Scaling Up a 10-Year B2B Private Label Internet Company to Big Box Retailers
A New York-based B2B wholesale designer and importer that has spent a decade in product design and development for enterprise-level businesses and big box retailers. Their fast turnaround time and ability to design specialized items have made them stand out in the niche.
OPERATIONS
This company works with clients to review trends in home product categories, design new products, and source and ship to their distribution centers with a fast and efficient turnaround time using their manufacturing partners in China. With a low overhead and dropship fulfillment model, the company enjoys consistent profit margins of 22%.
Once a product has been designed, the company relies on its manufacturing partners in China to create and drop ship it straight to the client’s distribution center. The products remain proprietary and are sold under the company’s brand. The company can easily relocate, and adding more workers can help focus on major clients and meet rising customer demand.
MARKETING AND KEY METRICS
The brand has not done any marketing, thanks to its long-time clientele, repeat business, and referrals. As a B2B business, it has not needed a website. To expand its customer base, the company could consider establishing an eCommerce presence, a strong SEO program, a blog about their products, and social media marketing campaigns.
The company could establish an eCommerce presence by listing its products on top eCommerce sites such as Amazon, Walmart and Etsy, or via their own website. It could also scale by adding more unique products and categories, such as new home décor products, and expanding its sales and marketing efforts through social media and SEO programs.
The company enjoys strong repeat business thanks to its fast turnaround time, specialized product designs, and efficient dropship fulfillment model. Its business model also allows it to ride exceptional hot product categories and change as market conditions and consumer demands do the same.
The company’s customer base comprises enterprise-level businesses and big box retailers that purchase large volumes of branded goods for their format based on discount pricing. They work directly with buyers across a wide variety of product segments, who throw new product ideas based on customer feedback at the company.
BUSINESS MODEL & RESOURCES NEEDED
The company’s two owners manage the relationships and sales and have chosen to focus on a select group of clients. As the business grows, new employees can allow the company to take on a larger number of clients and put a stronger focus on major clients.
THE INDUSTRY
This company operates in the product design and development segment of e-commerce, providing a large array of home products to enterprise-level businesses and big box retailers. It has dominated the niche and has been providing intricate designs and specialized items for ten years, building a loyal customer base and attracting sales from major brand name retail stores such as HomeGoods, Marshalls, Ross, T.J. Maxx, and more.
OPPORTUNITIES TO SCALE
If the company establishes an eCommerce presence, it can scale into major e-commerce platforms like Amazon, scale into more unique products and categories, and hire more workers to meet rising customer demand as it continues its remarkable growth.
Asking Price: $11,000,000
Gross Income: $13,000,000
Cash Flow: $2,663,631
Year Established: 2011
Employees: 4
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