FOR SALE: Sports Nutrition Supplements Website
FOR SALE: Sports Nutrition Supplements Website
Averaging $146,989 Net Profit Per Month!
Monthly Revenue Trend (December 2015 - May 2019)
Here are the top 10 things you need to know about this business...
- The business sells 100% unique, custom, private-label sports nutrition supplements. No other business sells these products!
- Over the past 12 months, the business is averaging $704,984 in revenue and $146,989 net profit per month, as you can see in the P&L and Financial Information section below.
- Revenue and profits are both trending upward (and fast)! The business has experienced steady, consistent growth over the past four years since it was founded (as shown in the sales chart above), and there are several exciting things in the works that make it extremely likely that this growth trend will continue well into the future.
- Over half of revenue (57.65% over the past 12 months) comes from loyal return customers. Right around 60% of past customers have placed multiple orders, which is a clear indication that the business sells top-notch products that customers love!
- The site has 539 "top 3" rankings in Google, which are collectively searched for over 189,890 times per month. Ahrefs estimates that it would cost ~$146,000 in ad spend to generate as much meaningful traffic as the site currently gets FOR FREE each month due to its strong organic rankings.
- The site also has an army of affiliates sending targeted traffic to the site (the biggest of which just came on board a couple months ago). Referral traffic is the site's #3 traffic source, accounting for 15.1% of visitors.
- After accounting for product costs, shipping/packaging costs and credit card processing fees, the business has an extremely healthy gross profit margin of 46.42%.
- 100% of sales are generated on the stand-alone website. The owners haven't even begun selling on Amazon, Jet.com or other online marketplaces. This is just one of several huge growth opportunities.
- Operating this business is super easy! The owners (two young entrepreneurs) only spend a combined 15-20 hours per week on the business, mostly on strategy and growth tasks. Paid advertising is outsourced to a third-party ad agency, and the supplier handles both manufacturing and fulfillment/shipping.
- The sale includes a 153,000+ person mailing list, comprised of both customers (over 102,000) and newsletter opt-ins (over 50,000). Significant improvements could be made in the realm of email marketing, as discussed in the Growth Opportunities section below.
Continue reading below for more information about this extremely valuable and upward-trending business.
The owners are selling the business for a couple of reasons. First, they are serial entrepreneurs at heart. They enjoy the business start-up / launch process immensely, but they don't have the desire to manage and operate it long-term. Second, they've become a little burnt out on this niche and have new ideas (in other markets) they're eager to pursue.
- Niche: Sports Nutrition Supplements (please sign NDA to begin due diligence & get additional information)
- Store Model: Primarily Retail eCommerce (also B2B wholesale)
- Inventory Model: Fulfillment Center
- Business/Website Age: ~4 Years (Started in June 2015)
- Avg Monthly Revenue: $704,984/month
- Avg Monthly Net Profit: $146,989/month
- Gross Profit Margin: 46.42% (after COGS, shipping & merchant fees)
- Net Profit Margin: 20.85% (after ALL expenses)
- Revenue Breakdown: 53.8% from first-time customers, 46.2% from returning customers
- Avg Order Value (AOV): $94.30
- Avg Visitors Per Day: 5,432/day (164,940/month)
- Top 3 Google Rankings: 539 search phrases searched for 189,890 times per month
- Weekly Time Requirement: 15-20 hours per week
ASKING PRICE: $8,800,000
The seller's asking price for the business is $8,800,000, calculated as follows...
Trailing Twelve Months (TTM) Total Net Profit: $1,763,867
x 5-Year Earnings Multiplier: $8,819,335
Rounded Down to: $8,800,000
Please note that inventory, which fluctuates from ~$600,000 to ~$1,000,000 at any given time, is NOT included in the $8.8 million asking price and will be addressed separately, given the high level of variability.
The business was started in June 2015, about a year after its founder went on ABC's Shark Tank for a different supplement he had created (unrelated to this business). In the founder's words: "I got torn apart on Shark Tank for not having sufficient evidence to substantiate my claims about the product. After that experience, I decided to create a company that was 100% transparent with its supplement formulas, and more importantly, match ingredients and dosages to clinical studies so the products would be backed by 100% substantiated claims."
