Website Closers® presents an SBA Pre-Qualified eCommerce company in the Collectibles niche. This 15-year-old DTC business has amassed an impressive catalog of 17,000+ SKUs and is now recognized as the largest online store devoted to Collectable Robot Toys, action figures and related items, which has given them a fiercely devoted customer base among collectors with a passion for these products, and plenty of disposable income to stock up on their favorites.
With an Average Order Value of $205, so many of their customers return to their website searching for new collector items that their Repeat Customer Rate shot up to 47%, while their Customer Lifetime Value has skyrocketed to $1,413. The company’s massive catalog keeps sales humming year-round, and its gross margins have increased in the past year from 38% to 43%, while the company has $2.0 million in preorders for additional items that have already been booked. More than 3,000+ customers are now spending $900+ a year on their website.
The business has found creative ways to continue attracting new Collectable Robot Toys fans and collectors, particularly on social media, where their posts have given them 100,000+ followers on Facebook and 67,000+ Instagram followers. This content marketing strategy is complemented by email marketing to 77,000+ subscribers, paid media on Google, and a keyword-rich SEO program on the website, which includes a blog that gets updated weekly. The company’s focus has been on the nostalgic buzz that customers get from these products and on delivering great memories to their buyers.
The business has also made it easy for customers to find them by diversifying sales channels beyond their website to include shops on Amazon, eBay and Target, where they have become the exclusive Collectable Robot Toys and Action Figures Seller on Target’s website. The business also signed a recent agreement with Macy’s for a similar exclusive Collectable Robot Toys and Action Figures Seller seller arrangement.
New items are constantly being added to the company’s catalog, which is why so many customers continue returning to see what’s new. Its products are sourced from an extensive group of top-rated vendors that the business has built relationships with over the past two decades, including both primary and secondary suppliers. This gives them the ability to restock old items that are still in high demand while quickly adding new products as they become available, giving their customers a high-quality supply of the items they’re eagerly looking for.
This is a massive industry. The global Collectibles market is worth $294 billion and is projected to reach $422 billion by 2030. The Collectable Robot line of toys from Hasbro that debuted in 1984 has become one of the most popular and lucrative toy franchises in the history of toys and action figures and has become some of the most collectible toys in existence, with some of these collectible products selling for as much as $12,000 or more. This customer-focused eCommerce business has become one of the top sources for these collectors.
This business is a great opportunity for a strategic buyer to acquire it and scale it rapidly. There are multiple good opportunities available to this business. Continuing to launch new SKUs, including vintage toy collections and the boutique toys now sold throughout China but hard to find in the U.S., is a strong option. The business has also started negotiations with licensors about developing their own line of products, sold under their brand name. Their current manufacturers have been receptive to this collaboration.
Business Broker Takeaway
Our analysis of this business shows that the value propositions present are strong for a first-time buyer looking to get into the online space. We are excited about this business for 3 important reasons:
1. Devoted Customers. The company’s typical customer is a man between the ages of 30 and 50, and they share two characteristics. First, plenty of these buyers are considered hardcore collectors, and they have high disposable income to spend. Hardcore collectors now account for 37% of the company’s sales and spend around $925 a year at this store. The company continues attracting these customers at a sky-high 95% repeat order rate, and their average Lifetime Value has been $7,000+ over the past 7.5 years. The company’s frequent customers are 47% of sales and spend around $309 per year on their products. Their buyers have become a mix of dedicated, high-value collectors and regular but engaged shoppers. Both contribute solidly to the company’s rising sales.
2. Company Culture. The current owner has worked hard to develop a set of values that keeps both employees and vendors feeling appreciated and devoted to the site. The company employs two dedicated workers, a director of marketing and a freight coordinator who coordinates inventory and shipping with the company’s 3PL. Both employees work remotely, and the company’s vendors have been with the business for 7+ years and are providing a high level of expertise when it comes to managing day-to-day operations and ensuring products are well stocked and get shipped fast to customers. A highly automated business, the seller works as little as 5 hours per week, focusing mainly on strategizing and providing guidance during sales meetings. Overall, the owner is largely absent from daily tasks, giving the new owner opportunities to focus on scaling the business.
3. Creative Marketing. The company’s social media marketing has been the perfect way to connect with their audience through daily posts, product updates, and news related to Collectable Robot Toys and Action Figures. This has worked exceptionally well to build brand loyalty and drive organic traffic to their website, and the company is getting 100,000+ unique monthly visitors to the site. The company also sponsors and collaborates with forums devoted to collectable robot toys, and sponsors Collectable Toy Shows and events which has given them plenty of welcome publicity on platforms devoted to collectable robot toys news. The company also has a successful influencer campaign that involves collaborations with high-profile reviewers and bloggers who are read by their fan base.
Conclusion
The seller has been involved in the Collectable Toy Robot eCommerce industry for 20 years, having launched this company 15 years ago to specialize in bringing joy to collectors of these treasured items. To keep those customers happy and coming back, the company continues to offer benefits that include a proprietary reorder system, VIP customer programs, and a Get it Fast (GIF) shipping option. These benefits have helped fuel enthusiasm for the business and everything it markets.
A buyer will inherit the company’s huge catalog, strong profit growth, and devoted customer base, and have the added advantage that this business has been pre-qualified for financing from the Small Business Administration. That enables the buyer to finance the sale with just 10% of the asking price up front, and the loan can be financed over 10 years at very attractive interest rates.
The seller is available to stay with the new buyer to ensure the transition is successful and that the company continues to grow.
