Growing eCommerce Business Earning $9,000/month
Steady Traffic and Growing Financials
San Francisco, CA
When was the business established?
What does the business do?
Sell bed heads (headboards) online
Who is the typical customer?
We have two customers – trade clients and general public. Trade clients can range from interior decorators, interior designers & interior architects. Direct customers are predominantly female, approximately 35 + and are either moving into a new house, renovating an existing house or redecorating.
We previously wholesaled our product across 12 stores nationally, however with the new collection we pulled away from wholesaling due to tighter profit margins. We are currently in discussion with our most successful wholesaler who has a store in Sydney and Melbourne, as they are very eager to take the range.
What is included in the sale?
Website, email lists, trade customer database, social media accounts, inventory held at point of sale.
Is there anything unique or interesting about the business? Anything mentionable?
3D model to design custom bedheads, exclusive fabric and buttons designs
Why is the business being sold?
Both partners wish to pursue other business ventures.
How does the business make money?
By selling bedheads and fabric swatches
Are different types of revenue streams?
No only bedheads
Owner’s monthly time requirement:
How much time does it take the current owner to run?
80hrs shared across two people.
What are the daily operations like and who’s responsible?
As Below, shared between Sarah and Merryn.
- Ordering Fabric (5 suppliers- 3 major suppliers)
- Creating Purchase Orders for manufacturing contractors (timber & upholstery)
- Wrapping Bedheads
- Scheduling in delivery with TNT (not a Mexsii account)
- Contacting customers regarding delivery (one email to advise delivery, second email to ensure delivery received)
Customer Service Tasks
- Responding to customer enquiries via website and social media
- Sending out fabric swatches ordered by customers (both trade and direct customers)
- Social media content creation (inc. post planning for instagram & pinterest)
- FB advertising
- Planning promo campaigns on social media & EDMs
- Blog posts
- Book keeping
- Paying Bills
Do you have any employees? If so, how much time do they spend on average, and how are they compensated?
We do not employ anyone, however did have an intern looking after our social media accounts and online marketing for a period of a few months this year. She worked remotely and was an excellent addition to our team. She is keen to continue working with Mexsii so I would highly recommend her as an employee to the owner.
Freelancers that have been used include graphic designers in the initial build of the website and for marketing collateral; textiles designers for the printed fabric; website designers for the website build and changes. All of these contractors can be found on the P&L.
Have you done any Search Engine Optimization? If so, what level of SEO effort is required for the site to maintain its current traffic levels?
SEO was included in our site build, no regular SEO maintenance has been put in place since the build
To your knowledge, has the site ever received any search engine penalties (manual or algorithmic)?
Do you or have you ever purchased traffic?
Do you run any other marketing campaigns, such as display advertising, social media marketing, offline advertising or anything else?
- Social Media (Facebook, Instagram, Pinterest)
- Blog posts from industry bloggers
- Media features
- Facebook Advertising. Lifetime spent approx. $1100. Up until April 2016 we had only spent $192 on paid advertising. As of April 2016 we used this marketing traction channel to find our audience and refine our ads to effectively reach our target audience.
- We have also participated in two trade events. The first trade fair was Life Instyle in August 2014. We attended this fair as we wanted to gain national stockists. Unfortunately we discovered the stockists were not 100% the right fit for us as they predominantly dealt in smaller homewares items, not furniture. We also participated in DEN Fair in June 2016, this fair was beneficial in meeting a lot of trade clients as it predominantly focused on innovative design with quite established Australian furniture designers.
What are the primary growth opportunities that you see for the business going forward?
- Expanding into new product categories which are related to the bedroom e.g. linen, cushions, throws, prints etc etc turning the website into more of a diversified online store. Whether it is a dropshipping site using other brands products or creating Mexsii branded products with the exclusive artwork designs.
- Adding more bed head design styles into the range
- We have created a bed base design that we have been market testing and have already sold 2 of these, simply via our social media sites. Adding this to the website and reducing COGs would be imperative for this product to work.
- Sourcing product from overseas to reduce COGs.
-Creating more trade relationships and securing a hotel contract.
- Holding stock of popular styles to minimize COGs
Are there initiatives you have yet to test explore and you think may lead to significant growth?
- Souring major components from overseas
- Selling more ‘bedroom accessories’ using our exclusive artwork designs for cushions, linen, throws, wall art to create a complete bedroom package
Does the business carry any inventory? If so, approximately how much inventory does the business keep at any given time and is any current inventory included in the price?