And that's exactly what he (along with a partner) did. They launched one of the very first supplement companies (especially within the sports nutrition niche) that is 1) fully transparent with its formulas and 2) substantiates its claims with actual clinical studies.
Due to their transparency and science-backed ingredients/formulas, the brand was immediately featured on several major blogs and very quickly achieved $100,000 in monthly revenue. Over the next three years, the owners have simultaneously:
- expanded their product line (which now consists of 30 supplement SKUs plus 14 additional "swag" products),
- built up a large network of bloggers and other affiliates who drive targeted traffic and generate sales, and
- launched major YouTube and Facebook ad campaigns around an extremely effective video (10MM+ Facebook views and 10MM+ YouTube views).
With this three-pronged approach, revenues grew from just under $1MM in 2015... to ~$3.6MM in 2016... to ~$6.0MM in 2017... to ~$7.9MM in 2018. And the business is on pace to do around $9.2MM in revenue in 2019. As you can see from the revenue growth line chart at the top of the listing, revenues (and profits) continue to steadily increase year after year.
P&L AND FINANCIAL INFORMATION
Here's the Trailing Twelve Months (TTM) Profit & Loss Statement for the 12-month period June 2018 - May 2019:
Here's a summary of the key numbers from the P&L...
- Avg. Monthly Revenue: $704,984
- Avg. Monthly Cost of Goods Sold (including product costs, shipping & merchant fees): $377,727 (53.58% of revenue)
- Gross Profit Margin: 46.42% of revenue
- Avg. Monthly Selling Costs (total): $173,459 (24.60% of revenue)
- Avg. Monthly Other Expenses (total): $6,810 (0.97% of revenue)
- Avg. Monthly Net Profit (after all expenses): $146,989 (20.85% of revenue)
The current owners will of course give the eventual buyer 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, Facebook, etc.), Google Analytics, etc.
Following is a screenshot of the 'Finances' report from the Shopify store admin panel. Please note that the revenue shown in this Shopify report is approximately $280,000 lower than the revenue figure in the P&L above due to the fact that a large portion of B2B wholesale revenue is not processed/captured via the Shopify shopping cart system and therefore isn't included in the Shopify revenue figures. (But the eventual buyer will of course have the opportunity to verify this additional B2B wholesale revenue during the due diligence process.)
One of the most impressive things about this business is the fact that OVER HALF of its revenues come from happy returning customers, as you can see from the Shopify report below. This high return customer rate not only speaks to the fact that customers are extremely happy with these supplements, but it also makes the business much more valuable given the existing customer base which will no doubt continue to place additional orders for years and years to come. Over the past 11 months (January - November 2018), 53.8% of revenue has come from returning customers. It's also worth noting that the Average Order Value (AOV) for returning customers is substantially higher ($100.94) compared to the AOV for first-time buyers ($83.45).
This final Shopify report shows a breakdown of sales by country over the past 11 months (January - November 2018). (Note: The report cuts off and doesn't list countries with less than $500 in revenue, just to keep the report from going on too long.)
As you can see, the vast majority of sales (91.6%) is to customers in the United States. The store does ship worldwide, and almost every major country throughout the world has generated at least some sales. But up to this point in time, the owners (and the advertising agency they're using) have focused almost exclusively on the USA market. Expanding marketing efforts to a worldwide audience (or at least to specific targeted countries) is a huge growth opportunity the new owner may want to explore.
ABOUT THE PRODUCTS & SUPPLIERS
First and foremost, it's important to know that the business has created its own brand of sports nutrition supplements. All of the supplements are 100% unique, custom products that the owners have formulated and created themselves, complete with their own custom brand and labels. These products cannot be found on other websites or in other stores.
Two of the key things that set this business apart are: 1) they are 100% transparent with their formulas, and 2) they substantiate their claims about the efficacy of the products with clinical studies (actual science)!
After you electronically sign the NDA, the owners are of course willing to disclose the name of their website and the brand name of their products to serious buyers.
