Featured Listing: Unique & Original Products

Pop Colors was established in July 2018 and is an inventory holding eCommerce that specializes in colored pencils themed after your favorite fandoms and trends in pop culture. 

HIGHLIGHTS

• Unique & Original Products – Hard to Duplicate
• Average Order Value: $28
• Return Customer Rate: 6%
• Store Purchase Conversion Rate: 3.71%
• Net Margins: 34%
• Customer Base of 56k+ customers
• Email List w. 62k Subscribers

Watch our interview with the seller.

Tell us a little about yourself. What’s your background? How did you start the business?

I’m an entrepreneur who loves building businesses up to a certain point and selling them. I have previously built and sold (on Flippa) a blog that received 300,000 visitors a month, and also started and sold another e-commerce business in the entertainment industry. The idea for Pop Colors came to me after posting a meme of a colored pencil with a funny name on social media. The post received thousands of shares, and I decided to take the idea and make it a reality. Since starting, we have grown every year.

If you are an e-Commerce business where are your products made?

We import from China but a manufacturer in the US finalizes the product for sale by stamping and boxing them.

How have you marketed the product and where are your customers originating from?

We do paid marketing on Facebook and Instagram, and run PPC on Amazon for our FBA products. We also have an email list on Klaviyo of over 62,000. 95% of our customers are based in the USA.

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?

I currently work about 10 hours a week on the business and I hired someone to do things like customer service, inventory management, etc.

What does someone need to do to continue operating the business in its current form?

It’s important to note, we are also working as our own manufacturer, but we are willing to be the manufacturer/supplier for the new owner for at least two years and sign a non-compete form. This means the new owner doesn’t have to worry about things like importing product, handling inventory and prepping it for shipping or sending into the 3pl. We are willing to do this for you as we have a warehouse facility we are using for other businesses. Because of this, the new owner will do tasks such as: Social media and social media advertising, email marketing, new product creation (if desired) and customer service. The business can be completely location independent in this scenario.

Can you list a few opportunities for a potential new owner to continue growing the business?

1. Optimize Facebook/Instagram ads. I only know enough ads to make them work decently, but someone can come in and optimize to increase ROAS. Things I would do are create more custom audiences, try video ads, try different conversion events, advertise to warm traffic, and find new interest groups that will convert. To be honest, I have been kind of in a rut just advertising to cold traffic because I don’t have time to sit down and work on optimization. I believe the new owner could use the same budget and squeeze many more sales out of it. 

2. Scale Facebook/Instagram ads. We have never really tested the ad spend to the max. Part of this is because of inventory which I will cover next. I think the audiences we advertise to are big enough to 2-3x the ad spend and still have room to go. 

3. Manage inventory better so you can sell more. Once you look at the Shopify and FBA accounts, it will be no secret… we always run out of inventory. I am pretty conservative and usually order way less than we can actually sell; especially during the Holiday season which is our BIG quarter. Usually, we have to cut down ad spend and stop sending emails in late November or early December. I believe there is at least 100k+ being left on the table every 4th quarter. 

4. Optimize Email + Send More Emails. We started with Klaviyo 1.5 years ago and I set up a few automated flows which you will see bring in great money passively. There are PLENTY of flows you can still set up, especially behavior flows like ‘if you bought this, then you may want that’ type of stuff. I think 20 more flows could easily be set up. 

The other thing is I’ve been pretty lazy about sending newsletters. It’s been over a month since I’ve sent an email out, and this is a big mistake. Part of the situation is being low in stock, but that will be remedied soon.

5. Try other ad platforms. I think our products would do great on other ad networks like YouTube, Pinterest & TikTok. Since we are Pop Culture-based, I would say TikTok for sure is worth a try. We haven’t tried these and I can see them all being platforms our customers are on. You can also do great with targeting on YouTube since they are very interest-based products. 

6. Do more custom & wholesale orders. I turn down custom and wholesale offers a lot. This could be a whole other monetization stream. 

We actually did really well on the wholesale marketplace FAIRE, but we shut it down after running low on stock and wanted to allocate inventory to our retail side. 

The FAIRE account we will throw in with the sale for free. All you have to do is flip the switch back on to start selling.

What has been the evolution of this asset since its launch?

We started out great about 3 years ago with very few SKUs and have grown it every year since. We spent the last year getting inventory on a 3pl so we no longer have to ship our own products which has been a big help! We also invested in more equipment to help us on the production side. We have not launched as many SKUs as we could have, but the growth has been keeping us busy. The numbers for just Shopify by the year: 2018 = $198,000, 2019 = $479,000, and 2020 = $518,000

How does this business make money? What are the current revenue streams?

We sell through Shopify, Amazon, Faire, & Etsy. Numbers listed were only for Shopify & Amazon. We are willing to through the Faire account in as well.

What marketing channels are most profitable for the business?

Email, Facebook, Instagram, Google

How does the business currently acquire customers and what is your breakdown for marketing costs?

We acquire new customers through social media and search engine advertising. Our biggest ad spend by far in the last 12 months was Facebook which was $200k. Google ads is a small portion at around $13k.

How big is your current team? How many people does it take to run this business?

The way we have worked to set this business up I believe it would take one smart and capable person 20-25 hours a week to run this at a pace to scale and grow. 10 hours a week if you want to stay around the same rate as we are now.

What’s the reason for selling your business on Flippa?

I have two other businesses I am building including a chocolate factory in Salem, OR.