SOLD: Office Furniture Dropship eCommerce Store Making $1,513 Net Profit Per Month
SOLD: Office Furniture Dropship eCommerce Store Making $1,513 Net Profit Per Month
Up for sale is a well-established dropshipping based eCommerce store that sells high-end office furniture. Over the past year (4Q 2016 - 3Q 2017), the store has averaged $1,513 of net profit per month. The store averages 3.2 sales per week with the average sale generating approximately $954 of revenue and $155 of gross profit. This is an easy-to-run store that only requires 6-8 hours per week to run, with a loyal repeat-order customer base that accounts for around half of the store's orders. The current owner is selling the store because he is moving abroad for the next couple of years and will be too busy to operate the store while he lives and works overseas.
- Niche: High-end office furniture
- Store Model: 100% dropshipping-based eCommerce
- Business/Website Age: Started in May 2014 (~3.5 yrs old)
- Customer Base: Both businesses/organizations & private consumers
- P&L Period: October 2016 - September 2017
- Avg Monthly Net Profit: $1,513/month
- Avg Monthly Gross Revenue: $13,293/month
- Avg Orders Per Month: 14/month
- Avg Revenue Per Order: $954
- Gross Profit Margin: 16.3%
- Avg Gross Profit Per Order: $155
- Mailing List: Over 1,500 past customers/newsletter subscribers (great source for repeat business)
ASKING PRICE: $49,000
The seller's asking price for this store is $49,000. Here is how the asking price was calculated...
Oct 2016 - Sep 2017 Net Profit: $18,160 x 2.70 Annual Earnings Multiplier: $49,032 Rounded Down to: $49,000
This website was established in May 2014, making it right around 3.5 years old. Most of the store's customers are businesses (large and small), colleges and universities, and various types of organizations, although the store also attracts household consumers as well. The current owner estimates that right around half of the store's sales are to satisfied repeat customers (i.e. people have have placed an order in the past), and this percentage could rise substantially if the new owner utilized the customer/subscriber mailing list more than the current owner has done (which is very little). See the Growth Opportunities section below for more details. The store sells high-end office furniture. The exact niche and domain name of the store will be disclosed to those who first sign an NDA. The product type continues to grow in popularity, and demand has steadily increased every year over the past 10 years. See the About the Niche section below for more information about the niche and a screenshot from Google Trends. As you'll see in the P&L and Financial Information section below, the store has a long, well-established history of consistent profits. It averages $1,513 of net profit per month. And thanks to the large gross profit per order ($155), it only requires processing 3.2 orders per week to generate that profit. The current owner estimates that running the store requires no more than 6-8 hours per week (at its current profitability level). The store (which runs on the BigCommerce store platform) is 100% dropshipping based, which means you don't have to deal with purchasing large quantities of inventory, stocking products or shipping orders yourself. When an order comes in, you simply forward the order information to your supplier and they ship the product direct to the customer. Dropshipping is hands-down the easiest type of store to operate.
P&L AND FINANCIAL INFORMATION
Here's the P&L for the most recent 12-month period (October 2016 - September 2017)...
Here's a quick summary of the key numbers from the P&L...
- Annual Revenue: $159,513
- Avg Monthly Revenue: $13,293
- Cost of Goods Sold Percentage: 83.7%
- Gross Profit Margin: 16.3%
- Annual Net Profit: $18,160
- Avg Monthly Net Profit: $1,513 per month
- Net Profit Margin: 11.4%
Please note that the 'Cost of Goods Sold', 'Advertising Costs', 'BigCommerce Fees' and 'Subscriptions' line items are net of 2% cash back, as these expenses are all charged to a credit card. The new owner should continue to be able to get cash back on these purchases. Obviously, the current owner will give the eventual buyer the opportunity to conduct due diligence to verify the accuracy of the above figures. This will include doing a live "screen-share" web meeting to log into the admin panel and payment account to review and confirm all of the figures shown in the P&L.
