Sectors / Category

Annual turnover

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  • Mandate: 34964
  • Added: 08 Oct 2021
  • AFS
  • 150

Online retailer

KwaZulu-Natal, Durban
150
Mandate 34964
Added 08 Oct 2021
R 800,000* ZAR
Stock: R 146,482
Assets: R 0
R 40,041 ZAR
Gary Gower
Aldes Ambassadors
KwaZulu-Natal, Dolphin Coast
KwaZulu-Natal, Dolphin Coast
Summary

Established online retailer that specialises in organisational products

SELLING PRICE AFS
R 800,000* ZAR
Stock: R146,482
Assets: R0
R 40,041 ZAR
Summary

Established online retailer that specialises in organisational products

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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 long has the business been established?
Established in 2009. Started as an online retailer around 2012.

How long has the owner had the business?
Since inception.

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’.

Does the business have any contract work?
No, however the business does have some recurring customers from the hospitality industry but these are not under ‘contract’.

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.

What are the seasonal trends?
Seasonal trends have been difficult to pinpoint in this industry, save for the fact that January is always a very busy time. September (and the start of Spring) also seems to generate a surge in sales.

Is the business VAT Registered?
Yes.

What VAT documentation is on file?
All relevant documentation is on file.

Are there up-to-date Management Accounts available?
Yes.

What Balance Sheet and Income Statements are available?
Audited annual financial statements as at 28 February 2021 plus management accounts up to June 2021.

What percentage of the business is cash/credit?
All orders are paid for via EFT or Credit Card ahead of time. No orders go out until money is received so there are no sales on credit.

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.

Is Seller finance available and for what amount?
No.

What is the total staff complement?
Two staff members including the business owner.

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 receive special perks or incentives?
No.

Are they on contract?
Yes.

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 is the square meters of the business?
The previous premises were 240m(2) which was more than adequate.

What are the main assets of the business?
An asset register is available.

Are any items not included in the sale?
No.

What is their overall condition?
Good.

Do any require repairing?
No.

Are they presently insured?
Yes.

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.

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.

Why is this a good business?
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 is a well-established business with an excellent footprint in South Africa because of their social media presence and branding. Purchasing this business would ensure a smooth transition into online retail. They also have a direct feed from their site to the Bid or Buy platform already established. They also have a profile on Takealot. In addition, there are no other online retailers focusing on organisational products in South Africa. In the USA for example, the Container Store is very widely known. It is the current owner's belief that this business could become South Africa’s equivalent. There is value in picking up from where the current owner has brought it to, and taking this business to amazing new heights. A niche ecommerce site, with already established relationships with customers and suppliers is invaluable.

What is the price plus stock and the profit?
The price is R800000, including stock of currently R146 482. Annual profit was around R480 000 for the year ended 28 February 2021.

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AGENCY DETAILS

Aldes Ambassadors

2 members
6 mandates
KwaZulu-Natal , Dolphin Coast
29 Kyalami Park Cnr Douglas Crowe drive & Stewart Drive Ballito
Dolphin Coast
4051

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