Passive Ownership of High-AOV Dropship Store
Passive Ownership of High-AOV Dropship Store
Own Part/All of This Site Passively!
Top 7 Things to Know
1. This site is being sold with an operations contract in place, meaning that you can be a 100% PASSIVE OWNER of the site (or a share of it). Click here to learn more about how the operations contract works and how it's possible for you to own part or all of this website but not have to run it yourself.
2. The business is 3.5 years old and, as you can see from the graphs above, both gross revenue and net profit have steadily increased over the past three years (subject to regular seasonality).
3. In 2018, the store did $234,651 in revenue and $38,017 in net profit.
4. The store exclusively uses the dropship model. This means that all of the products are shipped from the suppliers' warehouses directly to the customer. You never see or touch the product! What's more, you don't need to have any working capital to pre-purchase large stocks of inventory or deal with warehousing and shipping out products yourself (or worrying about whether all of the products you've purchased will even sell).
5. The Average Order Value (AOV) is $2,481. With an average gross margin of 24.8% (after shipping & delivery costs), the average order generates an amazing $616 of gross profit. With such a large profit margin, there's plenty of room for marketing and advertising.
6. Thanks to its strong organic rankings, 47% of the store's traffic is free, organic traffic from Google and other search engines (making it the site's #1 traffic source). And organic traffic is trending upward from year to year.
7. 4Q 2018 was the store's best quarter ever, averaging $5,234 net profit per month! Revenue and profits are on the rise.
The owner (who is a long-time member of Store Coach) is selling the business because he's purchasing a new home and needs additional funds for his down payment.
- Niche: Please sign NDA to begin due diligence & get additional information
- Store Model: 100% Dropship (no inventory)
- Business/Website Age: 3.5 Years (started in summer of 2015)
- 2018 Gross Revenue: $234,651
- 2018 Net Profit: $38,017
- Avg. Order Value (AOV): $2,481
- Avg. Profit Per Order: $616
- 2018 Traffic Breakdown: 47% Organic, 30% Paid Search, 11% Direct, etc.
- Weekly Time Requirement: NONE (operations contract in place)
Purchase Price: $114,050
The asking price for this business is $114,050, calculated as follows...
$38,017 Net Profit in 2018
x 3.0 Annual Earnings Multiplier*
* Given the site's age (3.5 years), upward trends in revenues & profits, favorable traffic breakdown (47% organic), and high AOV and profit per order (among other favorable factors), Store Coach has assigned a 3.0x annual earnings multiplier to this website.
P&L and Financial Information
Here is the accrual-basis Profit & Loss Statement for 2018...
Note: The operating fee is not included in the above P&L figures. See the Store Operations section below for a discussion about the operating contract and the operating fee.
The buyer(s) will of course have the opportunity to perform due diligence and verify all of the income claims and other information presented in this listing. This will include doing a live "screen-share" web meeting 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 the P&L for the past three years (2016, 2017 and 2018), along with line charts that illustrate how revenue (on the left) and net profit (on the right) have both grown substantially over that time.
About the Products & Suppliers
After you electronically sign the NDA, we will disclose the domain name of the website so you can see types of products the website sells.
The website currently carries 3 brand names, with 2 of those brand names being sourced through the same supplier. Thus, the site only has 2 suppliers.
Because this is a dropship-based store, there's no need for working capital to purchase inventory. All costs (including cost of goods sold, shipping, advertising costs, etc.) are covered by the revenues/profits of the business.
Marketing and Traffic
In 2018, 47% of traffic was free, organic traffic from Google and other search engines, making it the site's #1 traffic source. Paid search was the #2 traffic source (accounting for 30% of overall traffic), and direct traffic (from past customers & visitors who already knew the domain name of the store and navigated directly to the site) was the #3 traffic source (making up 11% of visitors). Here is the Acquisition Overview report from Google Analytics for 2017 and 2018.
As you can see in the Organic Traffic report below (from Google Analytics), organic traffic has continued to increase over the past couple of years (subject to seasonality) as the site's rankings have continued to climb.
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 yourself. Ownership will be 100% PASSIVE! 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 StoreStream LLC, which is the same company that has been operating the business for the past 3.5 years. Thus, nothing will change at all in the day-to-day operation of the website when it is sold to the new owner(s). The operations contract would include all core operational functions, including:
- Website and catalog maintenance
- Order processing (fulfilling orders, dealing with shipping issues and 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 is 40% of net profit. For the sake of illustration, the following shows what the owner(s) of this business would have received in 2018 had this sale happened back on 1/1/18...
2018 net profit (per P&L above): $38,017
Less: 40%-of-profit operating fee: -$15,207
Equals 2018 net profit after operating fee: $22,810
Thus, had the new owner(s) purchased the site for $114,050 back on 1/1/18, their 2018 earnings (after paying the operating fee) would have been $22,810, which is 20.00% 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 three years, it's very reasonable to expect that earnings in future years would be even higher than 20.00%.
Included with the Sale
The sale includes all of the following...
- The domain name and website (including all textual and graphical content)
- All supplier accounts (2)
- 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 here.
Once an offer is accepted (or a buyers group is assembled), there will be a 3-day due diligence period. During this 3-day due diligence period, we'll work closely with the buyer(s) and seller to complete due diligence and prepare to close. Among other things, this will include doing a live screen-share web conference meeting to verify all financial information by reviewing the store admin panel, merchant account, sales reports, Google Analytics traffic reports, supplier invoices, etc.
Once the sale agreement 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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