Seller interview – Romperjack

Seller interview – Romperjack

They followed a Kickstarter campaign and beat the competition at their own game.

Every now and then we come across something truly unique. It’s the uniqueness that captures the hearts and wallets of consumers making what was a clever idea into something highly successful. Below we interview Justin the founder of Romperjack which was founded in 2017 and since then has experienced incredible growth. They’ve tapped into a fashion niche and from their strong beginnings as a men’s only fashion line they’ve successfully expanded their footprint. 

The business sells romper suits and was established after seeing a Kickstarter campaign. They hustled and have exceeded all expectations, with annual revenues of $594,000.  

Interview with the Founder

You’ve built an impressive eCommerce business. How did it all start?

We came across a campaign trying to raise money to launch male rompers.  The Kickstarter campaign had a goal to raise $10,000 in 30 days. They surpassed this goal instantly and were able to raise $350,000 in just 3 days.  We instantly realized this was going to be very successful. So, we quickly went to work to launch our own brand with an aim of beating them to market. Romperjack was born. 

Your business is built on creative genius and quality manufacturing. Tell us about how it all comes together?

The creativity of our brand really comes from our customers.  Every style we design and decide to launch is voted on by our customers.  It’s the perfect product-market fit for us! We have found some really great manufacturers overseas that are extremely patient with our focus on quality.  They always go above and beyond for us and make everything just right before going to full production with new styles. 

The audience response is something most companies would dream of. Why do they engage / what is your ‘secret sauce’?

Our audience really engages well (with Romperjack) because the products we design and sell are something they have never seen before.  80% of our buyers are LGBTQ and they are the kindest and most supportive audience. We really care about our followers and we always make sure to share quality content and respond to all of their comments.

A company like this is reliant on a team of fantastic marketers, designers etc. How is the team structured?

Actually, this company only has 2 people that actually do the marketing and designing.  We found a way to make marketing and designing simple and make it run like an efficient well-oiled machine.  A lot of the time, designs are sent to us from our customers or influencers and we kind of just roll with them. It makes it super easy for us.

You are moving on to a new passion project. Why are you leaving such a great business and what are the opportunities for accelerated growth?

Yes,  we are moving on and we are sad to let our baby go, but we have a brand new exciting company that needs a little jumpstart.  We started a company called Whiz Tutor. Whiz Tutor is a mobile app and web app that allows students and parents to book on demand local in-person tutors anywhere, anytime. We need funds to boost this company and to take it to the next step.

The good news for the new owner is that Romperjack has so much potential and there are so many ways you can take this company to the next level.  First, is to offer our products to customers in other countries like Brazil. We have more Brazilians visiting our website than anyone else. Second, Romperjack has had offers to go into retail stores but we didn’t have the money readily available to get a large enough inventory order at the time. Third, is to market our products to other interested markets, we have really only focused on the LGBTQ market to date.

It would seem you are dependent on social media to advertise. What kind of risk is there in such a dependency?

Actually,  social only makes up 45% of our sales.  We have a lot of organic and direct customers.  Meaning they search for the rompers or jumpsuits on google and we pop up.  Not only do we show up on PAGE 1 of Google, we show up on PAGE 1 SPOT #2. Which many companies never make it to this level, Romperjack has amazing SEO power.

What does the competitive arena look like? Who do you worry about at night?

We really only have one 2 competitors: one is RompHim “they are the original company that launched on Kickstarter”  and the second is Zesties. Zesties is a bargain low-quality brand that is sold on Amazon.

Romperjack is focused on selling premium rompers and jumpsuits that are actually stylish.  If you actually look at these companies style you wouldn’t even catch yourself dead in one. So many of our customers have said they returned their Romphim and bought a Romperjack instead. Plus, competition is good!! It keeps us striving to do better and to continue to give our customers an amazing product. 

A smart businessman once told me “if you don’t have competition you are either a complete idiot and no one will ever buy what you are selling or you are a complete genius!”

Just a toe in the water or dive straight in? Buying an eCommerce business

Just a toe in the water or dive straight in? Buying an eCommerce business

The new favoured investment of many busy professionals is the acquisition of online businesses, because of the generally higher yield than real estate or share portfolios. Additionally, in view of their own demanding time commitments, one of their key selection criteria when deciding on an e-commerce business for purchase is that once the deal is done the website on which the business is founded, along with the revenue stream it produces, can be largely self-managing.

