Hypergrowth Wholesale Distribution

Madison, WI (Dane County)

Seller Financing Available
Hypergrowth Wholesale Distribution
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Asking Price: Get Financing: $5,000,000

Cash Flow: $1,300,000

Gross Revenue: $3,400,000

EBITDA: N/A

FF&E: N/A

Inventory: $950,000

Lease Rate: $0.30 /SF/Month

Established: 2016

Hypergrowth Wholesale Distribution

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Business Description

VOIP Office Phones Distribution : SBA Qualified!!

Asking Price: 5M
Cash Flow: 1.3M
Gross Revenue: 3.4M
EBITDA
FFE
INVENTORY: 950K (INCLUDED)
ESTABLISHED: 2016
EMPLOYEES: 13
BUILDING SQ FOOTAGE: 25,000

Business Description:

'CONFIDENTIAL} is a nationwide wholesale office phone distribution company. Owners have been in the VOIP office phone market for a combined experience of 15 years and in the last 30 months have added new strategies to a mature market that have exploded our growth. We buy phones in bulk from Fortune 1000 companies nationwide. Once we bring them in, we make a series of replacements and upgrades and resell the phones in smaller lots to other various dealers and SMB businesses.

Technology continues to accelerate and what we use in the business market on a day to day basis continues to upgrade what seems like annually. As this swoon of new technology hits and companies become anxious to have the latest and greatest tech, their old technology still has some life in it. It may actually be worth some value in the hands of the right customers. While that may be true, the corporate environment is very quick to dismiss that potential value in order to quickly just remove it from their workspace. Electronics have become very disposable in the last 10 years, but that trash is making smart marketers and asset management companies a lot of found money.

We have found a unique process that helps us acquire legacy equipment for below market prices and redistribute back into the supply market of dealers. Why is this important? Some of this legacy equipment is relatively hard to come by and large corporations do not want to switch over to newer technologies when it’s easier to source as needed rather than overhaul the whole system, this quagmire situation keeps the units in demand and the prices high.?
This business opportunity was born out of experience and collaboration of three backgrounds. IT asset management and business development, wholesale telecom resale, and electronics recycling operations

We have 8-10 years of connections, competitors, and suppliers accrued and have leveraged them all into suppliers of our resale division

ACCOMPLISHIMENTS:
?In 2016, We did 1m in 10 months, In 2k square feet.?In 2017, We did 2.1m in 12 months. In 4500 square feet.?In 2018 We have made 2.5M through Sept and on track to do 3.6M in year 3 and now have outgrown 30k square feet.

AREAS OF IMPROVEMENT:
Right now were struggling with what I continue to address as good problems. Constraints and bottle necks in our process, inventory management, cash conversion cycles.

At any any given time we can be 100k-150k phones overbought and not enough time in the day to get through all the material to capture full cash conversion cycles on our buying.?Our methods are unorthodox and lack process that could help us achieve easily 2x on our stock.
90% of our revenue comes from wholesale clients. We could certainly capture more retail customers at a higher price and in smaller quantities but prefer to deal wholesale. If we had a good go to market strategy or online sales strategy, that would change the landscape and there is tons of upside as that’s where all of our wholesale customers sell.

This opportunity is absolutely ripe for the right buyer. Someone that brings the analytical process to the model. Process, process, process. If we could just get our process tighter we could get to 10M within one year to 18months. Someone with a growth mindset that has scaled a wholesale business would be an ideal candidate. Its very rare to find an opportunity that has grown to this level and is experiencing such fast rate of growth! If you feel you might be qualified or have relevant experience, inquire quickly as this opportunity will get snapped up quickly.

Detailed Information

Inventory:
Included in asking price
Real Estate:
Leased
Building SF:
25,000
Lease Expiration:
12/31/2020
Employees:
13
Facilities:
TERMS OF THE SALE: Included in the sale, is all the inventory and assets which totals 750k in inventory(we spend 100k on inventory a month), and we always sell to some of our customers on net terms which we keep 150-200k in monthly receivables at all times. We signed a 3 year this time last year and built out to our liking. We have filled up this facility and have the option to expand. At current growth rates, that will happen soon. Building is under lease for 2 more years at current rates
Competition:
A New federal ban on exporting of this product to developing countries has our target market of ideal clients scrambling for domestic options. We are currently onboarding several new customers per month. Currently we are the largest and one of the only service providers that provide this service. We have continued to grow and expand all while holding a net profit margin north of 40%. Through September, the business has cleared 1M in net profits.
Growth & Expansion:
Our methods are unorthodox and lack process that could help us achieve easily 2x on our stock. 90% of our revenue comes from wholesale clients. We could certainly capture more retail customers at a higher price and in smaller quantities but prefer to deal wholesale. If we had a good go to market strategy or online sales strategy, that would change the landscape and there is tons of upside as that’s where all of our wholesale customers sell.
Financing:
We will not seller finance any portion unless higher multiple
Support & Training:
All employees stay in place with the exception of owners. 60 day transition period will be included from all 3 owners.
Reason for Selling:
Unqualified to get to next level
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Business Listed By:
Kyle Mallien

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