ABOUT THE NICHE
As mentioned in the overview section above, the store sells a certain type of high-end office furniture. Customers include large and small businesses, colleges and universities, government agencies, various types of organizations and private consumers (for their home office). For the benefit of the eventual buyers, we are not disclosing the exact niche or domain name of the site here on the public listing. We will, however, share that information with those who first sign an Non-Disclosure Agreement, which you can do here. Demand for the product type sold on the website has steadily increased from year to year over the past several years. That being said, it is not a "fad" or "trendy" type of product. It's simply grown in popularity over the years and will almost surely continue to experience increased demand in future years. Here is a screenshot from Google Trends for the demand for the product type in the United States over the past 5 years.
RANKINGS AND TRAFFIC
Here's a screenshot from Google Analytics of a report that shows the traffic source breakdown for the past year (10/1/16 to 9/30/17)...
As you can see, organic traffic (i.e. free traffic from Google and other search engines) accounts for almost half (45%) of the store's total traffic. Direct traffic (i.e. people who know the site's domain name and come directly to the site, likely because they've visited and/or made a purchase from the site before) is the 2nd highest traffic source, accounting for 24% of total traffic. The site currently does very little paid advertising (i.e. Google and Bing PPC marketing), which you can see from the small session counts for the traffic categories relating to paid traffic. Overall, the site has a 0.86% conversion rate, which is quite good considering the fact that the average order total is almost $1,000. You will note that the conversion rate for the 'Email' category is much, much higher (15.87%) than the store's average conversion rate (0.86%). This illustrates a huge growth opportunity available to the buyer, which is to better utilize the mailing list (made up primarily of past customers) to generate repeat business. The current owner has rarely sent out newsletters to the mailing list, but whenever he has, it's generated immediate sales. The new owner would be wise to send out regular newsletters to the mailing list, as discussed in the 'Growth Opportunities' section below. Per SEMrush, the site has 21 keyword phrases currently ranking on Page 1 of Google, which are collectively searched for 1,690 times per month (exact match - USA). Much more exciting, though, is how close the store is to achieving Page 1 rankings for many, many more keyword phrases. It's right on the cusp of Page 1 rankings for dozens and dozens of additional search phrases, which could increase organic traffic substantially. The site currently ranks on Page 2 of Google for 40 keyword phrases, which collectively get over 6,120 searches per month (exact match - USA). Plus there are another 61 search phrases that are collectively searched for almost 10,170 times per month (exact match - USA) for which the site is currently ranked on Page 3 of Google. While organic traffic already accounts for ~45% of total sales, that percentage should rise substantially as Page 2 and Page 3 rankings turn into Page 1 rankings (which could exponentially increase the amount of free, organic traffic to the site). Please note that Google Analytics doesn't capture 100% of the store's orders, which is why the 'Revenue' numbers in the far-right column of the Google Analytics report don't tie exactly to the P&L. For example, orders placed over the phone, add-ons purchased after the original order, and manual/irregular orders are not "captured" and reported by Google Analytics.
The current owner reports that he spends about 6-8 hours per week running this store (at its current operating level reflected in the P&L above). Here's a list of the operating tasks he performs (most/all of which you could outsource if you wanted to)...
- Process orders - As mentioned above, 100% of the store's orders are drop-shipped. So when a new order comes in, you simply forward the order details (customer's address & items ordered) to the appropriate supplier. A day or two later when the supplier ships out the order, they'll provide a UPS/USPS tracking number for the shipment, which you simply pass along to the customer (via the store's simple admin panel). Over the past 12 months, the store has averaged ~3.2 orders per week, so you won't have to spend a whole lot of time processing orders. (That's the beauty of the average order having a $155 gross profit margin!)
- Customer service - The current owner has provided extremely limited live chat and phone support. When he comes online to process orders and return phone messages, he activates live chat and takes incoming calls. But when he's not online, he deactivates live chat and lets calls go to voice mail (which he returns later). It would obviously be your choice of whether you want to continue as he has been doing or "ramp up" customer support, which would no-doubt increase sales and profits.
- Add new products as they are released - Like with any store, you'll want to add any new products released by the suppliers as they become available. This only happens a couple times a year across all suppliers combined, so this is just a couple-of-times-a-year task.
- Send out newsletters to mailing list - As noted above, the current owner hasn't been very good about doing this, despite the fact that the Google Analytics data shows that taking the time to do it pays off in a big way. It would probably be a good idea to send out 1-2 newsletter emails per month to a) keep the customer list engaged, and b) generate repeat orders to past customers.
