare. As you can see in the revenue growth chart below, this is one such business. (And as you'll learn below, its personnel limitations are severely limiting the number of sales it could be making.)
The business is 100% drop-shipping, meaning it doesn't require any working capital, storage space, or fulfillment/shipping personnel. Over 90% of its sales are B2B sales, which are highly preferable to D2C (Direct To Consumer) sales since B2B sales tend to have a) a much higher Average Order Value, b) a much higher re-order rate, and c) a much higher customer lifetime value. Over the past 12 months, the site has generated almost $3.5 million in revenue and almost $370k in net profit.
The owner (Abe) has a team of 5 Virtual Assistants (VAs) who help out with various "behind-the-scenes" tasks (catalog maintenance, order processing, email support, etc.), but he has been handling all customer-facing tasks himself (i.e. answering/returning phone calls, taking live chats, etc.). Personal and family issues have prevented him from working very many hours some months, which has left A LOT of potential sales on the table. Months with lower revenue and profits coincide with the months Abe wasn't been able to work very much.
The site has a very memorable, brandable domain name that is perfectly suited for its market (which is an enormous, multi-billion-dollar market in the USA). What's more, there are significant barriers to entry that make it extremely difficult for new competitors to crop up and capture market share.
Abe is selling the site because he is burnt out operating the site himself and would rather sell the business than hire and manage a team to operate and continue to grow it.
Niche: High-AOV equipment (please sign the NDA below to see the domain name)
Store Model: B2B dropship
P&L Period: Trailing Twelve Months (TTM) - May 1, 2021 - Apr 30, 2022
Business Age: ~3.5 years (launched in Jan 2019)
Avg. Monthly Gross Revenue: $287.9k
Avg. Monthly Net Profit: $30.7k
Net Profit Margin: 10.7% of revenue
- Owner Time Requirement: 30-40 hours per week
Asking Price: $2,200,000
The $2,200,000 asking price was calculated as follows...
Trailing Twelve Months (TTM) net profit: $368,805
x 6.0x Annual Earnings Multiplier: $2,212,830
Rounded down to $2.2 million
Store Coach has assigned a 6.0x multiple to this business for the following reasons:
- Its revenue and profit growth trend over the past 3.5 years is phenomenal
- Revenues could easily be doubled/tripled (or more) by simply adding personnel to handle the existing inquiries and demand
- There are significant barriers to entry that limit additional competitors from entering the market (as discussed below)
- The sale includes valuable B2B business relationships that will generate recurring sales for years to come
- The business has a short, memorable 5-star domain name perfectly suited to the market/industry
P&L and Financial Information
Here is the accrual-basis P&L Statement for the TTM period May 1, 2021 - Apr 30, 2022. Click on the image to see a larger version of the P&L in a new tab.
The #1 factor affecting the site's monthly revenue and profit is, by far, Abe's personal availability (which has been severely limited some months by personal/family issues and Abe simply being burnt out). In general, the months with lower revenue and profit are the months where Abe wasn't able to put as much time into the business.
As you can see in the P&L, Abe significantly increased his Virtual Assistant (VA) spend in Oct/Nov 2021 to assist with some of the day-to-day non-customer-facing tasks. But he hasn't had any local employees/staff members who speak English as their first language to help with customer-facing tasks like answering phone calls, returning phone calls, taking live chats, nurturing relationships with B2B customers, etc. Because he's been doing all of these customer-facing tasks himself (and has had some personal and family situations limit his ability to work full-time), A LOT of potential sales have been forfeited when Abe hasn't been able to put in many hours. As an example, here's a screenshot of just a portion of the incoming calls (the vast majority of which are pre-sale inquiries from customers wanting to place an order) that Abe wasn't able to answer or return on a single day (May 26, 2022) - there are more pages just like this!
The buyer will of course have the opportunity to conduct extensive due diligence to confirm the accuracy of all of the figures presented in the above P&L. This will include viewing reports and transactions in the store admin panel, payment accounts, Google Analytics, Google Ads, etc.
About the Market & Products
As mentioned above, the store sells primarily food service equipment to other businesses, thus making this a B2B dropship business. The site's Average Order Value (AOV) is $1,673, but there are plenty of sales in the $5-10k range and even the $20-30k range. (The AOV is pulled down by sales for small wares and accessories, which are primarily sold for purposes of finding new customers that can be converted into long-term customers who will eventually need to make purchases for big ticket items.)
The largest competitors in the multi-billion-dollar food service equipment market provide little to no pre-sale service. The business sets itself apart by offering pre-sale assistance to customers. That said, Abe has missed out on a lot of sales over the past year because he often hasn't had time to take incoming calls or return calls in a timely manner (let alone reach out to past customers to see if he could assist them with additional purchases).
Speaking of which, the food service equipment market has enormous potential for recurring orders from past customers. Many of these business clients have multiple locations (and are frequently adding additional locations) and need to purchase equipment for all of them. What's more, the equipment needs to be updated and/or replaced every few years. Establishing strong working relationships with these business clients can lead to numerous future purchases, resulting in a very high lifetime value for each customer.