The business currently has 44 SKUs, 30 of which are supplement products (generating 99% of total revenue) and the remaining 14 of which are other "swag" products (T-shirts, shaker bottles, etc.). As you can see from the Shopify sales breakdown report below, the #1 best-selling product accounts for 26.7% of revenue, with the #2 and #3 best sellers accounting for 14.5% and 12.3% of revenue, respectively. The next 4 best sellers each account for between 5% and 10% of revenue, and the following 6 products each account for between 1% and 5% of total revenue. Thus, sales are pretty well-diversified among the product catalog.
All 30 supplement SKUs (which account for 99% of revenue) are sourced from a single FDA-approved laboratory, which is located in the United States. All product batches are third-party tested, and the site lists the Certificate of Analysis for every batch.
The business has an absolutely ideal set-up/relationship with this supplier, which the supplier has confirmed will transfer to the buyer. In addition to manufacturing the products, the supplier also warehouses and ships the products as well! So they are essentially a drop-shipper in addition to being the manufacturer. This saves on lead times and shipping costs, and it also greatly reduces the risk of logistical errors.
Ordering products is very simple. The owners submit a Purchase Order (PO) about 6-8 weeks in advance. New inventory needs are calculated in a spreadsheet by using the previous 30 days' sales volume as a projection for future sales, and then subtracting the current inventory on hand (at the supplier's warehouse).
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. The following table shows rankings data from SEMrush.com as of the listing creation date:
|Rank in Google||# of Keyword Phrases||Combined # of Monthly Searches|
In summary, the site has:
- A total of 539 "top 3" rankings (with a collective 189,890 searches per month)
- A total of 855 "top 5" rankings (256,060 searches/month)
- A total of 1,461 "top 10" rankings (461,150 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.)
As you can see from the SEMrush report screenshot below, SEMrush.com estimates that it would cost ~$107,000 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 ~25% 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 two years (Dec 2016 - Nov 2018) 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 11 months (January - November 2018).
As the above report illustrates, the traffic breakdown is as follows:
- Organic Search - 24.5%
- Direct Traffic - 20.6%
- Referral (primarily affiliates) - 15.1%
- Paid Search Ads - 13.4%
- Social (including paid Facebook ads) - 13.3%
- "Other" - 7.0%
- Display Network Ads - 5.7%
- Email Campaigns - 0.4%
It's worth noting that 20.6% of the site's total traffic is direct traffic (i.e. people who type the domain name of the site directly into their web browser). This means that 20.6% of visitors know the site's domain name and navigate directly to the site, likely because they've a) placed an order in the past, b) visited the site before, or c) heard about the site (by name). It's quite uncommon for an eCommerce store to have such a high percentage of its overall traffic be from direct traffic. This is indicative of the fact that the site has a very strong brand reputation and name recognition.
Please also note that the site has a very high conversion rate of 4.02% (meaning that 4.02% of visitors place an order). Most eCommerce stores are lucky to achieve a 1-2% conversion rate.
Finally, notice that only 0.4% of total traffic has come from email campaigns. The current owners have not utilized email marketing anywhere close to its full potential. They've sent out very few newsletters/emails over the past year, but when they have, it's been highly effective. The Google Analytics report shows that the conversion rate has been off the charts (an amazing 13.53%) the few times they've sent out newsletters to their mailing list. Using the 153,000-person (and growing) mailing list to its full potential is a huge growth opportunity to significantly increase revenue and profit.
Here's a screenshot of the 'Audience Overview' report from Google Analytics for the same 11-month period (January - November 2018).
In addition to the country-by-country visitor breakdown (which shows that ~78% of visitors are from the USA), there are several important things to note from the above report:
- Over the past 11 months, the site has averaged 1.59 sessions per user, which is very impressive. That means that more than half of the site's visitors come back and visit the site a 2nd time.
- The average visitor spends 1 minute and 57 seconds on the site, about twice as long as the average visitor duration for most eCommerce sites.
- The average visitor looks at 2.81 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.
Here's a screenshot of the 'Ecommerce Overview' report from Google Analytics for the past 11 months (January - November 2018).
As you can see, Google Analytics reports an Average Order Value (AOV) of $94.30 over the past year. This is very close to the $93.47 AOV reported by Shopify, as you can see in this Shopify report...