On the other hand, many retired or semi-retired ‘baby boomer’ investors like me achieve a great sense of engagement from acquiring online businesses where they can see a potential for growth and improvement, drawing on their own active involvement in the development of the business.

So, fully understanding the level of ongoing time investment which will be needed over the long-term, whether minimal or fully actively engaged, is a critically important consideration in buying any online business.

We all understand the process of buying real estate for investment, or a conventional goods or services business. We have a good sense of the selection criteria to apply in choosing an investment, and the due diligence needed before making a final decision. However for many investors, e-commerce businesses are unknown territory so there is an understandable tendency to play safe and avoid risk by beginning with only a low-cost entry investment to test the waters.

Yet, an overly cautious entry is not necessarily the wisest strategy. The lowest prices are obviously attached to lower-performing and lower-yield businesses, which may or may not have strong growth potential. If the potential is genuinely there, then a corollary of the very modest financial investment will be the need for a high buyer engagement level and ongoing time commitment.

So let’s look at how it all works

Essentially the success of the online business you are considering purchasing depends on the traction gained by the website itself. Generally it is high quality, engaging content that drives regular and growing traffic to the site. Many highly successful e-commerce businesses largely outsource the content to paid freelance content writers. Good content writers are readily available in virtually any field and constitute a very affordable operating expense if the website is established and running effectively.  Of course, many business owners either write or edit the content themselves, and often find this direct involvement essential to their sense of engagement with the business. This discretionary control over the level of the buyer’s personal time investment is one of the most appealing aspects of online business acquisition.

There are different types of revenue streams which a successful web-based business can produce, assuming that it is not seeking to sell its own unique product inventory. (Inventory-based businesses which develop and sell their own products in an online environment, or hold the rights as a franchise or official reseller, are in a different category and are not considered in this article.)

The balance of content compared to product marketing varies, and it is important to understand how your potential e-commerce acquisition currently profiles itself. Most commonly the niche content area, just for example boating and fishing or health and wellbeing, is the ‘shopfront’ and the interest generated by high value and continually updated content is what draws the potential purchasers to the site. Encouraging visitors to subscribe to a regular email bulletin is a good strategy to build regular follower numbers. In this profile, the marketing of products is presented as a sideline service and it is essential that promoted products are tightly linked to the niche content, which is the drawcard.

At the other end of the spectrum are the e-commerce sites which directly foreground a vast range of products within an identified interest area, for example skin care products. Again, none of the inventory is owned or handled by the seller. Profits come from the margin between the price paid by the customer and the wholesale price charged to the seller. Alternatively, the profit may be in the form of a commission paid by the manufacturer or, more often, the wholesaler. It is important to understand that profit margins are characteristically small and this e-commerce model generally depends on large volumes of sales.

Using Dropshipping, the visitor/customer purchases directly from the website. The business then purchases the product from a third party (wholesaler or manufacturer) and has it shipped to the customer without ever handling the product itself. Customised product labelling, packaging and delivery branding enables the selling of items which are presented as part of an in-house brand with their own SKUs or Stock Keeping Unit numbers unique to the business.

Even in this model it is generally crucial to success that the customer experience is enhanced with substantial blog content, outsourced to freelance content writers, and often with other incentives such as online product advice when a customer submits a query. Commonly in this model the business will be competing with other sites selling the same products and because there is no viability in competing on price, success depends largely on competing on the basis of providing a highly positive customer experience. Search engine optimisation (SEO) is also crucial here for building customer traffic, but this again is a skill set which is outsourced and not particularly expensive to obtain. Cross-promotion is often established, whereby advertising material such as ‘gift cards’ for another business in an unrelated niche is included in your product packaging, on a reciprocal or even paid basis.

If your online business is geared up to sell items with your own branding, even though the same item is marketed by other e-commerce businesses, then each item will carry its own SKU or barcoded stock keeping unit unique to your own site. Often but not always, e-commerce businesses which use this model for branding and delivery still have an interest-based website which is heavily dependent on quality niche content. There are some highly profitable sites with only a small number of SKUs while others, for example in the apparel and accessories niche, may have hundreds of SKUs.

So how do I choose my investment business?

Clearly the current profitability, or the potential profitability you can see, is the Number 1 criterion. Revenue is not the issue. Net profit is. Ensure the seller is fully transparent about all costs, including all outsourced services. Accurately knowing absolutely all of the business costs which are entailed is crucially important. You can buy e-commerce websites even on eBay, but that would leave you completely exposed to unscrupulous sellers, of which there are many.

