Business Start Date: 3/1/2014

Business Valuation: $1,550,000 USD

Percentage Being Sold: 100%

Sales (2023): $1,007,483 

Net Profit (2023): ($133,107)

Business Multiple: N/A

Order Quantity (2023): 15,166 

Traffic (TTM): 333,000

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Summary

This business is an impact-focused artisan e-commerce marketplace that is about to celebrate 10 years. Last year the business achieved over $1M in revenues and overall, they have achieved over $3.5M in lifetime sales.

The Opportunity 

This business is a pioneering online marketplace with a heartfelt mission to empower artisans in emerging markets by integrating their unique, handcrafted products into the global marketplace. Launched in 2014, it was conceived with the vision of creating a platform that not only showcases the exquisite craftsmanship of local artisans but also supports their sustainable growth and economic independence. Over the years, the company has evolved from a promising startup into a thriving ecosystem, achieving a milestone of over $1 million in annual sales in 2023, and amassing cumulative revenues nearing $3.5 million. Our platform has connected over 35,000 customers with the rich cultural heritage and exceptional artistry of over 100 artisan businesses, impacting over 500 lives directly.

The success story of this business is not just told through its impressive sales figures and expanding user base, but also through its strategic partnerships with platforms like Novica, and the backing of Dutch foundations and private venture capital. These collaborations have significantly enhanced our product offerings and market reach, positioning the company at the forefront of the ethical and sustainable fashion movement.

Looking ahead, the company is poised for unprecedented growth. With the global shift towards sustainable and ethically sourced products, coupled with our expanding partnerships and product range, we foresee a trajectory that far exceeds our current achievements. Our future is envisioned to build on the solid foundation of ethical consumerism, broadening our impact on artisan communities and scaling our operations to meet the surging demand for authentic, handcrafted products.

In terms of investment opportunity, the company is offering an enticing structure to potential buyers or investors. The valuation is derived from our strong revenue growth, a robust and scalable platform, and our significant social impact, with a valuation multiple that reflects both our financial health and our potential for exponential growth in the burgeoning market of sustainable and ethical fashion. This investment represents not just a financial opportunity, but a chance to be part of a movement that values people and the planet alongside profit.

General Highlights

The company stands as a beacon in the niche market of ethical and sustainable fashion, targeting a discerning demographic of women, primarily aged 55 and over, who have a passion for travel, fashion, and making socially responsible purchases. Established in the Netherlands in 2014 and later registered in the US in 2020, it has grown a robust user base, evidenced by over 55,000 orders from more than 35,000 unique customers, showcasing the brand's appeal and the trust it has built over the years.

Our business model thrives on a marketplace platform, capturing an average commission of 50% on sales, which propelled us to achieve $1m in revenue last year. This revenue model, coupled with our commitment to ethical sourcing and support for artisans, underpins our financial health and growth trajectory.

Key financial and traffic metrics further illustrate our upward momentum: our Average Order Value (AOV) has consistently risen, from $60 in 2021 to $70 in Q4 2023, while our Customer Acquisition Cost (CAC) has been optimized to $22 in the same period. We've also seen a steady increase in monthly new customers, jumping from 754 in 2022 to

879 in 2023, with a Lifetime Value (LTV) of $166. Our Store Conversion Rate and Returning Customers Rate have also seen significant improvements, indicating a strong and growing engagement with our platform.

The increasing average commission, peaking at a forecasted 60% for 2024, underscores the financial viability and attractiveness of its business model. With a team of 3 full-time employees who are committed to the company's vision and willing to continue post-acquisition, the business offers a turn-key opportunity for potential buyers. This structure ensures a seamless transition and continuity in operations, reducing the need for immediate hands-on management from the new owner and preserving the established relationships and operational efficiencies that have been key to our success.

In essence, the company presents a lucrative, ready-to-operate business that combines solid financial performance with a meaningful mission. The potential buyer has the unique opportunity to lead a company at the forefront of the ethical fashion movement, poised for further growth and impact.

Niche

Target Customer Summary:

The primary target customer is female, making up 92% of the demographic. A significant 75% of these women are aged 55 and over. While their income varies, 30% earn around the $80k mark, but the entire group's income spans a range of $35k to $110k. These women show a keen interest in travel, fashion, and investments, and they are geographically distributed evenly throughout the US.

Strategic Plan:

Platform Choice: Prioritize advertising on platforms popular among mature females such as Facebook, Pinterest, and focus on retention through emails

and SMS.

Content Focus: Curate content around travel destinations ideal for seniors, fashion trends for mature women, and investment tips tailored for postretirement

financial health and affordable spending solutions.

Promotions: Offer tiered promotions catering to diverse income brackets. Consider collaborations with mature fashion brands, and health and makeup

brands that focus on an older demographic.

Value Propositions: Highlight products or services offering great value for money, ensuring those with lower incomes still find relevance in offerings.

Budget Travel & Fashion Tips: Provide content on affordable travel destinations or fashion hacks for the budget-conscious, ensuring inclusivity

for the wider income range.

Investment for All: Feature financial advice for varied income levels, especially focusing on maximizing returns even with modest investments.

Regional Personalization: Develop location-specific promotions to cater to the audience's even distribution across the US.

Feedback Loop: Maintain a system for collecting feedback to refine and tailor strategies continuously.