ABOUT THE SUPPLIERS
Approximately 80% of the products the store carries has MAP pricing (Minimum Advertised Price), which means that the manufacturer sets the minimum price the products can be listed/sold for. MAP pricing is great because it ensures that competing retailers can't undercut each others' prices, which would lead to "price wars" and shrinking profit margins. (Note: For the ~20% of products that don't have MAP pricing, the profit margins are quite healthy and have been for the last couple years. The retailers in the market have historically "played nice" in order to keep the margins healthy for everyone.) All of the suppliers are easy to work with and very professional. The current owner has confirmed that all supplier accounts can either be transferred over to the new owner or that the new owner can easily set up a new reseller account with the same pricing and terms, which the current owner will assist you with.
1. Utilize the mailing list to drive repeat business. The product type lends itself to multiple purchases from the same business or organization. It's the type of product a company or organization might purchase 1-2 of to "try out" and then come back and purchase several more (or many, many more) for additional offices/employees. But right now, the vast majority of these customers are returning to the store on their own, not because they received an email or newsletter. The current owner admits that his biggest mistake over the past couple years has been not utilizing the mailing list (which contains over 1,500 past customers and people who have "opted in" to the newsletter) more effectively. As shown in the Rankings and Traffic section above, the conversion rate for email-directed traffic has been incredible (almost 16%!) over the past year! This is a huge opportunity for the new owner.
2. Expand Pay-Per-Click (PPC) marketing. As discussed above, the vast majority of the site's traffic and sales come from a) repeat business from past customers and b) organic traffic from Google and other search engines. The current owner is doing a very minimal amount of PPC advertising... only for "branded" keyword phrases that have the store's name or domain name in the search phrase. The new owner could ramp up PPC advertising significantly, including launching Google Product Listing Ads (PLAs), Bing shopping ads (PLAs), Google remarketing ads, and Facebook remarketing ads, just to name a few.
3. Beef up on-site content and get a few more backlinks. As discussed in the Rankings and Traffic section above, the store is right on the cusp of achieving Page 1 rankings for dozens and dozens of additional keyword phrases (for which it currently ranks on Page 2 or 3). The main thing holding the site back from getting to Page 1 for a lot of these phrases is most likely the lack of ample textual content on category and product pages. The store has a decent amount of unique textual content, but beefing up the content would certainly increase the store's Google Quality Score and boost its rankings across the board. Getting a couple/few additional backlinks to the store would most certainly improve its rankings as well. (The current owner has done very minimal outreach or link building to date.)
4. Launch an affiliate program. With an average gross profit margin of $155 per sale, you could definitely afford to pay affiliates a pretty decent commission and still net a good profit. Launching an affiliate program is another growth opportunity for the new owner to explore.
INCLUDED WITH THE SALE
The sale includes all of the following...
- The domain name and website (including all textual and graphical content)
- Transfer of all supplier accounts (or introductions and assistance setting up new accounts, if applicable)
- All social profile accounts, including Twitter (930+ followers), Facebook (260+ likes), and Pinterest (45+ followers)
- Mailing list (containing over 1,500 past customers and opted-in subscribers)
- 30 days of support to train you/your employee on how to run the business, place orders with suppliers, maintain the store, etc. (first 10 hours via phone or live webinar/screen share, then Skype/email support after that)
BIDDING & BUYING PROCESS
You can make an offer for this highly profitable eCommerce store here. (Note: The current owner is only interested in FULL-CASH offers. Please do not contact us about buy-out arrangements, installment payments or other "creative" purchase arrangements.) If the seller accepts 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 3-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 3-day 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 a live screen-share web conference meeting so you can review financial information, the store admin panel, payment accounts, sales reports, traffic reports in Google Analytics, the supplier account and invoices, etc. We'll also send you the Contract of Sale agreement for you to review. Once the Contract of Sale 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.
SUBMIT OFFER OR INQUIRY
Disclaimer: Store Coach, Inc. is acting as the broker of the sale of this website/business. The website/business owner is 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 owner.
TABLE OF CONTENTS
- Business Overview
- P&L and Financial Information
- About the Niche
- Rankings and Traffic
- Store Operations
- About the Suppliers
- Growth Opportunities
- Included with the Sale
- Bidding & Buying Process
- Submit Offer or Inquiry
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