Business Start Date: January 2013

Business Price: 2.05M CAD

Gross Sales (2022): $1,132,778 CAD

Net Commissions (TTM): $257,407 CAD

Net Profit (SDE): $16,039 CAD

Business Multiple: 1.8X Sales

Visitors (TTM): 155,600 

Purchasers (all time): 13,778

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The Opportunity 

This business is the nation’s largest, and most popular, online retailer for Canadian wine and spirits. Utilizing a drop-ship model from producers direct-to-consumers (DTC), This business does not purchase, hold/warehouse, or ship alcohol, rather they act as a third-party marketer via the ecommerce website, the main website. In operation for a decade, and still with no direct competitors, it is the only beverage alcohol retailer that is compliant with Canadian wine. Their second line of business, the Canadian wine club website, is a subscription-based asset; a monthly wine club that generates recurring revenue for the company. Their third line of business, the media partner wine club website, is a partnership with the largest media company in Canada wherein they produce and operate a monthly wine club for the media partner's audience. 

In acquiring this company, the buyer will acquire a profitable business that has deep connections, and signed contracts, with the top wineries and distilleries in Canada and which has no direct competitors. They will acquire a company that has over 10 years of consumer trust, has an A+ rating with the Better Business Bureau, and hundreds of testimonials from satisfied Canadian consumers. Finally, they will acquire a signed contract with one of the largest media companies in Canada to be their wine club and beverage alcohol provider.

This business is a lean-running company with a proven track record of success and an exponential amount of potential.

General Highlights

• This business is the only national online wine and spirits retailer that is compliant with Canadian wine and liquor laws. 

• the main website was first to market in 2013, and remains the leader in national online wine and spirit sales with no direct competitors.

• Over 1,500 products can be found in this business online marketplace, 95% of which cannot be found in any liquor store across the country.

• This business has long standing partner contracts with 100+ top Canadian wineries and distilleries.

• This business has a partner contract with the largest telecommunications and media company in Canada, to operate a wine club for their audience.

• This business has an export license that enables them to export any of their producer partners’ products to other countries outside of Canada.

Niche

This business is in the business of selling domestic wine and spirits to Canadians; they are Canada’s largest online retailer of wine and other beverage alcohol products. The Canadian wine market saw $8.5 billion in sales in 2022, with $2.6 billion being sales of domestic wine. The ecommerce website, the main website, is accessible by any Canadian of legal drinking age. The community that This business serves, as a sweet spot, is wine enthusiasts and foodies aged 25-69 years who support domestic products and who wish to access wine from producers across the country. 

Customer Base

•          Main Website

o   # of customers all time (who have purchased): 7,891.

• Location:  ~45% are in Ontario, followed by British Columbia, Alberta, and Quebec.

o   # of customers with a registered account: 8,863.

o   This business customer: on average will make 3-4 repeat purchases. LTV of a repeat customer is ~$500.

o   Avg. bottle price purchased = $27.

o   Avg. basket size = $150.

•          Canadian Wine Club Website 

o   Total # of customers all-time: 5,887.

o   # of active subscribers, July 2023: 630.

• Active subscribers: ~60% are in Ontario, followed by British Columbia, Alberta, and the rest of Canada.

o   Monthly subscribers: On avg. a subscriber will stay in the club for 12 months with an avg. LTV of $1k.

o   Attrition: on average we see about 5% attrition month to month, with slightly elevated rates every 3-6 months due to gift subscriptions of the same length ending.

•        Media Partner Wine Club Website (launched August 8, 2023) 

o   Talk to FIH to get updated subscriber numbers.

Traffic

Data from Google Analytics:

The Main Website

• # of users:

  • Annually:  119k

  • Monthly avg:  9.9k

• # of sessions:

  • Annually:  144.5k

  • Monthly avg:  12k

• Last 12 months:

  • 67% of users that visit the site are in Canada, 17% from the US, 2% from the UK

  • In Canada, 40% of users are in Ontario, 27% in British Columbia, 13% in Alberta, 12% in Quebec

The Canadian wine club website – last 12 months:

• # of users:

  • Annually:  34.5k

  • Monthly avg.:  2.8k

• # of sessions:

  • Annually:  43.6k

  • Monthly avg.:  3.6k

• Last 12 months:

  • 90% of users that visit the site are in Canada, 6% from the US

  • In Canada, 47% of users are in Ontario, 19% in British Columbia, 12% in Quebec, 11% in Alberta.

The Media Partner Wine club website (recently launched)

- Contact FIH for updated traffic statiistics.

Revenue Sources

1. the main website – customers pay for one-off wine and spirits orders using their credit cards. Prices vary depending on the alcohol products selected. This business receives 23% commission on the total bottle price that is listed on the website. 

