Select Page

Highlights

Asking price: 1,800,000 EUR

Inventory not included

Gross revenue: 1,909,979.53 EUR (01/18 – 10/18)
Adjusted EBITDA: 444,291.43 EUR (01/18 – 10/18)
Margin: 23,26 %
Operating since: June 2016

General information

For sale is an extremely successful company, founded in June 2016, which is regarded as the leading specialist for microelectronics and listed under the top 300 Amazon sellers. Up to October 2018, the company generated a gross revenue of 1.9 million EUR, as well as an SDE of 445,248.14 EUR. By the end of the year, the gross revenue is expected to reach 2.5 million EUR and the SDE 550,000 EUR. The margin will therefore come to approximately 22%.

As a top 300 Amazon seller, the company is currently overseen by four Amazon account managers for B2B (pilot program for B2B badge with external invoicing program) PPC campaign optimization, Small and Light, and the US expansion. The company cultivates a trusting personal contact with all relevant parties and is regularly invited to trainings for new programs, beta features, etc.

422 parent ASINs are sold in total. The brand is registered with the DPMA and EUIPO as a design- and word mark, and is currently being registered in China, America and Australia.

Due to very lean structures, high stock turnover, cost savings in the entire value chain, as well as extremely cheap purchase prices, this German quality brand is able to offer consistent quality at the absolute cheapest prices.

The company is managed by three CEOs, who work exclusively on strategic projects to further develop the business model, the purchasing of goods and personnel matters. For this purpose, they put in the following work hours:

  • CEO 1: 35 h/week
  • CEO 2: 35 h/week
  • CEO 3: 17.5 h/week

The CEOs estimate the workload to keep the current operating business (without strategic development) up and running at approximately four hours per day, or 20 hours per week. Alternatively, a manager could be employed. A logistics manager will be hired starting on February 1st, 2019, who can naturally also be taken over if necessary.

The currently eight employees can be taken on, if desired. They perform the following tasks:

  • Employee 1: Purchase order commissioning – 30 h/week (probation period until the beginning of March 2019)
  • Employee 2: Purchase order commissioning – 30 h/week (probation period until the beginning of May 2019)
  • Employee 3: Amazon logistics / packaging – 30 h/week (probation period until the beginning of March 2019)
  • Employee 4: Amazon logistics / packaging – 39 h/week (outsourced at sheltered workshop, contract terminable, effective immediately on same-day)
  • Employee 5: Non-technical customer support – 25 h/week (probation period until the beginning of April 2019)
  • Employee 6: Technical customer support / product images – 32 h/week (probation period until the beginning of January 2019)
  • Employee 7: Brand building / blog articles – 32 h/week (employed since March 2018)
  • Employee 8: Cleaning lady on a 450 EUR basis
  • Starting January 1st, 2019: Account manager for Spanish marketplace
  • Starting February 1st, 2019: Logistics manager

In addition, a Serbian virtual assistant is employed for design, image editing, shop maintenance and Amazon Enhanced Brand Content (EBC) as needed for 3.50 EUR per hour. Marketplace specific account managers with suitable linguistic backgrounds are currently also being hired to expand the further development of the PAN-EU marketplaces.

The company has its own warehouse with 300 square meters, including offices. More room for further expansion plans has already been taken into account. The warehouse as well as the offices don’t have to be taken over by the buyer.

Sales

The company uses the PAN-EU program to sell and store its products at the Amazon marketplaces in Germany, UK, France, Italy and Spain.

Next to Amazon, the company also sells its products via the in-house Shopify store with various subdomains, as well as via email.

Approximately 60% of the current monthly gross revenue is generated on the German Amazon marketplace, approximately 10% via the in-house webshop, as well as 2% via email. The rest of the gross revenue is generated via the other PAN-EU marketplaces.

In addition, the market entry for the amazon.com marketplaces in the US, Canada and Mexico took place in September 2018. A very successful trial period with ten products, which are already generating gross revenue in the medium five-figure range in the USA alone, is currently running there. Because of the great, so far largely untapped market, the company assumes a very high probability of success for amazon.com.

The company dispatches the bulk of its orders via Amazon FBA and Amazon Small and Light. The majority of products is currently being switched to Small and Light, which will further improve the margins. As this new Amazon service is currently only available to invited companies, the company has the first-mover advantage and will be able to use it for approximately another six months, according to Amazon.

Educational institutions are especially interesting as clients, as they usually place orders in the three- to four-figure range. The company is also one of the very few in its segment, from which educational institutions are able to buy products on account, which they’re obliged to do due to government guidelines

Marketing

The company uses Amazon pay-per-click (PPC) campaigns to market its products. The Advertising Cost of Sale (ACOS) in 2018 currently lies at 9.6%. In November, the ACOS could be lowered to 6.89% by an Amazon account manager who generates the campaigns for the company for free.

Suppliers and logistics

A stable, reliable business relationship persists with the Chinese main supplier since 2017. This supplier exports the goods, and all payments and contracts with the manufacturers are handled by him. Consequently, payment targets can be realized and individual products can be prefabricated on a basis of trust.

A freelance office lady works from China as Chinese voice to the main supplier and manufacturers. She speaks perfect English, negotiates with the factories and requests quotations.

Depending on purchase volume, discount scaling is in place on the already cheap purchase prices. The minimum order quantity lies between 500 and 5,000 units. The lead time comes to up to four weeks and payment is made only upon delivery.

Deliveries are usually made within two months by sea with Flexport or five to ten days by air. Standard products without customization are always in stock PAN-EU-wide and in case of an emergency (customer orders from universities or major clients, for example) can be in Germany within 72 hours via DHL-Express.

The products are all delivered with data sheets and setup guides, as well as packaged in Germany.

Sales History (01.18 – 10.18)

Click on picture for PDF-Download

Included in the acquisition

  • A professional website with integrated webshop (Shopify), including customized and conversion-optimized theme and various subdomains
  • A DPMA- and EUIPO-registered design- and word mark
  • Solid business relationship to main supplier in China
  • Fast growing email list with currently approximately 20,000 subscribers and about 400 new subscribers per week
  • Facebook account with approximately 9,800 organic followers, as well as gained through Facebook ads
  • Amazon listings with good rankings and reviews
  • A completely replicable and standardized process to successfully launch and rank new products
  • A brand that is as self-explanatory in the “community” as “Kleenex tissues”, and which has already invested a lot in the last year through content creation

Reason for the sale

The three young CEOs don’t have the assets to make the investments necessary to take the company to the next level. A majority interest is undesired, so the sale is planned as a whole, with a subsequent start-up in a different sector.

If desired, the CEOs are ready and willing to advise the new owner(s) over three to a maximum of six months.

    Reason for the sale

    The three young CEOs don’t have the assets to make the investments necessary to take the company to the next level. A majority interest is undesired, so the sale is planned as a whole, with a subsequent start-up in a different sector.

    If desired, the CEOs are ready and willing to advise the new owner(s) over three to a maximum of six months.

      Shopify: Revenue from online store 2018

      Shopify: Rate of returning customers

      Shopify: Number of customer sessions in comparison with 2017

      Amazon: Sales and costs on Amazon since January 2018

      Amazon: Growth trend since January 2017

      Request

      DragonFlip is free of charge for buyers. Our performance-based sales commission is paid by the seller.