As a guide, expect to pay around 24-30 times the audited monthly profit (or 2+ times the annual profit) for most e-commerce businesses, although there are many variables affecting this figure. Check what expertise, for example experienced outsourced content writers, are coming with the business. Factor in a ‘passivity premium’. That is, if it’s unnecessary for you to invest an enormous amount of your own time managing the business in an ongoing way, then it’s worth more financially than if your own time and expertise is a major investment cost.

Generally, it is wise to consider only businesses with an established record of consistency and growth. Ideally, be assiduous in trying to understand why the seller is selling. There are many possible reasons for the sale, beyond profit-taking. Knowing the background to this may be important in your final decision. Has the business already ‘peaked’ perhaps? Having a precise task-matrix of the current owner’s involvement is a key to assessing the cost of replacing the owner’s time and expertise. If you don’t want to take this on yourself, is it outsourceable and if so at what cost?

It is vital to know what exactly is being transferred with the purchase. Will existing product supplier agreements and merchant processes transfer with the business or do they remain with the current owner personally? If so, that is a potential deal killer.

Approaching this whole investment evaluation process in a positive way, it’s actually pretty engaging and energising. It’s been kind of fun for me. In my case I’m looking for active involvement in a niche content-based e-commerce website where I can personally do much of the writing and editing, while outsourcing the website optimisation to others. Looking at the some of the offerings on Flippa and imagining their potential and their ‘fit’ with my personal interests is exciting. 

Survey the surroundings, but finally it’s best to dive straight in

Invest just a small amount too over-cautiously and the outcome isn’t likely to be all that spectacular. I’m going to be responsible with the investment amount I’ve set aside – but no toes in the water for me. I’m ready to jump in now. Good luck with your own investment journey!

 

Case Study: EZTool

Case Study: EZTool

Platform: Amazon FBA
Business Model: eCommerce
Business Age: 3 Years
Sell Price: $160,000

EZTool sells watch repair kits via Amazon FBA. They’ve tapped into a niche and the growing direct-to-consumer FBA space. The search power and logistics capability of Amazon has helped them to find a sweet spot. The product is simple and suits the home watch enthusiast! This month EZ Tool Founder Angus Hess successfully found a buyer and has recently completed the sale on Flippa.


What is the product?

EZTool sells two different watch repair kits. Kit one is more conclusive with a wrench and illustrated manual and kit two – the QuickFixxer – is a 16 piece tool kit.


What makes EZTool such a good business?

There’s really two things. Firstly, it’s found a path to popularity in a niche. The product is well supported by a 41 page illustrated guidebook and comes with a 100-day replacement guarantee (nothing like a guarantee to woo customers). Secondly, they’ve successfully leverage Amazon FBA and benefit from cost-effective shipping, storage and world class customer service.


Who is the EZTool customer?

There best selling kit is perfect for watch enthusiasts and connoisseurs alike. Aimed at those who enjoy DIY as well as those looking to save money on pricey jewellers fees the EZTool products sell steadily all year round. And, they’ve found their kits have become very popular gifts.


Why was it so appealing?

Easy to understand this product had significant interest among the Flippa buyer community. Couple that widespread appeal with the FBA model, the strong consumer feedback scores and strong financial results – EZTool was generating between $5-14k profit monthly, which is in part due to low time commitment – and you have a winner.


How did Flippa assist?

The Flippa model has evolved and it’s beginning to suit higher value buyers. That alone is a big win. Flippa now has over 150,000 registered buyers representing a combined purse of over $9bn wanting to be placed. There are not enough sellers. Once they pop up, sellers like EZTool are benefited from the self-service platform, lower success fees than other channels and dedicated account management.

Seller showcase: Dion Lovrecich, oktoberfest.com.au – eCommerce business for sale on Flippa

Seller showcase: Dion Lovrecich, oktoberfest.com.au – eCommerce business for sale on Flippa

This week we caught up with Dion Lovrecich, who along with his sister Andrea, are the owners of business oktoberfestcostumes.com.au. The business is currently listed on Flippa. Here is the full conversation below. 

Background of the business 

Tell us a little bit about the background of oktoberfest.com.au? I understand your sister is involved in the business in some way?

