Pet Bird Eco-Lighting Brand with Direct-to-Consumer Sales – 77 Average Order Value
Website Closers presents the leading LED natural light for bird enthusiasts, avian rescue rehab facilities, and universities across North America. The products, designed by the founder, are a first in eCommerce and immediately found a receptive customer base. Ninety percent of sales are derived from Amazon, with a Shopify-built website accounting for the remainder. Little marketing is done for either channel. Starting in 2018, the brand has achieved significant sales increases each year. In 2020, sales nearly doubled, and did so again in 2021. The business is on track for another excellent year. Revenue doubled in the first quarter of 2023 as demand has continued to grow in North America, and the brand launched in Europe and the UK. The public appetite in Europe has been insatiable, and products sold out in short order after the initial launch. Sales channels in Europe and the UK have now been established, and the brand’s supply chain partner is ready and able to increase production. Gross margins are around 50%, and as volume increases, management expects to improve that number by an additional 4% this year.
OPERATIONS
The owner dispatches Shopify orders daily and sends bulk stock to Amazon FBA facilities twice monthly. These include US, Canadian, UK, and German fulfillment centers. Digital marketing efforts are purposefully minimized because of sales demand. An agency handles PPC campaigns for all Amazon storefronts with a modest budget. When the owner has run Google Ads, Amazon promotions, or social media campaigns, he has needed to stop them because of inventory shortages. For example, a six-week campaign on Facebook and Instagram doubled sales on the Shopify store.
Products are sourced from an Asian manufacturer with a long-standing and solid relationship. The manufacturer builds and packages the proprietary products exclusively for the brand to its design specifications. Orders are placed every three to six months when funds are available. The minimum order quantity is 3,000 units, and the terms are a 40% down payment and 60% before shipping. Due to the explosive growth in sales, the business frequently sells out.
MARKETING AND KEY METRICS
Little marketing is done for either channel. Digital marketing efforts such as PPC campaigns for Amazon storefronts have a modest budget, and other campaigns have been halted due to inventory shortages. However, when campaigns have been run, they have shown significant impact, doubling sales on the Shopify store.
Sales are healthy throughout the year, peaking from November through January. Starting in 2018, the brand has achieved significant sales increases each year. In 2020, sales nearly doubled, and did so again in 2021. The business is on track for another excellent year. Revenue doubled in the first quarter of 2023 as demand has continued to grow in North America, and the brand launched in Europe and the UK.
Gross margins are around 50%, and as volume increases, management expects to improve that number by an additional 4% this year. The average order value is $77, with no concentration of sales on any given SKU or client. Sales channels have been established in Europe and the UK, and the brand’s supply chain partner is ready to increase production.
The typical customer is a middle to upper-middle-class empty nester woman whose birds are her replacement children and who has the means to spare no expense on the well-being of her pets. The pandemic introduced an enormous number of millennials to the hobby, and the industry is still benefiting.
BUSINESS MODEL & RESOURCES NEEDED
No employees work for the business, but Amazon PPC, bookkeeping, and accounting are outsourced. The existing owner is available for up to three months to help transition operations and customer support.
THE INDUSTRY
The pet bird industry has seen steady growth over the years, owing to an increasing interest in exotic pets, rising disposable incomes, and the trend toward urbanization. The global market is projected to grow substantially, driven by increasing pet ownership, awareness about the benefits of keeping birds as pets, and the availability of various species and breeds. Furthermore, there has been a shift toward sustainable and ethical practices, with an increasing focus on bird welfare and conservation. This trend is likely to continue, with more consumers seeking pets and products that prioritize the health and well-being of their birds.
OPPORTUNITIES TO SCALE
As prosperous as this business is, scale opportunities are abundant. A capital injection to purchase inventory is the quickest method to immediately boost the top and bottom lines exponentially. From there, management can increase its PPC budget on Amazon, expand the business-to-business product line, and introduce complementary products. Reigniting social media campaigns is proven, and implementing an influencer marketing campaign is an enticing prospect.
Asking Price: $2,500,000
Gross Income: $911,500
Cash Flow: $532,221
Year Established: 2016
Employees: 1
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