No, as we make to order we rarely keep inventory. We do currently have the following on hand:
Resin Buttons – approx. $2000 (223 buttons)
Queen Bed Head Fabric Prints – $850
King Fully Upholstered Bed Head - $800
Sample Double Fully Upholstered Bed base and bed head - $1800
Leather Hide - $350
Printed Marketing Material - $360
TOTAL - $6160
Pending when the business sale takes place some parts from this inventory list may no longer be available due to customer orders. However we are more than happy to on sell these items if they are not used for other orders.
Where is the business’s inventory kept? If in a third party warehouse or storage unit, can the rental agreement / lease of such warehouse or storage unit be transferred over to the buyer?
In a Home Office
Is it necessary for the business to keep its inventory in a particular country or a state, in order to retain the current profitability?
Not necessarily. Below is a breakdown of supplier locations:
Plain Fabric – 4 suppliers in total (2 major suppliers) all Victorian based and can ship Aus wide
Printed Fabric – Sydney supplier (ships Aus wide)
Resin Buttons – Currently no supplier, however we do have potential contacts to in order to create more buttons
Timber Legs / Frame maker (for bed bases) – Local Melbourne supplier (new owner could certainly find another local supplier as this would be more cost effective than shipping these items)
Upholsterer – Local Melbourne supplier (new owner may benefit in sourcing an upholsterer local to their state)
There is the potential for cost efficiencies for the right buyer to source some products internationally in order to achieve greater cost efficiencies.
How are shipments into and out of the warehouse / storage units managed?
Shipments are manually hand wrapped by Sarah and myself. We then ship these out with TNT. We do not have an official Mexsii box for all bed heads, however we do have some suitable cardboard boxes we retrofit to each order that goes out. Purchasing and holding specific King and Queen size boxes will significantly reduce time required work in the business as this task could be done by the upholsterer as they complete each order and be shipped directly from them.
We also do not have our own TNT account and currently use Sarah’s husbands company account for this, for which we are then invoiced courier charges. The purchasers of the business would need to organise their own courier.
How many suppliers does the business use and for how long has the business used these suppliers?
Plain Fabric – 4 suppliers (2 main suppliers), one has been used from mid 2015, the other has been used since the beginning of Mexsii
Timber Leg Supplier / Bed Base Frame – 1 supplier used from July 2016
Upholsterer – One Supplier (with 2 back up suppliers) used from June 2016
Printed Fabric – One Supplier used from July 2015
Textile Designer – this changes pending the collection
Standard Courier – One supplier used from Feb 2015
Website – One Supplier used from Aug 2015
Does the business benefit from any volume pricing arrangements with any of its suppliers?
Yes there are discounts when ordering certain meterage of printed fabric and plain fabric. We also had cost breaks with our previous resin button supplier.
Our timber leg supplier and frame maker has also discussed discounts upon ordering multiple units.
Explain your payment terms with your supplier(s)?
Most of our suppliers are cash on deliver, or 7 days of invoice
Do you have written agreements with said suppliers in place, and are such agreements transferable to the new owner?
There is no official written agreement that is signed and dated, however all agreements with suppliers are in writing in emails which could be provided to new owners.
How often and through which channel do you pay your suppliers for purchased goods?
Orders are generally placed every 2-3 weeks depending on delivery dates and current supplier leadtimes. Most of these invoices are grouped and paid once per week on Monday. Other invoices, such as our fabric printer, need payment over the phone in order to release the goods.
What is the average lead-time from the day order is placed until customer receives the good.
6-8weeks depending on customer location for delivery
Have you changed suppliers in the past, if so, why? Yes
Fabric Supplier – problems with the quality of the print
Upholsterer - problems with the quality and timeliness of the production
What is the site’s average Refund/Return rate over the last 12 months? What is the primary reason for the returns?
We have always maintained a full refund policy. We have only ever had one customer exchange her bedhead for another bedhead as she felt that having a full artwork fronted bed head was a bit too much for her and wanted only an artwork border instead.
How has the business evolved since it was first established?
When we first launched we had a pretty standard website with a collection of 7 artwork bed heads in one height only. We then went on to create a kids collection, another artwork collection and introduce two additional heights for each size (king, queen, double). In Feb 2016 we launched our current website which enables mass customisation of a bed head online using 3D technology. The current collection features all new Mexsii exclusive artwork, Mexsii exclusive resin buttons and a curated range of plain linens (something our previous customers had been asking after). We have also introduced another bed head style (a removable slip cover) and a bed. Both of which have sold without being listed on our website.
All manufacturing was done in house until June 2015, we then outsourced to local upholsterers.
Are you the original owner of the business? If not, when did you purchase it and how has it evolved since?
Yes, it is a partnership with Sarah Green.
