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14 Year DTC eCommerce Brand – Medical Compression & Orthopedic Support Sector – 45% Repeat Customer Rate – 500k Subscribers

Sold
Asking Price $6,300,000
Gross Income $13,708,397
Cash Flow $1,500,503
Year Established 2009

ValleyBiggs® presents a unique opportunity in the eCommerce space to acquire a 14-year-old CPG Brand and one of the largest online US retailers in the Medical Compression and Orthopedic Support Vertical. The company’s specific focus within the Personal Wellness space gives them a solid foothold in an evergreen medical need in an aging population, and an opportunity to grow considerably on the back of already solid growth for over a decade. The business currently offers a mix of its own private label products (via 2 brands) as well as the brands of all the major players in this industry, making it a one-stop shop for all things related to medical compression and orthopedic support.

Sales are currently made exclusively Direct to Consumer (DTC) through a highly optimized Website, which operates on the Shopify shopping cart platform. This represents a massive opportunity to offer products on other marketplaces, at retail, etc. Since this has historically been operated from the website, the company owns all customer data accumulated since its inception, which has provided an excellent recipe for upselling and cross-selling, demonstrated by the 45% Repeat Customer Rate.

Operations & Supply Chain

The company has maintained consistent sales and profitability through recessions, inflation, the global pandemic, economic uncertainty, and any challenge that has come its way. That has resulted in $13 to $14 Million in annual revenue and $1,500,000 in adjusted earnings, with a lifetime customer value of $130.00. The well-managed programs keep customer acquisition costs low, at around 33% of LTV, ensuring new customers coming to the business are profitable from the first order.

Due to the business’s volume at the retail level, its suppliers offer heavy discounts for inventory, and those relationships can be transferred to a new owner. The annual performance review by suppliers has always resulted in the extension of deals to the company.

A hybrid inventory model is used with 70% of merchandise stocked, 10% DropShipped, and the remaining 20% encompassing daily orders arriving at the warehouse from the manufacturers. Around $500,000 worth of inventory is maintained on average, which increases during the holiday season. The inventory turnover is usually 30 to 60 days, and orders are placed daily, including two large ones weekly, making the working capital requirements low for a business of this size.

Between 400 and 500 orders are shipped daily from the company’s 6,000-square-foot warehouse, with the supplementary DropShipping inventory model accounting for more. There is an additional 3,000-square-foot office for customer service, upper management, and shipping services. The warehouse has a management staff and sufficient room for growth for a buyer to add new product lines or diversify SKUs.

Marketing

An agency manages digital marketing, and the approach has been consistently effective. The company aims to stay in the lower funnel and sell efficiently to customers who are not just looking for compression products but also specific brands recommended to them. The primary lead generation channels, in order of traffic, are:

  • Search and Shopping on Google and Bing
  • Retention via Email and SMS
  • Affiliate Marketing
  • Retargeting on Meta and Criteo
  • Organic Search
  • Prospecting on Meta

Sales remain strong throughout the year, peaking from October through January. The typical customer is a female between 55 and 75 who purchases for a significant period. Her initial order is $75, and she has a lifetime value of $130.

Ownership & Staff

The owner focuses primarily on day-to-day operations, including inventory management, accounting, and warehouse operations. 7 additional full-time staff work in customer service and the shipping department. An agency handles SEO, PPC management, and content development.

The owner is excited to find a buyer that can take the reins and run. All necessary transition and training will be provided to ensure the buyer is put into a position of success after closing.

Scale Opportunities

As successful as this business is, the owner has identified various methods to scale the business further. These include enhancing SEO, selling on marketplaces like Amazon.com, extending the product line, adding verticals within Health & Wellness, and enhancing the upselling and reselling strategy.

Summary

The compression market is growing steadily in the US as demand increases for travel, exercise, and everyday basics. The company astutely markets to its price-conscious consumer base with timely and targeted promotions generating consistent sales volume. Much success results from these targeted promotions strategies, the ability to offer free shipping, and swift fulfillment.

Aside from basic entrepreneurial and management proficiencies, few special skills are required to run this business fruitfully. The existing owner is highly motivated to assist a buyer in transitioning seamlessly and enjoying continued profitability and growth.

This Company is Represented by:

ValleyBiggs.com

Tech, Internet & eCommerce Business Brokers

WC 2996

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