2. the Canadian wine club website – club members pay either up front for a set term (ie. A 3-month subscription) or they pay monthly as a recurring monthly subscription. Prices are $69 for 2-bottles, $99 for 3 bottles, $197 for 6 bottles, and $395 for 12 bottles; prices include taxes and shipping. This business receives 23% commission on the above listed package prices. 

3. the Media Partner wine club website – club members pay either up front for a set term (ie. A 3-month subscription) or they pay monthly as a recurring monthly subscription. The price is $99 for a 3-bottle wine pack; this price includes taxes and shipping. This business receives 23% commission on this package price. 

Financials

Revenue trend:

• From 2018 through 2021, revenue has trended upward.

• In 2019, we added a toronto wine club as a line of business and as a result, saw a total combined increase in gross sales of 74% over 2018.

• In 2020, we saw a 60% increase in gross sales over 2019, as a result of elevated online sales during the Covid-19 pandemic. 

• In 2022, sales slowed in part due to brick-and-mortar businesses reopening after the pandemic, economic factors like inflation causing increased manufacturing and shipping costs, and the closure of the toronto wine club line of business.

This business’s gross profit margin remains consistent at 99%. Net profit margin on average has trended around 4%.

Sales (CAD) (Gross wine & spirits sales)

2018 - $476,025

2019 - $826,235

2020 - $1,320,335

2021 – $1,500,796

2022 - $1,132,778

Gross Commissions (CAD)

2018 - $120,863

2019 - $225,811

2020 - $321,481

2021 - $401,502

2022 - $306,288

Operations

1. The main website – this ecommerce website is built on Magento2 by Adobe and hosted by their Commerce Cloud. Customers place their orders by selecting products, adding them to cart, selecting their shipping method, and then checking out with a credit card. The orders go directly to the respective producers who pack and ship the items from their facility to the customer. The website is integrated with two shipping APIs (Canada Post and FedEx) and one payment gateway (Stripe). 

All e-commerce processes are done by the software. The only tasks that are done by people are product updates such as adding or editing products, most of which are done by each respective producer, and customer support management which entails replying to email queries from customers. 

2. the Canadian wine club website – this is a WordPress website with WooCommerce integration to enable payment processing via Stripe. The site is hosted by WPEngine. Customers select which wine club subscription they desire, add it to cart, and then check out with their credit card. If they have selected a gift or a pre-paid term (ie. 3 months), they pay up front with their credit card. If they have selected a recurring monthly subscription, they will be charged on the 15th of each month. Wine club packages are sent out to the club members on the 16th of each month and are packed and shipped directly to them from each featured winery. 

All ecommerce processes are done by the software. The tasks performed by people consist of: changing out the featured winery and products each month, exporting the customer order list and sending it to the featured winery for fulfillment and shipping, and customer support management which entails replying to email queries from wine club customers.

3. the Media Partner wine club website – this is a WordPress website with WooCommerce integration to enable payment processing via Stripe. The site is hosted by WP Engine. Customers select which wine club subscription they desire, add it to cart, and then check out with their credit card. If they have selected a gift or a pre-paid term (ie. 3 months), they pay up front with their credit card. If they have selected a recurring monthly subscription, they will be charged on the 20th of each month. Wine club packages are sent out to the club members on the 21st of each month and are packed and shipped directly to them from each featured winery. 

All ecommerce processes are done by the software. The only tasks that are done by people are changing out the featured winery and products each month, exporting the customer order list and sending it to the featured winery for fulfillment and shipping, and customer support management which entails replying to email queries from wine club customers.

Team

There are 3 full-time employees and 2 part-time employees, who are considered interns. The team roles and structure are as follows:

• The founder and President performs all sales and business development activities. She also oversees the operations of the three lines of business, and manages all aspects of the Media Partner's Wine Club. 

• The Finance and Operations Manager manages the monthly wine club, the Canadian wine club website, oversees all marketing activities for the main website and the Canadian wine club website, and manages all accounting and finance activities across all three lines of business. 

• The Marketing Manager creates and implements marketing and design assets across all three lines of business, including social media broadcasts, and supervises the two part-time employees who assist with all marketing, design, and social media efforts. She also manages the the main website front-end updates and customer queries.

• The Marketing Coordinator creates and posts social media content for the main website including imagery. She also contributes content in the form of blog posts and customer newsletters. 

• The Marketing Coordinator creates and posts social media content for the Canadian wine club website including imagery. She also contributes content in the form of blog posts and customer newsletters. 

Marketing

the main website

• ~80% of users come through organic search, followed by direct and email channels.

• Currently not running any paid advertising for the main website.

• This business is featured on three third-party marketplace/loyalty sites:  Rakuten, Reachdesk, and Ten Group, through which we receive orders and pay a small referral fee.