Are there any social media accounts included in the sale? If so, please list them along with the URLs to such accounts.
Are there any mailing lists included in the sale? If so, which service providers are such lists held with and how many subscribers do they have?
Mail Chimp – 1893
Are there any rights, trademarks, intellectual property included in the sale?
Intellectual property as below
- fabric designs
- resin button design
- 3D Bed head Designer on the website
Does the sale include existing customer data? If so, in which format is this provided and how extensive is the customer database?
Yes – we have a database of trade clients. This is held with Capsule, there are 413 contacts included. Most have complete contact details and notes about contact we have had with them
Where is the site hosted and does this need to change after purchase?
It is a customised build, hosted by the web developers
Has the website changed platforms in the last 2 years?
Yes, it began on Shopify then moved to Squarespace, now it is a fully customized website
Please describe your main competitors, and what makes the website better than its competition?
Our website enables customers to select from Mexsii exclusive items which cannot be purchased anywhere else. The site has a mass customisation 3D tool allowing customers to design their own bed head online, seeing it from various angles and even positioning it in-situ. You can also shop directly from the gallery or edit from the gallery.
We have also partnered with three unique creatives which are labelled Mexsii Muses each depicting their own unique style.
- A long standing bed head and accessories online retailer. They have been around for approx. 10 – 15 years and has 2 showrooms. Heatherly has a wide variety of bed head designs, however does not produce their own fabric designs or unique buttoning options.
Another online bed head supplier
A lower cost online bedhead supplier
Local Upholstery Shops
Trade clients will use their own local upholsterers for specific jobs
Trade clients will often use this company as they provide a wide variety of bed heads at competitive prices
Do you own any other internet-based businesses? If so, are any of them related to the website being sold?
Are you willing to sign a 3-year non-compete contract in the industry that the website operates in?
Are there any geographical limitations to the potential buyer of the business (i.e. do they need to be based in a particular country, region or time zone to handle customer enquiries or to take over the financial and other accounts)?
No. This business currently would suit someone in the Australian market as we have a supplier chain set up here. In saying this it could also be taken overseas if the right fabric printer and productions partner was sourced
Why is Google Analytics data only available since February 2016?
This is when the new website launched and our developer connected a new account, I have just shared the previous google analytics account as well.
Do you know why traffic is declining?
In Feb -April we had a lot of press following the website launch and ran a bed head giveaway promotion, this will be the higher traffic seen then. Since then we have been doing tests on Facebook traffic and retargeting ads, which we have only been spending small incremental amounts on to test audiences. We know that press drives traffic to our site but wanted to test specific details of our market by using Facebook targeting. We were testing different targeted audiences to see how this effected traffic and sales, with the plan that this could supplement traffic from press, as you can see press creates short sharp 2-3 day peaks in traffic and we wanted to test Facebook advertising to fill in the gaps between press articles.
Do you know why organic traffic suddenly dropped in April this year?
We had press features in Feb - April and running the bed head giveaway promotion, so the drop would be due to this I think.
Why were there no sales in November and December 2015?
Our website was taken down due to problems with the development of the new site.
What's the average order value?
What contributed to the increased revenue in October 2015 and July 2016?
Oct 2015 - 25% off Sale (we hold this yearly), July 2016 - sales of newly developed beds
When did the business start generating revenue?
Is the trademark included in the sale?
What payment processor are you using?
Stripe and Eway
Can you provide live revenue verification?
I’m happy to provide live verification, just let us know how we do this for Stripe and Eway. Decorator sales are also made by direct deposit
Largest, Award-Winning Wholesaler (LOI Executed, Sell Pending)
Largest, Award-Winning Wholesaler With Prime Real Estate (Executed LOI)
Oklahoma City, OK
Rare listing of the largest, award-winning wholesaler in Oklahoma! This business was established in 1989 and has a stellar track record of consistent growth. Since 2004, the combination of inventory and revenue growth has averaged 104%. Sellers have spent over 30 years in this industry and have recently decided to retire.
Possible LOI already by the 2nd largest industry leading supplier, so please ONLY SERIOUS BUYERS INQUIRE.
Asking Price is $10,350,000.00.
Combined Real Estate value: $8,350,000.00.
F,F&E value: $1,299,000.00.
Inventory value: $902,437.00.
*Seller wishes to remain confidential. All Inquires must go through iMatch Franchise and Global Investments or The Brown Group. Confidential details, financials and real estate values will only be released to Registered Buyers who complete both an NDA and provide us a copy of their Assets and Liabilities.
Unique Sunglass Business For Sale
Patented One of a Kind Visor Protection Sunglasses
Buzzards Bay, MA
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