Finally, it's worth repeating here that there are significant barriers to entry in this market. Abe did a lot of leg work and nurtured strategic relationships for over a year before he was successful in overcoming the barriers to entry and securing dealer/dropship relationships with the business' suppliers (with optimal pricing for both products and shipping). Note: These accounts and relationships can and will be transferred to the buyer upon completion of the sale.
For more information about the market/products and to learn the domain name of the website, please sign the NDA now.
Traffic & Marketing
The site drives traffic primarily through a combination of paid Google Ads, direct traffic (from previous visitors and customers) and free organic traffic.
The following 'Acquisition Overview' report from Google Analytics shows the traffic breakdown (by traffic source) for the past 12 months (please note that a credit card expiration date issue caused Google Ads to be down from Mar 27 - Apr 11, 2022):
Following is the 'Ecommerce Overview' report for the same 12-month period (May 1, 2021 - Apr 30, 2022). It's worth noting that revenues were not affected much by the Google Ads being down for ~2 weeks in late March and early April).
The following screenshot shows how direct traffic (i.e. visitors who know the domain name of the site - either because they're a previous customer or they visited the site before - and navigate directly to it) has increased over the past year:
Lastly, here is the Google Analytics report that shows how free organic traffic has increased over the past 12 months:
The following table shows the number of keyword phrases and the combined total monthly search volume for those keyword phrases for each of the following Google ranks (per ahrefs.com data as of May 25, 2022):
|Google Rank||# of Keyword Phrases||Total Monthly Search Volume|
We will happily provide you with the ahrefs.com data export (which allows you to see which keyword phrases fall into each category and the monthly search volume for each) once you have signed the NDA below.
It's worth noting that Abe is managing the Google Ads campaign himself and admits that he is far from an expert. He currently doesn't do much (if any) in terms of device adjustments, negative keywords, product-specific bidding, remarketing, and so on. The ad campaigns are very simple. Significant improvements could be made to greatly improve the ads' performance and boost Return On Ad Spend (ROAS).
At its current revenue level reflected in the P&L above, this business requires about 30-40 owner hours per week to run.
As mentioned above, most of the behind-the-scenes (i.e. non-customer-facing) tasks are currently performed by a team of 5 Virtual Assistants (VAs), who Abe hired via UpWork. These tasks include processing orders, replying to emails, maintaining the catalog, updating stock and pricing, etc. All VA costs are accounted for in the P&L above.
Abe has been handling all customer-facing tasks himself, which includes answering phone calls (when possible), returning phone calls (when possible), maintaining the company's books and records, and checking/tweaking ad campaigns. The vast majority of these tasks (if not all of them) could easily be handled by an employee or staff member.
As part of the sale, Abe will train the buyer (or the buyer's team) on how to handle all aspects of running the business and managing the team of VAs. Note: The team of VAs will happily stay on and continue working for the new owner, if desired.
Top Growth Opportunities
Following are the top growth opportunities:
Expand the catalog - The site currently has about 10,000 products, which is a drop in the bucket compared to the 500,000+ products available from the manufacturers the business has access to. Many businesses are looking for very specific pieces of equipment. If the site doesn't offer the equipment, the sale is lost.
Expand paid advertising - As you can see in the P&L above, Abe has only been spending about $4,000 per month on paid advertising. Furthermore, he is only using one ad platforms (Google). Increasing the advertising budget and utilizing more ad platforms (i.e. Microsoft Bing, YouTube, Facebook, Instagram, etc.) would no-doubt generate additional sales and profits. Also, as mentioned above, significant improvements could be made to greatly improve the ads' performance.
- Pick up the phone! - After 3.5+ years of being a "one-man show" in terms of customer-facing tasks, Abe is tired. Especially over the past 3-4 months, he has just been too burnt out to pick up the phone (both for incoming calls and to return phone calls). Consequently, easy sales are left on the table. Revenue and profits could easily be doubled (or tripled) by simply picking up the phone when it rings and by immediately reaching out when a customer requests a call-back (which they can do on the website).
- Nurture key client relationships - Many of B2B business clients have multiple locations and are frequently adding even more locations. They need to purchase a significant amount of equipment for each new location and update/replace the equipment for existing locations every few years. Establishing strong working relationships with these business clients can lead to numerous future purchases. Abe hasn't had the time to do this with very many clients, but those who he has have been extremely fruitful.
Included with the Sale
The sale includes all of the following...
- The domain name and website, including all textual and graphical content of the site
- All contracts and relationships with existing suppliers, manufacturers, wholesalers, etc.
- All customer lists and email lists associated with the business
- All social media accounts (Facebook, Twitter, etc.)
- All advertising accounts and other accounts associated with the website
- 60 days of support to train you/your team on how to run the business, process orders, manage advertising campaigns, 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 20-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 20-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.