• Our main marketing efforts are via weekly newsletters to our customers. We currently send out 2-3 newsletters per week to our general mailing list. We use Mailchimp to manage this. The monthly cost for the account is ~$400/month, which is shared with the Wine Club below.

• Social Media:  We post 2-3 times per week on Facebook, Twitter, Instagram. Our in-house team and interns manage this strategy. We pay for a social media management service, SocialPilot, which is ~$30/month.

the Canadian wine club website

• ~53% of users come through organic search, followed by direct and paid search channels.

• Currently running Google AdWords (paid search) with a monthly budget of $1,000. Actual avg. spend per month in 2023 is ~$460 and most recent CPA is $38.49 CAD.

• the Canadian wine club website is featured on third-party marketplaces and loyalty groups, through which we receive orders and pay a small referral fee.

• We send out 1 newsletter per month to our general mailing list promoting the club to our existing customer base.

• We send out 1 newsletter per month with a retention offer to subscribers whose memberships are ending.

• Social Media:  We post 2-3 times per week on Facebook, Twitter, Instagram. Our in-house team and interns manage this strategy. We also use SocialPilot for this, so the cost of the account is shared between This business and the club.

The Media Partner wine club website

• The large media company provides all advertising for the club. Advertising consists of radio spots, radio segments and live interviews, social media broadcasts, audience newsletters, and dedicated web page(s) on their digital properties.

Partners

Third party partners who are heavily involved in the business are as follows:

• an online shopping marketplace where customers get cash back for purchasing This business wine products via the Rakuten platform. 

• a gifting platform that supports Indigo.ca and Chapters.ca. Customers purchase This business wine club memberships on this platform.

•  a corporate gifting platform where companies purchase This business wine gift packs for other clients or employees. 

• a concierge group that works with financial and other corporate institutions to create offers that can be redeemed by their members using loyalty points. Wine club subscriptions are offered to members as a loyalty incentive.

• an employee loyalty program through which we offer their members wine club subscriptions. 

Main Expenses

This business’s main expenses are employee wages, marketing/advertising costs, and website hosting. See financials for more details. 

Given the business drop-ship of all of its products, it is much more simple and cost-effective than the average ecommerce or marketplace business.

Work and Skills Required

The owner works a full-time role at the following tasks:

1. Business development: strategizing areas for expansion, development, and growth of the company and creating partnerships that enable these goals. 

2. B2B Sales: recruiting top wineries and distilleries for partnership on the This business platform and closing contracts with new beverage alcohol partners. 

3. Operational oversight.

4. Marketing and advertising optimization.

Who is the ideal buyer for this business?

The current owner has a background in marketing and advertising and is a certified wine specialist with extensive knowledge of the global wine and spirits landscape and a deep network of industry contacts across Canada, the US, and Italy. 

The perfect buyer would be an entity that wishes to enter and conquer the Canadian wine and spirits market and take the company to the next level by expanding the This business model to the United States and other countries. Potentially, they are an existing ecommerce/ B2C shopping platform who wishes to add beverage alcohol to their offerings for consumers and/or who wishes to incorporate a monthly subscription service to their ecommerce offerings. This business is also a licensed exporter so a buyer who has international partners with whom they can leverage this accreditation, and grow this line of business, would also be ideal. 

What (if any) post sale support is included with the sale?

The founder would stay on board with the company for one year after the sale in a full-time capacity to support the new buyer and their business objectives, and to ensure a smooth transition. Finance and Operations manager and the Marketing Manager, would both stay on board for 1-2 years depending on what the buyer preferred.

Valuation

In discussion with FIH, a minimum sale price of $2.05M CAD was determined based on projections about the success of their media company partnership combined with their already established business. 

SEO Analysis (Ahrefs or SEMRush)

The Main Website

Authority Score: 35

Backlinks: 3.4k

Referring Domains: 402

Total Keywords: 6.7k

The Canadian wine club website

Authority Score: 23

Backlinks: 2.4k

Referring Domains: 156

Total Keywords: 1.1k
the Media Partner wine club website
As this line of business has just launched, there is not enough information to pull metrics.

Social Media 

Main Website  – followers:

• Facebook:  2,600

• Twitter:  1.978

• Instagram:  1,438

• LinkedIn:  144

• YouTube:  12

• Pinterest:  180

Canadian Wine Club  – followers: 

• Facebook:  294

• Twitter:  148

• Instagram:  752

Media Partner Wine Club 

• To be launched

Customer information received via social media:  Usernames, names, and location where public. 

Customer information received via orders purchased:  Name, email, address, phone number, limited credit card data, location, product(s) ordered, IP address.

Expansion Opportunities for New Owner

You can expand this business by:

1. B2C efforts – Adding a deep category of wine and spirits accessories to the platform (ie. Wine glasses, corkscrews, martini shakers, etc.)

