Filters
LocationSouth Africa, KwaZulu-Natal

Sector - Retail

Asking Price
R653,518
Monthly Profit
R 40,041
Asset Value
R 0
Stock Value
R 146,482
Yearly Net Profit
R 480,490

Summary

Well established eCommerce retailer of organisational products.

Give me more information

Fully describe the business's activities?

This business is a niche eCommerce store that specialises in organisational products. They sell and ship throughout South Africa.

How does the business operate on a daily basis?

Orders received via the online shop are printed daily. Those orders, where stock is on hand, are immediately packed and dispatched. Couriers collect daily. If 'remote' orders are placed by email, these are also dealt with.

What Advertising/Marketing is carried out?

Marketing strategy is comprehensive and done inhouse. Two newsletters go out per week. Daily Instagram and Facebook posts are done and monitored.
Google ad spend of R2500/month which is managed by an independent agency. Their ad spend has a good ROI considering how small the spend is. This is largely as a result of the SEO and online presence of the brand.

Facebook advertising is also done based on post analytics.
Blog posts are also written and published (which works towards their SEO).

Where appropriate, they also collaborate with other like-minded businesses and have done work as an ‘influencer’.

What competition exists?

Whilst there are a lot of ecommerce sites that are now entering the market, none of them are dedicated to organisational products. Some may have sections devoted to organisers, but not like this online retailer so from that point of view, they have very little competition.

How could the profitability of the business be improved?

Finding a balance between the cost of shipping and what customers are charged, would definitely increase profitability. In addition, the import of products will make the company more profitable as well as competitive. This is something that the current owner would have liked to have done, but cash flow was prohibitive.

Give a breakdown of staff/ functions/ length of service?

The owner does the marketing and administration of the business and all the work as pertaining to securing new products and uploading them onto the site.
The packaging of products and liaison with customers is done by the Admin Assistant. The Admin Assistant has worked, on and off for the company for 2,5 years.

Do any have management potential?

They will not be available on the sale of the business.

How involved is the Owner in running the business?

The owner is very involved in running the business but that needn’t be the case should a capable manager be hired to oversee the running of the business.

When does the current lease end?

As of 1 January 2021, the business was relocated to the owner’s personal property so the new owner can run the business from their own home, if necessary.

What are the trading hours?

Monday to Friday 8am to 4pm.

What are the main assets of the business?

An asset register is available.

Strengths?

Well-maintained mailing list.
Excellent social media footprint.
Established marketing processes.
Ecommerce site is fully operational, which is a major advantage since an ecommerce site can cost upwards of R80k to create.
Suppliers and products readily available to a new owner, including a line of products (mostly stainless steel) that are products exclusive to this online retailer.
Online retail is a booming industry in South Africa. The cost to set up a site, to establish relationships with suppliers and customers, can be an expensive and lengthy process. This business is well-established and has an excellent footprint in South Africa because of their social media presence and branding.

FB followers: 56k
Inst followers: 9,5k
Mailchimp mailing list: 15k

Purchasing this business would ensure a smooth transition into online retail. The business also has a direct feed from their site to the Bid or Buy platform, already established. They also also sell via Takealot.

Weaknesses?

Lack of cash flow is limiting growth via imports.

Opportunities?

An increase in product via import will increase profit margins. Investigating sales across our borders would be an advantage, especially neighbouring Africa countries. Wholesale sales to hospitality could be increased.
The business is also a registered service provider for the government however they have not pushed this side of the business.

Opportunities?

An increase in product via import will increase profit margins. Investigating sales across our borders would be an advantage, especially neighbouring Africa countries. Wholesale sales to hospitality could be increased.
The business is also a registered service provider for the government however they have not pushed this side of the business.

Threats?

A lack of cash flow can be a threat. Customers would prefer a quicker turnaround time in the dispatch of goods which may require more stock on hand.
Remaining vigilant of transport costs could also be seen as a threat.

What is the reason for the sale?

The current owner would like to focus on new opportunities.

Location

Contact | Enquire

Gary

Gary Gower

LocationSouth Africa, KwaZulu-Natal

Preferred method of contact

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