The current owners only spend 15-20 hours per week on the business, primarily on strategy and growth tasks. How can you run a $9.2MM revenue business on 15-20 hours per week? Here's how...
- Their primary supplier is both the manufacturer of the supplements and the fulfillment center. So aside from periodically placing orders, the supplier handles virtually everything with regard to the products: manufacturing, quality testing, warehousing and shipping.
- They outsource virtually all paid advertising tasks to a professional ad management company. (Note: The ad management service costs are of course included in the P&L. So if you were to take over ad management yourself or have your own staff do it, you would realize substantial monthly savings.)
- They've invested heavily into developing systems that simultaneously boost sales and automate the business. For example, they spent ~$30,000 a couple years ago developing a custom Shopify theme that allows customers to create custom "order stacks" when they place their order online. All orders are automatically sent (via API) to the supplier, who then fulfills the order, and the system is then automatically updated to show that the order has been fulfilled.
As part of the sale, the current owners will train the buyer on all aspects of running the business. This will include up to 100 hours of "live" training (via web meeting, webinar, Skype, phone, etc.) as well as 90 days of email support.
- Start Selling on Amazon and Other Marketplaces - The owners have toyed around with the idea of selling on Amazon.com, Jet.com, Rakuten and other major online marketplaces since the inception of the business. But for various personal reasons (primarily their time constraints, their inexperience selling on Amazon, and not loving the idea of making Amazon and the other "big dogs" even richer than they already are), they've chosen not to sell on Amazon or any of the other huge marketplaces online. (To date, 100% of sales come from their stand-alone website and a handful of B2B wholesalers). But selling on Amazon, Jet.com, Rakuten and other gigantic online marketplaces is an ENORMOUS opportunity for the right buyer to exponentially grow the business! Most supplement companies do the vast majority of their revenue on Amazon, thanks to its enormous audience of willing shoppers. Amazon and Rakuten are particularly exciting opportunities when coupled with the second growth opportunity: increasing international sales.
- Expand Advertising to Additional Countries to Increase International Sales - As noted in the P&L and Financial Information section above, 91.6% of revenues are currently attributed to customers in the United States. This is because the owners (and the marketing firm they use) have focused almost exclusively on the US market. While the US market is the largest online shopping marketplace in the world, it is far from the only market. Japan, Australia, China and several countries in Europe have very large markets, particularly for supplements. The fact that the business is already getting ~8% of its sales from customers outside the USA despite doing virtually zero international marketing speaks to the huge opportunity here. (And, in fact, the owners are in the process of finalizing a large order from a Chinese retailer who reached out to them about reselling their products in China.) For starters (as a bare minimum), the buyer could add the products to Amazon.co.jp (Japan), Amazon.com.au (Australia), Amazon.cn (China), Amazon.co.uk (United Kingdom), Rakuten (which is actually bigger than Amazon is some countries) and other large marketplaces.
- Re-Focus Efforts on the Affiliate Program - For the first couple of years after starting the business, the owners spent a fair amount of time developing affiliate relationships with bloggers, reviewers and other "influencers" in the sports nutrition market. For the past year or so, though, they've done very little to find new affiliates or cultivate affiliate relationships. The owners have indicated that this is one of their biggest regrets over the past year, as affiliate-driven sales are so profitable, particularly when you consider the lifetime value of the average customer (not just their initial affiliate-driven order). They're extremely confident that devoting more time and attention to increasing their network of affiliates (particularly international affiliates) could significantly increase sales and profits. (Note: Because the business has such highly-rated products and so many strong, loyal affiliates already, it's proven to be quite easy to pick up new affiliates by strategically "name-dropping".)
- Continue Releasing New Complementary Products - New product releases have historically resulted in an immediate bump in revenues/profits (simply by announcing the new product to the mailing list, which currently numbers 153,000+), not to mention increased sales over the long run. Releasing new complementary products also expands the opportunity with affiliates, as each potential affiliate may be more interested in some products than others. The current owners have been working on two new products that will be released over the next couple of months, and they have several additional ideas for new products (which they'll of course share with the eventual buyer).