2. B2B efforts – recruiting new wineries and distilleries for listing on the main website marketplace.

3. Wine Club expansion – white label/customize different clubs for media and corporations to leverage their existing customer bases. Replicate the wine club website with their branding. Roll this out to hundreds of businesses in North America and the rest of the world. 

4. Platform expansion – replicating the main website ecommerce site in countries outside of Canada, particularly the United States, and licensing the platform for other commercial product uses. 

5. Exporting Canadian wine and spirits to the USA, Hong Kong, and other countries. 

6. Applying heavy marketing efforts to grow widespread awareness for the company and brand.

Barriers to Entry

The main website platform technology has been heavily customized so as to be compliant with Canadian wine and liquor laws. We are the only trusted online retailer for wine and spirits in the country because we opted to achieve legal compliance from the beginning, and architected our technology to support this. A new entrant to the market would not easily be able to replicate the technology as robustly, or have the benefit of 10 years’ worth of experience ensuring compliance. 

As well, it has taken a decade to establish deep trust with over 100+ top vendors and trusted partners. These vendors and partners are not quick to sign on to anything, choosing instead to rely on trusted relationships built over time, so even if a new platform that was identical to ours were to enter the market, the vendors and partners, and their contracts, would stay with us.   

Reason for Sale

The owner is selling the company because she is adopting a child with special needs in 2024 and wishes to be able to focus more on that child and her family.

Miscellaneous Details

This business and all of its lines of business are ecommerce technology platforms, therefore there is no brick-and-mortar or physical presence.

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All Assets Included with Sale 

1. Domains 

All company domains would be included in the sale. All domains are located at Godaddy.com.

2. Website and all content

the main website:  2,648 active pages, the Canadian wine club website:  90 active pages, the Media Partner wine club website:  19 active pages

3. Proprietary Software

the main website

• Current Framework:  Magento 2 (Adobe Commerce Cloud)

  • Development time (this only includes recent development for the migration from Magento 1 to Magento 2 framework):  ~1,600 hours

  • Overall cost to develop:  $64,362 CAD

• New development/site maintenance work:  $45/hour USD

the Canadian wine club website

• Current Framework:  WordPress and WooCommerce

  • Development time:  40 hours

  • Overall cost to develop:  $3,705 CAD

• Monthly site maintenance:  $40 CAD

The Media Partner wine club website

• Current Framework:  WordPress and WooCommerce

  • Development time:  25 hours

  • Overall cost to develop:  $1,800 CAD

• Monthly site maintenance:  $40 CAD

4. All customer bases (how many emails?)

Two mailing lists:

1. General mailing list:  

1. This business Customers:  5,729

2. WC Customers:  6,021

Total = 11,750

2. Wine Club – current subscriber list:  579

5. Hosting Accounts

the main website:  via Adobe Commerce Cloud, Pro plan.

the Canadian wine club website and the Media Partner wine club website:  WP Engine.

6. Work contracts

All employees have work contracts that would allow new ownership to continue to retain them. All employees have committed to stay with the company for 1-2+ years as the business changes hands to new ownership. 

7. Inventory

This business does not carry or hold any inventory, it is purely an ecommerce technology company. 

8. Future Sales

Gift cards are sold on the main website. This business holds the funds in trust until such time that the customer redeems the gift card. At this point, This business pays out the order to the vendor and invoices the vendor for their commission on the order.

• Approx. value of prepaid gift cards (funds held in trust):  $23,745 CAD.

This business sells wine club subscriptions via the third party gifting platform. This business holds the funds in trust until such time that the customer redeems their gift subscription. At this point, This business pays out the order to the vendor and invoices the vendor for their commission on the order.

• Approx. value of prepaid wine club subscriptions (funds held in trust):  $5,294 CAD.

9. Customer Contracts 

The main website – Customers sign up with a free account and all of these accounts will stay in place.

The Canadian wine club website – Recurring monthly wine club subscriptions will continue to be charged mid-month and fulfilled by the wineries. 

The Media Partner wine club website – Recurring monthly wine club subscriptions will continue to be charged mid-month and fulfilled by the wineries. 

10. Partner contracts

All vendor (wineries and distilleries) and partner contracts will transfer over to new ownership. Lead contacts can easily be transferred to new owner contacts and there will be no disruption in vendors/partnerships and/or their products and offerings.

11. Misc Accounts

The business uses the following accounts:

GoDaddy, Google Workspace, Dropbox, Mailchimp, Mandrill, Privy, Quickbooks, SocialPilot, Photoshop, Google Analytics, Google AdWords, WooCommerce (various extensions), Magento 2 (various extensions).

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About the Agent 

FIH.com is a Manhattan-based M&A advisory firm specializing in the sale of SaaS, eCommerce, & Digital Media companies from $1M-$100M. If you are in the market OR you are looking to exit a business that fits these specifications, then we encourage you to reach out to us for a free consultation.