Hey everyone,
I’ve got a chance to buy an online electronics brand. It’s pretty big, making almost a million bucks last year. But here’s the deal - it used to have two owners, and now there’s only one. So it’s not getting as much love as before.
The brand gets most of its customers from Facebook and Instagram ads. About 20% of people buy again. They spend about 30% on getting customers and keep 13% as profit. I think I can cut some costs, but I’m worried about relying so much on social media ads. If those mess up, sales could drop fast.
The price is less than what they make in a year, which sounds good. But I’m not sure. What should I look into before buying? Is this a good idea? Any thoughts would be super helpful!
Thanks!
hey sailinbreeze, this opportty seems interesing but check if clients rerun on loyalty. maybe try other channels instead of all social ads. also, look out for any hidden liabilities or legal hassle. best of luck in your decision!
The opportunity sounds promising, but there are several factors to consider before making a decision. Firstly, investigate the reason for the departure of one owner - this could reveal potential issues within the business. Secondly, evaluate the sustainability of the current marketing strategy. Over-reliance on social media ads can be risky; diversifying customer acquisition channels might be beneficial. Additionally, examine the product range, supply chain, and operational efficiency to identify areas for cost reduction. Conduct a thorough due diligence, including financial audits and market analysis. Lastly, consider your own expertise and whether you can add value to the business. While the price seems attractive, ensure you have a solid plan to grow and stabilize the brand before committing.
Hey SailingBreeze, sounds like an intriguing opportunity you’ve got there!
Have you considered digging into why one of the owners stepped away? Sometimes that can reveal valuable insights into the business’s health or potential challenges that aren’t immediately obvious.
I’m also curious about the product range—does the brand offer a diverse lineup that might help it adapt if market trends shift, or is it more focused on a few key items? That could really influence how well it might weather changes.
And what about customer sentiment? Have you taken a look at reviews or social media feedback beyond just the repeat purchase rate? It might shed some light on the overall customer experience and loyalty.
What’s your gut feeling about it all? Sometimes that instinct can pick up on things that numbers miss. Would love to hear more about your thoughts as you explore this further!