FOR SALE: Women's Clothing Dropship Ecommerce Store
Averaging $7,426 Net Profit / Mo
Up for sale is a well-established and highly profitable 100% drop-shipping based eCommerce store with a long track record of consistent sales and profits. Over the past 24 months (June 2018 through May 2020), the store has averaged $21,633 in revenue and $7,426 in net profit per month. The store primarily sells women's clothing (dresses, coats, jackets, pants, skirts, tops, sweaters, swimwear, shoes/boots, etc.) but also sells various accessories as well (bags, hats, belts, etc.).
Absolutely every item in the catalog is drop-shipped directly to the customer, so there's no need to pre-purchase large quantities of products, stock/warehouse inventory, or deal with shipping out orders. And because the current owner has VAs (Virtual Assistants) in place who handle all of the day-to-day operations, he only spends about 6-8 hours per week on the business.
The current owner (who is a long-time member of Store Coach) has a large portfolio of websites, a couple of which are in need of more time and attention. He also plans to use some/all of the proceeds from the sale of this site to create a private label brand in another niche (unrelated to this one).
- Niche: Women's clothing (please sign NDA to begin due diligence & get additional information)
- Store Model: 100% dropship eCommerce
- P&L Period: June 2018 - May 2020
- Store Launch Date: May 2016
- Avg. Monthly Gross Revenue: $21,633
- Gross Profit Margin: 67.5% of revenue
- Avg. Monthly Net Profit: $7,426
- Net Profit Margin: 34.3% of revenue
- Avg. Monthly Visitors (6/1/18 - 5/31/20): 60,702 (1,993 per day)
- Owner Time Requirement: 6-8 hours per week
ASKING PRICE: $265,000
The seller's $265,000 asking price was calculated as follows...
/ 24 to Yield Average Monthly Net Profit: $7,426
x 36 Month (3.00 Annual) Earnings Multiplier: $267,336
Rounded Down to: $265,000
P&L and Financial Information
Here is the P&L Statement for the most recent 24 months (Sept 2018 - Aug 2020). Click on the image to see a larger version of the P&L in a new tab.
* Products/Shipping Costs - These costs were totaled for the entire 24-month period, and were calculated as 29.3% of revenue. For the P&L, this was applied on a monthly basis against the month's revenue.
As you can see in the P&L above, the store has a long history of consistent sales and profits. The store boasts a very strong gross profit margin of 67.5% (after accounting for product/shipping costs and merchant fees (i.e. credit card processing fees). Marketing expenses have averaged approximately 26.9% of revenue, and all other costs combined add up to another 6.3% of revenue. This leaves an amazing 34.3% of gross revenue on the bottom line (which is the net profit margin for the site).
The current owner will, of course, give the eventual buyer the opportunity to conduct extensive due diligence, including a live "screen-share" web meeting where you’ll be able to view reports and transactions in the store admin panel, payment accounts, paid advertising portals (including Google, Bing, and Facebook), Google Analytics, etc. to verify and confirm all of the figures shown in the P&L above. But here are screenshots from the Shopify admin panel and from Admitad (for affiliate revenue) to verify revenue figures for the 24-month period. (Note: Click the images below to see the full-size images in a new tab.)
Shopify Sales Report (September 2018 - August 2020)
Admitad Earnings Report (September 2018 - August 2020)
About the Niche & Suppliers
As noted above, the store sells a large variety of women's clothing (dresses, coats, jackets, pants, skirts, tops, sweaters, swimwear, shoes/boots, etc.), as well as a large selection of accessories (bags, hats, belts, etc.). The store's catalog is very large (thousands of SKUs from dozens of different suppliers), but it's very easy to manage because of the powerful Shopify apps that automate store maintenance, and also because of the processes in place for the VAs.
The store's revenue is very well dispersed among thousands of products in the store. No single product accounts for more than 1% of the store's overall sales. This provides a lot of security, as it would not be terribly detrimental if a particular product went out of production or out of stock.
For the benefit of the eventual buyer, the specific products the store sells as well as the domain name of the site will only be disclosed to serious potential buyers who first sign an NDA (which you can do electronically below).
As mentioned above, this store is 100% drop-shipping based, meaning that the suppliers ship products directly to the customers. This means that you do NOT have to pre-purchase large quantities of inventory, store products in a warehouse, or manually ship out orders yourself. When an order comes in, the supplier ships the order directly to your customer. Dropshipping is hands-down the easiest store model and completely eliminates the need for working capital as well as the risk of not being able to sell large stocks of inventory you've pre-purchased.
It’s worth noting here that the current owner has been using a travel rewards credit card for COGS, advertising, and other business expenses in order to earn airline miles for his own personal use. But if you were to start using a cash rewards credit card (such as the Capital One Spark Cash credit card, you could get 2% cashback on virtually all business purchases, significantly increasing your bottom line. (See the Growth Opportunities section below for projected increased profits associated with this technique.)
Marketing and Traffic
The current owner uses a combination of several channels/techniques for driving traffic to the website, including:
- Google Pay-Per-Click (PPC) ads - primarily Product Listing Ads (PLAs), also known as shopping ads
- Bing PPC ads - primarily PLAs
- Remarketing ads (primarily through Facebook)
- Email marketing campaigns (to both previous customers and newsletter opt-ins)
- Organic and direct traffic (based on keyword rankings and brand reputation)
The following screenshot from Google Analytics (GA) shows the traffic breakdown for the period June 2018 - May 2020. (Click on the image to see the full-size version in a new tab.)
