CBD Brand Boasting 41% Recurring Customer Rate Across D2C and B2B Channels
This relaxing and healing eCommerce Brand is a leader in the field of high potency CBD Products and Natural Supplements. With a 41% Return Customer Rate, the brand has skyrocketing sales for its exclusive hemp derived products, including topicals, tinctures, oils, supplements, foods, and specialized pet products.
OPERATIONS
The brand has achieved success in both direct-to-consumer sales and B2B partnerships with recurring revenue rates in each category. With over 250 SKUs, the brand has an average order value of $85 for B2C sales and $5,000 for B2B sales.
The brand manages supply and logistics through their 5,000 square foot warehouse in California. They stock approximately 180 days’ worth of inventory and ship a minimum of 70 orders per day.
MARKETING AND KEY METRICS
The company has successfully leveraged organic growth through social media and has a growing Instagram account. They also receive over 30,000 monthly visitors to their website, which is the primary channel for sales. The brand has started marketing new SKUs on Amazon, with sales representing 10% of overall orders.
The brand primarily sells through their website, which accounts for 90% of sales. They have also expanded to selling on Amazon, where sales make up 10% of overall orders. To drive growth, the brand could expand their storefront by adding new products and entering the international market. They could also explore other sales channels such as retail and video platforms like YouTube and Vimeo.
Key metrics for the brand include a 41% recurring customer rate, average order values of $85 for B2C sales and $5,000 for B2B sales, and a growing Instagram account with over 30,000 monthly visitors to the website.
The brand has attracted a loyal customer base with highly desirable demographics. About 20% of customers are in the 35-44 age group, while 15% are in the 18-24 and 45-54 age groups. Men and women are roughly split in terms of customer gender.
BUSINESS MODEL & RESOURCES NEEDED
The company has a dedicated team in place, including a vice president of production, vice president of sales, vice president of marketing, vice president of operations, director of quality assurance, logistics manager, and content strategy manager. They also work with freelancers for web development, eCommerce coordination, and visual designs.
THE INDUSTRY
The CBD industry is experiencing rapid growth due to the increasing legalization and acceptance of cannabis products. With medical use of cannabis legal in 36 states and recreational use legal in 17 states, the market for CBD products has boomed. CBD products, known for their health benefits without the high of marijuana, are particularly popular for relieving anxiety, chronic pain, and other ailments. The brand focuses on hemp-derived products and has developed a following with desirable demographics.
OPPORTUNITIES TO SCALE
There are multiple opportunities for scaling the business. The brand plans to launch a new subscription-based/recurring revenue model that is expected to increase sales dramatically. Continued product innovation and new PPC strategies can expand the customer base and drive growth. The brand could also explore retail expansion, trade shows, and increased brand awareness through PPC ads and podcasts.
Asking Price: $5,000,000
Gross Income: $4,493,090
Cash Flow: $904,580
Year Established: 2016
Employees: 25
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