An established e-commerce focused office-furniture business with strong growth rates and excellent upside potential, the business acquires used high-end office chairs, refurbishes them, and resells them at roughly ½ of the retail price, offering unmatched value.
Over 80% of the sales volume is sold online, with only 4% of the total sales going through Amazon and eBay. There is a significant potential to increase sales by developing both online and traditional sales channels.
Gross margins for the chairs are well over 50% and the business is anti-cyclical, i.e. somewhat recession proof. The demand that might potentially be lost in the lower- and mid-levels of the market in the case the economy weakens would likely be substituted by the increased demand from the customers from the top market segment. At this time, the business is experiencing a strong growth without any investments and involvement by the owners.
The firm also does furniture repairs, provides service contracts, and resells replacement parts. However, those segments of the business were largely neglected until recently, and account for only a small portion of the income. Servicing in this market niche is highly profitable and the firm already has sufficient capacity to greatly expand its revenue in that segment. Likewise, replacement parts sell at even higher margins.
The staple of the business the Herman Miller Aeron chair which is the best selling piece of furniture ever made, with millions having been sold. Retailing for over $1000, this chair can be can be thought of as the Rolex of the office chairs. There is a very strong demand as they have come to represent a company’s success and are seen as a status symbol by office workers.
The manufacturing process does not require any high-level skills or special experience. The staff is well trained and an owner-operator without experience in manufacturing can run the business. The current manager would like to continue running the business. In addition, the owner is willing to provide training if needed.
An increase in sales volume, as well as the range of product and service offerings, would bring a disproportionate increase in the bottom line. An efficient operator could rapidly improve the already solid profitability.
The business is preapproved for 90% SBA financing with a reputable bank, so the business can be acquired for as little as $115,000 down, including the loan and escrow fees and the SBA loan guarantee.