High-Growth Ecommerce Retailer of Video Game Equipment: A Must-Have Opportunity
This six-year-old electronic retailer specializes in video game equipment offering more than 2,000 unique products with low concentration risks. It has a strong Amazon Seller rating with a solid foothold in the console gaming community. This seller has been able to appeal to its consumer base without any advertising spend, mainly through searchability and organic growth. The business model minimizes overhead costs with a low-risk inventory system. With extensive growth opportunities, this seller could expand its SKU spread, website creation, vendor relationships, brand building, private label development, and staff addition. The no-risk inventory model allows for maximized profits. Currently owner-operated, daily tasks could be minimized with the addition of a product buyer, order packer, 3PL, or virtual assistant.
OPERATIONS
This business model minimizes overhead costs and maximizes profits by shipping all products in-house with a no-risk inventory model. The company fulfills an average of 50 orders every day with an average order value of $115. Storing all items short term and on-demand, the company requires little storage space and almost no held inventory meaning it can be run out of a home office. Daily tasks center on product ordering and shipping, shipment scheduling, and minor customer service concerns. Future opportunities to expand the business include channel development, website creation, vendor relationship building, private label development, and addition of staff.
This business maintains a no-risk inventory model to maximize profits. It stores all items short term and on-demand meaning little to no storage space is required. Future supply chain expansions could be achieved through wholesale acquisitions and direct vendor relationships. Furthermore, an on-demand 3rd party logistics partnership could ensure that the company remains scalable and cost-effective.
MARKETING AND KEY METRICS
The business has used a powerful Amazon storefront to drive organic growth. The seller has built a brand with a strong personality that will expand the business’s appeal and consumer loyalty. Future tactics to enhance scalability include SEO, advertising spend, social media, and paid promotions.
The business has made use of a powerful Amazon storefront to reach out to its customer base and expand its growth.
This business has a 70% YOY earnings growth rate with a 22% repeat order rate. The average order value is $115, with around 50 orders processed every day. It’s SBA pre-qualified and has minimal overhead costs.
This business has a loyal customer base within the video game equipment industry with a 22% repeat order rate. It appeals primarily to console gaming communities.
BUSINESS MODEL & RESOURCES NEEDED
This business is currently owner-operated with daily responsibilities centering on product ordering and shipping, shipment scheduling, and addressing minor customer service concerns. New and existing vendor ties will work to expand the business with the addition of a product buyer, order packer, 3PL, or virtual assistant to address many of the day-to-day operational concerns.
THE INDUSTRY
This business is within the video game industry and specializes in video game equipment. It has a solid foothold in the console gaming community with room for expansion into different consoles, mods, games, and accessories. The industry is rapidly growing with the video game industry projected to reach $180.1 billion by 2021. Major players in the industry include Sony Corporation, Microsoft, and Nintendo.
OPPORTUNITIES TO SCALE
This company has plenty of growth opportunities like channel development, brand building, website creation, vendor relationship building, private label development, and the addition of staff. Being a leader in this lucrative market, it could add new consoles, games, mods, and accessories through supply chain connections. Furthermore, the business could build new and existing relationships with vendors to expand its current offerings. This is a promising investment opportunity that is well positioned for rapid and reliable growth for new ownership.
Asking Price: $875,000
Gross Income: $2,866,688
Cash Flow: $223,601
Year Established: 2014
Employees: 1
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