Customer Base

• Main Customer Base: The primary customer base consists predominantly of females, with a significant 75% aged 55 and over, showing keen interests in travel and fashion.

• Key KPIs on Users: Since its inception, the business has garnered over 55,000 orders from over 35,000 customers, indicating a robust and growing user base.

• Customer Acquisition: Customers are primarily acquired through targeted marketing strategies, capitalizing on the interests in travel, fashion, and sustainable products.

• Customer Acquisition Cost (CAC): The CAC has seen fluctuations, with $27 in 2023 and a decrease to $22 in Q4 2023, showing improved efficiency in marketing strategies.

• Average Revenue Per User (ARPU): With a marketplace model and an average commission of 44% in 2023, the ARPU is significantly influenced by these metrics, alongside a rising Average Order Value which stood at $70 in Q4 2023.

• Monetization & Customer Value: As a marketplace, the business operates on sales commissions rather than subscriptions. The customer lifetime value in 2023 was noted as $166.

• Customer Activity & Churn: With an increasing returning customer rate, reaching 30% in 2023, and a store conversion rate peaking at 2.1% in Q4 2023, the customer base shows high engagement and activity. Exact churn rates are not provided, but the data suggests an improving retention landscape.

Traffic

1. For each of the past two years we have achieved around 850k online store sessions
2. Our online store conversion rate has increased by 31% from 2022 to 2023 and for Q4 2023 it was 2.1%
3. Since May, the site has gotten over 333,000+ visitors! 

Revenue Sources

1. All sales come through our Shopify store. We average 50% commission per sale and we are looking to achieve 60% in 2024
2. We have an agreement with our artisans for their set price per product and we can increase or decrease the total cost which affects our % take
3. Average order value is $70 is Q4 2023
4. Our typical customers are 60+ women based in the US who are looking for handmade, unique products at an affordable price 

Financials

Sales (USD)

2018 - 240,484

2019 - 179,651

2020 - 332,322

2021 - 455,129

2022 - 799,258

2023 - 1,007,000 

Profit/SDE (USD)

2020 - (151,915)

2021 - (143,051)

2022 - (136,740)

2023 - (133,107)

Operations

1. We run everything through our Shopify store that is based in the US through our US entity
2. We have an operational director, marketing director and CEO who manage their respective areas
3. Our webshop
4. No, we have a Delaware C corp business that has a registered virtual office in Delaware

Team

The owner is currently running the business as a CEO. 

They currently have three full time staff who will plan to stay with the new buyer. 

Sales/Marketing

1. The business is focused on Facebook for our marketing, with also a big focus on email marketing with over 40k subscribers. 

2. Most money is spent on Facebook adverts, we have been working on diverging from spending too much on Facebook and have been working on Shopify app and other B2B channels.

3. Key marketing strategies include targeted social media campaigns, leveraging the strong presence on platforms where the primary customer base is highly active, such as Facebook and Instagram. Collaborations with influential platforms like Novica and Shein, along with backing from Dutch foundations and private VC, bolster the brand's image and expand its reach.

4. Other marketing highlights to emphasize would be the high percentage of returning customers and growing order values, which demonstrate customer satisfaction and loyalty. Additionally, the increasing commission rates reflect the brand’s premium positioning and financial health, appealing to a consumer base that values quality over quantity.

Partners

We have partnered with a media buying agency that has been performing very well. They are mainly focused on Facebook ads and creating new content for us.

Main Expenses

In the last month, the business has reduced costs by over 30% and we will continue to maintain this streamlined cost structure until they are profitable later in the year.

Valuation

The business is being valued at 1.5x its TTM sales. 

SEO/ASO Analysis:

Authority Score: 40 

Backlinks: 4,600+ (54% do-follow)

Referring Domains : 890 (82% do-follow)

Social Media 

Email list: 40,000

Instagram: 3,500+

Facebook: 17,000+

Pinterest: 6,600+

Barriers to Entry

Major barriers to entry in the business’ niche include:

Established Artisan Relationships: Building a network of over 100 artisan businesses with exclusive partnerships is a time-intensive process that can’t be easily replicated.

Brand Recognition: The company has developed a loyal customer base and brand recognition that new entrants would have to spend significant resources to achieve.

Marketplace Trust: Earning customer trust, as evidenced by a high returning customer rate, takes time and consistent delivery of quality and service.

Strategic Partnerships: Existing partnerships with platforms like Novica and Shein provide a competitive edge that new businesses would lack.

These factors combined with the competitive nature of the niche protect the business from competitors and present significant challenges to new entrants.

All Assets Included with Sale 

Here are the assets included with the sale:

1. Domains and all IP brand assets

2. Website and all website contents

3. All partner contracts

4. Customer database

5. Social Media + Marketing Accounts

6. Amazon & Google Monetization Accounts

7. Employee Contracts

8. All other business assets that are relevant

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About the Agent 

FIH.com is a Manhattan-based M&A advisory firm specializing in the sale of remotely-run successful digital companies (around the world) from $1M-100M in revenue, including apps, marketplaces, freemium + enterprise SaaS, ecommerce, affiliate/advertising groups, and more! We are proud to work with the very best entrepreneurs and investors, so if that’s you and you are in the market to acquire or sell a relevant business, then we encourage you to reach out for a complimentary consultation.