- Expand B2B Wholesale Sales - As was noted above, just about a week before this listing was published, the business received a huge ~$272k purchase order from GNC, wherein GNC will test out one of the business' products in their brick-and-mortar stores. If things go well with this first product, this opportunity with GNC could generate millions of dollars in revenue as GNC will more likely carry more and more of the business' 30 supplement SKUs in the future. In addition to GNC, there are additional opportunities to expand B2B wholesale revenues, particularly with international retailers in countries where the business doesn't have a very strong presence yet.
- Increase and Optimize Email Marketing Efforts - The current owners admit that they've done a pretty poor job with email marketing. They're sitting on a list of over 153,000 past customers (102k+) and opted-in subscribers (50k+), but they don't use it very frequently or effectively. Most notably, they haven't even set up an auto-responder series (which most email marketing experts will tell you is the #1 key to maximizing the value of a mailing list). Up to this point, they've only sent out "one-off" emails here and there (monthly, at best). As you can see from the 'Acquisition Overview' report in the Marketing and Traffic section above, though, the emails they have sent were extremely effective, as illustrated by the 13.53% conversion rate for that traffic source. When utilized properly, many online retail sites can generate somewhere between 30 to 40 cents of revenue per email recipient per month. That means this list could easily generate an additional $46,000 to $61,000 of revenue per month.
- Increase the AOV by Implementing Post-Sale Upsell Capabilities - The owners are in the process of implementing a very powerful Shopify app that makes it possible to up-sell customers on additional, highly related products immediately after they complete their purchase. This way, you don't interfere with the customer completing their purchase as quickly as possible (by introducing other products to them before or during the checkout process)... but you make it really easy for them to add an additional discounted product or two to their order right after they complete their order. And the customer doesn't have to go back through the checkout process or provide their payment information again. For similar stores, this strategy has proven to be an incredibly effective way to increase the AOV and the store's profitability.
- Several Additional Confidential Growth Opportunities - The above growth opportunities are far from the only ones the current owners are considering and/or pursuing at the time. They have several other ideas in the works (or in their minds) that they're very excited about, which they've opted not to share here in this public listing but will be happy to share later on in the due diligence process with the eventual buyer.
INCLUDED WITH THE SALE
The sale includes all of the following...
- The domain name and website (including all textual and graphical content)
- All videos, ads, artwork and marketing materials
- All supplier accounts
- All social profile accounts, including Facebook (27,600+ likes), Instagram (22,300+ followers), YouTube and Twitter
- Mailing list (containing over 153,000 emails, comprised of 102k+ past customers and 50k+ opted-in subscribers)
- 90 days of support to train you/your employee on how to run the business (including up to 100 hours of "live" support via phone or live webinar/screen share)
- Free lifetime Pro Membership here at StoreCoach.com (if you're not already a member)
Please note that inventory, which fluctuates from ~$600,000 to ~$1,000,000 at any given time, is NOT included in the $8.8 million asking price and will be addressed separately, given the high level of variability.
You can make an offer for this highly profitable online business here. If the sellers accept your offer, we'll notify you immediately and update this page to let other interested parties know that an offer has been accepted and the sale is pending.
Once your 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 one of the back-up offers exceeds the original accepted offer, the seller is obligated to sell to the original buyer whose offer was already accepted. The seller can't back out of the accepted offer just because a higher offer was later made.)
During this due diligence period, we'll work closely with you and with the seller to help you complete due diligence. Among other things, this will include doing one or more live screen-share web conference meeting(s) so you can verify all financial information by reviewing the store admin panel, 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.
OPTION TO "BUY AND OUTSOURCE"
If you're interested in acquiring this business (either on your own OR as part of a group) but don't have the time, expertise or desire to handle the day-to-day operations yourself, use the Ask a Question box below to learn how you can outsource 100% of the day-to-day operations to a full-service eCommerce operations company affiliated with Store Coach for a very reasonable operating fee. This allows you to reap the financial benefits of owning (or co-owning) a "cash cow" Internet business like this without having to operate it yourself. By outsourcing 100% of the day-to-day operations, you can own (or co-own) this business completely passively.
Sign NDA to Access Due Diligence Package
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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