20 Year eCommerce Brand in the Office Supply Vertical – 75% Repeat Order Rate – $1,000 AOV – $15,000 LTV – Growing Presence on Amazon

ValleyBiggs® presents an eCommerce Business that has become one of the largest Independent Office Supply Resellers in the U.S. With a phenomenal 40,000+ SKUs and nearly 20 years of experience cultivating relationships with top brands across the U.S., the company has continued to grow both during and post pandemic.

The company’s expansion into the Amazon.com marketplace is now generating 33% of overall company sales and is projected to rise to 50% by next year. As the company continues adding new brands to its catalog, and new manufacturers remain eager to work with them, the company is ideally positioned to enjoy vibrant revenue growth in the short term while setting itself up for continued expansion for many years to come.

Now 100% B2B eCommerce

The company has made the complete switch to becoming a 100% B2B eCommerce one-stop shop for all office supply, janitorial, and breakroom products. The company has the unbeatable mix of a catalog that exceeds what many big box office supply retailers offer, combined with competitive pricing and fast deliveries. Their growth in profit is partially being driven by the fact that this company enables customers to buy in bulk or to make small orders, whichever is more convenient. Bulk pricing is available even on some small orders, and as a result, the company now has a whopping 75% Repeat Customer Rate and plenty of corporate customers who are buying in large quantities. 65% of their sales are Bulk Orders.

Their uniquely priced bulk offerings are available through their manufacturing agreements, and this has given the company a $1,000 Average Order Value and a considerably higher $15,000 Lifetime Customer Value.

It would be difficult to understate how profitable and evergreen this industry is, since literally millions of businesses and individual consumers rely on office and breakroom supplies, transforming the global office supplies market into a $130.5 billion industry, one projected to grow to $149.4 billion by 2028.

The industry continues to evolve, and one of the sharpest trends has been toward online purchasing rather than through local retail shops. This brand has been a forerunner in this field, having developed alliances with important suppliers in the vertical, and having dramatically expanded its line of SKUs to ensure they provide everything a business would need when it comes to office supplies.

Now, having expanded onto Amazon and more recently Walmart, the company is introducing itself to an entirely new audience, and sales are reflecting that. For a shrewd investor, this is an opportunity to run one of the largest online office supply businesses as the demand for these products remains consistent, and there are significant scale options for the buyer to tap into.

The Company

Launched nearly 20 years ago, the company set out to provide customers with everything they could need when it comes to office and breakroom supplies and janitorial equipment. The company has enjoyed rapid growth in recent years, but their secret sauce comes from 20 years of relationship building with their vendors, something nobody could start up on their own any time soon. This has become a very steady operation, although the addition of Amazon as a new sales channel has opened new doors for them to boost sales and add private label products to their assortment, an effort that has already begun and is doing exceptionally well.

While their Order Value has averaged around $400 historically, it shot up to $1,000 with the growing number of large bulk orders the company receives. The company is now exploring the option of adding subscription services, particularly now that the business has developed its own private label toner, which was just launched and offers this company significant upsell and cross sell opportunities to its massive customer base.

Overall, the company has so many SKUs that eliminating any individual product would pose no risk of lost sales, keeping their Concentration Risk low. Their revenue is being generated across thousands of different products, which come from top manufacturers such as Hewlett-Packard, Avery and Tops Friendly Market. At least half of all sales go directly to wholesale clients from the manufacturer.

Seasonality is not a factor for this company, with back-to-school buying in the spring and summer months as their peak times. Their customer base falls into several categories, including corporate customers, smaller businesses, individual consumers (particularly on Amazon), and schools. The nature of their products creates an evergreen and universal demand for their products, which include cleaning, office, and coffee/snack supplies.

Operations

The company employs a Hybrid Inventory Model, with Dropshipping for orders that come through their website, and Fulfillment By Amazon for most deliveries through Amazon. Inventory is primarily stocked at Amazon’s FBA warehouses for quick replacement of items as orders come in.

Since the company relies on Dropshipping, they have traditionally maintained zero inventory, although that changed once they launched on Amazon, and they now maintain $800,000+ worth of inventory. That typically turns over within 90 days.

The business has an experienced team in place that includes full-time workers overseeing website management, customer service, purchasing, and collections, and strategic partners for Amazon shipping and Amazon marketing. The current ownership works on a part-time basis, focusing on tasks such as vendor and manufacturer relationships, pricing strategy, accounting, and marketing.

Marketing

By focusing on selling products by the case or in bulk, the company has relied on an effective in-house SEO program to help them rank high for literally thousands of wholesale office and janitorial keywords, and this has delivered a high amount of traffic, bringing their website 60,000+ unique monthly visitors.

The company encourages those visitors to provide their email addresses and are given incentive offers once they do. With 80,000+ subscribers, the company effectively uses email marketing to increase its Repeat Customer Rate, with those subscribers receiving several emails a week.

This business also attracts profitable new customers through its affiliate program that encourages other sites to promote their offers, giving them a commission whenever a sale is made.

Additional marketing tools include PPC ads run on Google, promoting special offers on Facebook (where they have 1,600+ followers) and Instagram ads, and bundling products on Amazon to increase their margins there.

Summary

This seasoned company has become a powerhouse within the lucrative office supplies industry by making available anything their customers could possibly need for an office, by sourcing from top-name manufacturers for the highest quality products, and by offering competitive pricing and fast service. This company’s decision to offer both small sales and bulk purchases has given them a loyal customer base that keeps coming back to buy from them over and over again.

With that kind of steady recurring revenue and some enviable scale options, this is a true goldmine for an investor looking for a high-performing business. The current ownership is available to provide their expertise postacquisition to help the new owner grow this business to $50 million in revenue within the next two to four years.