As you can see from the above GA report, the traffic breakdown is as follows:
- Paid Search (Google & Bing) - 69.1%
- Social (Facebook & Instagram) - 15.9%
- Other - 5.2%
- Direct (likely former visitors/customers) - 3.5%
- Organic Search (search engines) - 2.4%
- Display (additional Google PPC ads) - 1.8%
- Referral - 1.4%
- Email - 0.7%
Approximately 96.4% of total revenue is derived from customers in the United States, with an additional 1.3% from customers in the UK and 0.4% from customers in Canada. The store ships worldwide, but the current owner just hasn't really explored marketing in other countries throughout the world. This is definitely a growth opportunity the new owner will want to explore.
As noted above, paid advertising platforms include Google, Bing, and Facebook (which includes Instagram). Following is a breakdown of total ad spend over the past 24 months (June 2018 - May 2020) by advertising platform:
- Google: 96.6%
- Facebook/Instagram: 2.8%
- Bing: 0.6%
The current owner estimates that he spends 6-8 hours per week running the store at its current operating level reflected in the P&L above. One reason the current owner is able to spend so little time operating the store each week is that he has a couple of Virtual Assistants (VAs) in place who handle the vast majority of the day-to-day operating tasks of the business, including order fulfillment, customer service, catalog updates, and store maintenance. This expense has of course been deducted as a business expense for purposes of calculating the net monthly profit, as you can see in the P&L above.
Here's a list of the tasks the current owner performs himself:
- Accounting and bookkeeping
- Managing ad campaigns
- Researching new suppliers and product lines
- Overseeing the VAs
- Ramp Up Facebook/Instagram Marketing - As of now, the business really only uses Facebook for remarketing purposes (i.e. showing ads to people who have recently been on the website to encourage them to come back to the site and make a purchase). These ads are highly effective, but there's so much more than could be done with Facebook ads. With the size of this store's catalog and the incredible profit margins this store enjoys, the sky is the limit for the amount of traffic this store could get from targeted Facebook ads to "lookalike audiences" that could be created based on the store's 25,000+ past customers.
- Increase Email Marketing Efforts - The current owner has done very, very little in the way of email marketing. He's clearly done a lot of things right, but this is one area where he's really "missed the boat" as email marketing is incredibly powerful for clothing/fashion sites like this one. The business has an email list comprised of 60,000+ people (25,000+ past customers who already made a purchase plus an additional 35,000+ people who "opted in" to the store's newsletter). This list is hugely valuable! Most online retail sites can generate somewhere between 30 to 40 cents of revenue per email recipient per month. If utilized properly, this list could generate an additional $18,000 to $24,000 of revenue per month.
- Start Advertising on Pinterest and Other Women-Focused Sites & Hang-Outs - The current owner hasn't had the time to try out any paid advertising on Pinterest yet, but the site does get a decent amount of free traffic from the limited amount of Pinterest posts he has made. Especially since the store's target audience is women, Pinterest could prove to be a very lucrative advertising avenue (as could other social sites and hang-outs frequented by women).
- Increase the Average Order Value (AOV) by Implementing Post-Sale Upsell Capabilities - There's a very powerful Shopify app called CartHook which 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 them to a bunch of other products they could also buy (or buy instead)... but you make it really easy for them to add an additional 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 selling relatively low-cost clothing items (like this store does), this strategy has proven to be an incredibly effective way to increase the AOV and the store's profitability.
- Influencer & Affiliate Marketing - This is the ideal niche/product line to use "influencer marketing" and/or affiliate marketing to generate additional traffic and sales. There are literally tens of thousands of related but non-competing sites and hundreds of "influencers" (people with tens/hundreds of thousands of followers) relevant to this market who you could pay either a fixed fee or a percentage commission to send visitors to the site.
- BONUS OPPORTUNITY! Start Using a 2% Cash-Back Credit Card for Virtually All Expenses - As mentioned above, the current owner has been using a travel rewards credit card to earn airline miles for personal use. If you were to instead switch over to using a 2% cash-back credit card (such as the Capital One Spark Cash credit card), the business would instantly become even more profitable than it already is. If you were to charge the COGS ($6,171/month), advertising costs ($5,816/month), and Shopify fees/subscriptions ($711/month) to a 2% cashback credit card, you'd instantly add ~$254 of pure profit to the bottom line every month.
Included with the SaleThe sale includes all of the following...
- The domain name and website (including all textual and graphical content)
- All social profile accounts associated with the site (including Facebook, which has 9,300+ followers, Instagram, Pinterest and Twitter)
- All customer lists (comprised of over 25,000 past customers)
- The email list (comprised of over 60,000 email addresses, including both past customers and newsletter opt-ins)
- All supplier accounts
- 30 days of support to train you/your team on how to run the business, manage the ad campaigns, etc. (first 30 hours via phone or live webinar/screen share, then Skype/email support after that)
- Note: The seller will certainly sign a non-compete as part of the Contract of Sale.
You can make an offer for this highly profitable eCommerce store here. We'll immediately present your offer to the seller. If he 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 10-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 10-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 meeting so you can review financial information, the store admin panel, payment accounts, sales reports, traffic reports in Google Analytics, supplier 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.
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, desire or know-how 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.
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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.