Explosive Growth of Amazon FBA Nutritional Supplements Brand in Subscribe & Save Customers
A successful eCommerce brand that provides high-quality, effective and affordable nutritional supplement products in gummies, capsules, and powders formats. With over 16 products and tens of thousands of strong reviews, the brand has grown exponentially with a 2X+ Growth Trend for 2022 over Last Year. The company has a D2C website and a growing Subscribe & Save customer base of 9,500+ customers, with the top 3 selling products on Amazon being in Gummy Form.
OPERATIONS
The company combines market analysis with its manufacturers’ innovation to identify trending products with lower barriers to entry. Amazon-specific tools, such as Helium 10 and Jungle Scout, are used to develop launch strategies to market. The company sources ingredients domestically and internationally and purchases all products from manufacturers in the United States under their own brand name. Inventory is directly shipped from the manufacturer to Amazon warehouses, and 90% of inventory, at any given time, is held by Amazon. The company handles supplier relations, inventory forecasting, finances, new product development, marketing, graphic design, shipping, website orders, and customer support. No additional employees are needed to run the operation.
The company holds 2-12 months of inventory, depending on SKU, and has negotiated net 30 payment terms with its manufacturer. All products are purchased from manufacturers in the United States, with ingredients sourced both domestically and internationally. Inventory is delivered directly from the manufacturer to Amazon warehouses, and Amazon holds 90% of inventory, with inventory levels range from $150,000 to $250,000 throughout the year. The supply logistics include supplier relations, inventory forecasting, and finances.
MARKETING AND KEY METRICS
With a 4.8 Amazon Seller Rating and all products sold via Prime 1- or 2-Day Shipping, the brand attracts sales through its Amazon Storefront and is scalable with digital advertising beyond Amazon, affiliate marketing, a strong email campaign for sales and promotions, and influencer marketing on social media, particularly Instagram and TikTok. Expansion into Walmart and other big box stores is also possible. Furthermore, outsourcing the Amazon storefront to an experienced agency would likely see an enormous improvement in TACOS, a boost in revenue, and the benefits of marketing expertise that the current owners don’t have.
The eCommerce company has grown exponentially, and there are excellent opportunities for a new owner both on Amazon and off Amazon for growth. Shopify-built website sales make up a fraction of total sales, presenting a huge area for growth and the opportunity for a new owner to increase margins while driving new customers to the website. The sector’s growth is explosive as more people realize the importance of healthy ingredients in their diets.
The company’s average order value is $18 across its 16 products, with strong margins that appeal to a broad audience. Inventory levels range from $150,000 to $250,000 throughout the year, and the business enjoys relative consistency in sales throughout the year, with slightly slower summer months. The company sees increasing success in its Subscribe & Save customer base, which currently stands at 9,500+ customers. Additional key metrics include strong reviews across its products, a 2X+ growth trend for 2022 over last year, and a doubling in profit in the TTM compared to 2021.
The company caters to a broad audience with its effective and affordable nutritional supplement products in gummies, capsules, and powders formats. It has attracted a growing Subscribe & Save Customer base of 9,500+, and the top 3 selling products on Amazon are in Gummy Form.
BUSINESS MODEL & RESOURCES NEEDED
No additional employees are needed to run the operation, with the owners working five hours each on the business weekly, handling supplier relations, inventory forecasting, finances, new product development, marketing, graphic design, shipping, website orders, and customer support.
THE INDUSTRY
The natural supplements industry has grown exponentially worldwide, driven by increasing consumer awareness towards personal health and well-being. The working population around the globe is struggling to fulfill daily nutrient requirements owing to hectic work schedules and changing lifestyles, leading to the increasing dependence on supplements to satisfy the nutrient requirement due to their high convenience.
OPPORTUNITIES TO SCALE
Abundant scale opportunities exist for a new owner, who can scale the operation with mass retail while creating a new revenue stream by venturing into wholesale. With the current owners lacking advertising knowledge, there are excellent opportunities to scale the business drastically with proper advertising on the right channels. A new owner may also expand the brand to parts of Asia and South America, and other market segments, expand product offerings into different verticals, and tap into digital advertising beyond Amazon. The business has a long runway, increasing sales each year, with strong gross income and cash flow.
Asking Price: $3,000,000
Gross Income: $2,742,827
Cash Flow: $723,218
Year Established: 2018
Employees: 2
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