This is a phenomenal opportunity.
Featured is a patented product in the highly desirable and incredibly lucrative gaming niche that helps players of first-person-shooters better target their enemies.
Based on an old gamer hack, this led technology takes things to the next level. It’s been sold at Best Buy stores and Game Stops across the US, but is currently achieving success via Amazon and their own website – though the opportunity is still there to expand.
Watch the video below to learn a bit more about the business.
Bonus Video Content… Take a look at the HipShotDot in action!
What’s your background? How did you start with this project?
I’m an industrial designer by trade and I was working for the Whirlpool corporation at the time of development, but prior to that I had been in the Navy. In the evenings I was playing games like Call of Duty with my military friends.
Using an old gamer trick, I’d put a piece of tape with a black dot on my screen to help with my targeting. It was simple, but it worked. The issue is it’s literally just a black dot so when you’re in a dark scene, it’s quite hard to see.
So, I developed an upgraded, modern way to do this with a glowing LED. It draws power from your gaming system and looks just like a red dot sight on a gun.
How did it grow from your garage to a legitimate business?
I used the same patent attorneys as Whirpool and wound up with a utility patent and decided to go full time.
We quickly brought the product to major electronics chains like Best Buy and Gamestop, eventually hitting over 7,000 retail locations. Everyone loved the thing!
The issue that we had is that none of us had a marketing background. We were able to sell it into stores, but had a hard time with sell thru. The packaging wasn’t ideal for the shelf as it didn’t really tell people walking down the aisle what it was. So, after realizing this wasn’t going to be a $50m brick and mortar product, I scaled back and turned it into an eCommerce brand selling through Amazon and our own website.
Why did your revenue increase so greatly over the past year?
This had to do with a few things.
First of all, 2019 was a year of hard lessons. We were outsouricng all of our social media advertising which resulted in a rather average return on our investment, especially after factoring in the agency costs. Secondly, we were focused on the wrong channels for ads. And finally, our pricing wasn’t optimized. We experimented with lower prices to drive sales, but soon realized that it wasn’t a good plan.
In 2020 we set off to win. We actually raised the price of the product which not only gave us exceptionally better margins, but actually increased our sales as it improved the perception of the product to potential customers. High price = integrity.
Second, we brought all of our social media advertising in house and got a lot better at it.
Third, we did an extensive study on our highly valued customers and did a complete redesign of our webpage to better convert those who are looking for a product like ours.
Finally, and perhaps most importantly, we discovered that we could ship internationally using DHL at exceptional rates. This instantly boosted our company to the next level.
What do operations looks like?
We work with a manufacturing partner based out of California and Taiwan with factories in China. They are a great partner and have been manufacturing for us since 2013. We purchase them in master cartons of 48 retail ready pieces and it takes around 8 weeks for production.
Around 80% of our sales are running through Amazon FBA. The rest is managed from our home office / garage where we manage advertising and websales.
To date, we’ve sold over 100,000 HipShotDots at a 34% operating margin.
What are some opportunities for a new owner?
To be honest, the heavy lifting is complete. The product is fantastic, we have over 100,000 Facebook fans, we have demo videos that receive massive numbers of impressions.
What a new owner can do is be better than we ever were at advertising. Whether that means optimizing better Facebook ad programs, working better with the Amazon PPC programs, or even expanding into TikTok (this is very demonstrable and great for video!) or perhaps advertising on YouTube. There is still a lot of space to win.