About the business
Tell us a little about yourself. What’s your background? How did you start the business?
I had just sold a National recruitment business and was looking for new opportunities. I noticed every house and business has printers and, like cars, they constantly need “fuel” in this case Ink and Toners. The main printer manufacturers HP, Canon, Brother etc made their money selling Their genuine cartridges and there was a growing aftermarket ( compatible ) market emerging particularly as China manufacturing processes improved year on year allowing consumers greater confidence in these cheap alternatives.
So I partnered with a friend to start the 1st store. We started as a single Bricks in Mortar shopping centre based store some 13 years back. Over the next 8 or so years we grew to a network of some 50+ stores company-owned, franchised and distributors… a majority in major shopping centres across each state in Australia.
The rapid growth of eCommerce saw us pivot some 5 years ago towards a goal of being online only and winding down quite a larger retail store network. We have been exclusively online. Well, since a little before the start of the pandemic.
As an eCommerce business, where are your products made?
A majority of what we sell are aftermarket cartridges with a smaller percentage of genuine cartridges. Aftermarkets cartridges are primarily manufactured in China but there are very good highly cost-effective genuine and aftermarket wholesalers with warehousing in all major states. That has allowed us to move away from importing, warehousing and fulfilment ourselves and to a more efficient direct drop-ship model.
That said this model suited us… the direct importing model may very well suit some potential buyers.
What can you tell us about your Customer Lifetime Value (CLV) and Customer Acquisition Cost (CAC)
Frankly, Cartridges are not a glamorous product. I buy them for my business or home printer because I need them to keep running and to make sure I have backups when I am printing in case one runs out. When I go to buy cartridges I don’t browse the online store … my printer takes 1 type of cartridge so my options are the genuine or aftermarket option for that product. Many of our customers have transitioned with us from bricks and mortar stores to online…. and for many that have only been recent. We also have 2 eCommerce sites One has focused on transitioning our old retail store customers to online plus learning the ropes of the affiliate marketing channels. Our target customers here are ones who specifically seek out our high support reputation. Businesses that want the option of calling through an order or home users that will only use us because of our quality and high support reputation The other site a relatively new and is focused on those customers that are comfortable with the product and just want the best deal they can get online. CLV varies significantly between Business (that might run in the 10s of thousands) and home users (in the 100s) and also varies between the 2 sites. I would welcome exploring directly with any interested party against these parameters and growth opportunities CAC too is more meaningfully looked at at a customer cohort, site-specific and against growth opportunity and the likely impact.
How have you marketed the product and where are your customers originating from?
Is the asset on your listing owner-operated, how much time does it take to run the business, who else is needed on the team, and what is automated?
We have progressively moved the business away from importing stock ourselves and utilising local state-based wholesalers to speed fulfilment, especially to our business customers. That model may not suit everyone as there are possibly greater benefits to some in moving back to an importing and fulfilment model. Currently marketing, support could be completely handled by a single person particularly if someone were to move to a full dropship model on all orders. Beyond the e-commerce platforms are monitored and managed with select orders directed to 3rd party warehouses for fulfilment.
What does someone need to do to continue operating the business in its current form?
It depends if they knew our product they could easily take over support immediately. If not I would suggest keeping on our existing marketing manager who additionally happily manages support too, whilst the new owner comes up to speed on the companies products, support processes and opportunities (which wouldn’t take long, 4-6 weeks at most).
Growing the business
Can you list a few opportunities for a potential new owner to continue growing the business?
There are significant growth ops across both sites. Our own expertise has been operating retail bricks and mortar stores and transitioning some of those customers to online before all our stores closed. We have focussed on EDMs to store customers and more recently have started expanding into the affiliate marketing channels. But we have started with effectively zero base knowledge on e-commerce marketing, even within the affiliate channels whilst we have aligned with several very robust programs including QANTAS RAIZ Cash rewards and Commission Factory, there are significant expansion opportunities within this channel and indeed only one of the sites is marketed within this channel. Our online marketing has been practically zero as we have focussed on delivering 2 sites that provide a worthy landing place for existing customers and new customers and sites with the best individual structures and offerings to allow them to grow exponentially online be that via social media, SEO, SEM, online and traditional advertising etc.
How does this business make money? What are the current revenue streams?
E-commerce product sales.
What marketing channels are most profitable for the business?
EDM and Affiliate marketing channels but have also been almost exclusively where we have focussed our growth and marketing.
How does the business currently acquire customers and what is your breakdown for marketing costs?
Largely covered but requires a longer conversation specific to each site and our target demographic.
What’s the reason for selling your business on Flippa?
The simple answer is that both Directors have moved their focus on to other things but the reality is that we both recognise there are people that eat e-commerce marketing for breakfast. We both don’t, coming from traditional retail and Franchising backgrounds. To move our sites from slow growth to fully loaded e-commerce growth rockets requires focus and expertise we don’t have. It’s time.