High-Demand Watchband Accessories Brand for iPhone Smartwatches – 30% Repeat Order Rate, $46 AOV, and Easy to Run Transition
This online business sells smartwatch accessories like watch straps, cases and stands. They have a loyal customer base that appreciate the breathability, durability, stretch and ease of swapping out colors and styles. Customers are based mostly in the US and Canada, with sales in the UK, Australia, and Europe. Their digital marketing strategy is direct response marketing via Facebook and email, with an ROI of 1.5-2X on Facebook Ads and 48-50X from email marketing. The business operates with two part-time contractors, whose work includes customer service, social media, and ad hoc admin work. The owner spends around 25 hours per week working on tasks including marketing, finance, inventory, and new product development.
OPERATIONS
The company’s SKUs are stocked in a 3PL partner’s warehouses located in Georgia and California, where inventory is held. The sourcing of products is via a partner that manages relationships with manufacturers in China. The business orders inventory four times annually for restocks and new product launches, with all fees paid for prior to production and production shipping costs covered. At the maximum, the company stocks 12 months of inventory based on SKU velocity.
The company sources products through a partner that handles relationships with manufacturers of straps, cases, stands, etc. in China. All inventory is stocked within two warehouses in the US, primarily in Georgia, with California warehouses stocking best-sellers for faster west coast shipping. The business typically stocks six to twelve months of inventory based on SKU velocity. Products are shipped from 3PL warehouses based on orders that are shipped daily averaging around 22 orders.
MARKETING AND KEY METRICS
This business utilizes direct response marketing via Facebook ads and email marketing campaigns. Their Facebook ads have the goal of having someone see an ad, click on it, and make a purchase on the first site visit. Facebook ads feature engaging video creatives highlighting the product features and benefits, as well as the value the brand offers. Email marketing includes comprehensive automation flows, campaigns for new products, sale events, marketing to audience segments, and community building. The ROI on email marketing is around 48-50X, and email campaigns make up around a third of total revenue.
The online business is expanding its reach from its US and Canada base to Europe, the UK, and Australia, where smartwatches are increasingly popular. The brand primarily sells its products on its Shopify site, with potential for sales through third-party marketplaces like Amazon and Walmart.
The business has an average order value of $46, a repeat purchase rate of 30%, and the typical customer is a woman aged between 35-65. Revenue is driven by sales during Q4 and the holiday shopping season.
The majority of customers are women aged between 35-65 who are based primarily in the US and Canada, with other regions including the UK, Europe, and Australia. The brand’s products are popular among wearables users who appreciate the ease of swapping out colors and style of straps, cases, and stands.
BUSINESS MODEL & RESOURCES NEEDED
The business operates with the owner who oversees marketing, finance, inventory, and product development tasks. The day-to-day operations can be fully automated, which involves customer service handled by virtual assistants, both of whom have been with the company since inception. Two part-time contractors are used for customer service, social media, and ad hoc admin work on Fiverr and Upwork.
THE INDUSTRY
The business operates in the smartwatch accessories industry, with revenue driven primarily by sales during the Q4 and holiday shopping seasons. The brand is popular among women aged between 35-65 in the US, Canada, Europe, and the UK, where smartwatch usage is on the rise. The industry outlook is favorable as more people start adopting wearables, with Apple, Samsung, and Fitbit as major players in the industry.
OPPORTUNITIES TO SCALE
The business has potential opportunities to grow through expanding product offerings to offer multiple styles and colors. Starting to sell products on third-party marketplaces is another opportunity the company could leverage. Developing a subscription-based model for loyal customers is another potential area for growth.
Asking Price: $410,000
Gross Income: $479,608
Cash Flow: $137,160
Year Established: 2019
Employees: 1
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