Yes she is and we can’t believe how this has taken off! Within three months it’s doing $60,000 in revenue and has already made $14,000 in profit. This is my sister Andrea’s business and I’m helping her sell it. She’s had ten years experience in costumes but always in a bricks and water capacity. I told her she had to take it into an online capacity and I was open to helping her since I have worked in digital marketing for years. Within just a couple of months, it absolutely took off and we are still getting sales even though October has finished now.

 

That’s probably a big question and tell us more about your customer base? What do you sell on oktoberfest costumes.com.au?

We sell a traditional German costume with the ladies wearing a dirndl and gents a lederhosen. These costumes are actually used all year round which many people don’t realise. In truth, this a highly seasonal business and we did more than 800 transactions over the last two and a half months. The thing is, customers still come through, but if I’m being honest it is a seasonal business. It has achieved huge growth and the potential is there for someone to build the business with other types of costumes or for a buyer to attach the business to something else.

 

The customer base and how this was grown

 

There are customers coming through thick and fast from the October period, in celebration of Oktoberfest of course. As you have said, the opportunity for the new owner is to obviously take it on in its current form but is it also to grow this into a generalist costume business?

Yeah, it could be a generalist costume business or it could be a closer niche to German costumes or you could pick another niche entirely to get into. There is a lot of organic traffic coming through and we have used social very successfully, along with some paid advertising too. The combination of the two was such a beautiful start. Andrea and I are keen to sell it but she is torn because she wants to keep the business given the phenomenal results we have seen in the first few months. At the end of the day, we’ve decided ‘let’s do this, it’ll be good for you (Andrea)’ and hopefully, we can find the right kind of buyer. Andrea wants to pass the business onto the right buyer.  

 

The business opportunity and marketing efforts to date 

 

Fantastic, when we talk about buyers, we here at Flippa often educate buyers and tell them to make sure that they know how the business is acquiring customers. So from the perspective of Oktoberfestcostumes.com.au, how has it been so successful early on? What are your marketing methods?

You can’t be that successful without paying for traffic. If you see a website that says they don’t pay for traffic and claim to have thousands of viewers, ask them a few questions. In fact, ask the guys at Flippa, they’ll help you out with that.

 

So you guys are buying keywords around the Oktoberfest period and around no doubt the specific product units so lederhosen and dirndl. You mention social, so how has social been beneficial? What platforms have been working for you?

It has been Incredible and the cost per click has been so low. There can be a lot of industry terminology that people throw around. But, at the end of the day, the cost per acquisition/cost per sale was exceptionally low. People liked the adverts, and they were being shared a lot on Facebook and Instagram and that’s how we built the business so quickly.

 

Andrea and Dion’s business is now on Flippa and its Oktoberfestcostumes.com.au. This successful start-up is six months old and has already made $60,000 in revenue. Make sure you check this profitable listing out. 

Seller Showcase: Madeleine Saric Dubleup – eCommerce Business for Sale on Flippa

Seller Showcase: Madeleine Saric Dubleup – eCommerce Business for Sale on Flippa

This week we spoke with Madeleine Saric, owner of Dubleup business which is currently for sale on Flippa. Here are some highlights from our conversation with her.

Can you introduce us to Dubleup and tell us how it all got started?

So Dubleup is on an online e-commerce platform and we sell tech accessories for Apple and Android products, phones, tablets, watches. Everything is on there that you can imagine, from power banks to cables and cases. The list goes on.

 

Your top seller is the credit card power bank charger, so tell us a little bit more about this?

I developed the worlds smallest power bank. It is the size of a credit card and fits into the credit card slot of your wallet. It is essentially designed to give that extra bit of charge for when you are out. That was the idea behind it, I did travel a lot and didn’t need the chunky power bank, I just needed a little bit of extra charge.

 

Let’s us back up a little bit, who are you and how did all of this come about?

I’m Madeline Saric and this came about when I was doing an internship overseas and the boss I had told me, ‘start something when you are young and you won’t regret it’. So I came back to Australia and whilst I was still studying I came up with the designs for the power bank. Working at Apple, I came to understand what consumers wanted and what was missing from the market. This is what led to the evolution of Dubleup and this small power bank. From there I started working with teams in China, R&D and engineers and coming up with the final product which is the power bank.

 

Approximately how many units of this product have you sold into the market?

Apple and Android combined we have sold tens of thousands. Apple is obviously a lot more successful and we have Apple certification as well so it is approved by Apple and supports any products that they sell.

 

Looking at your business, what is there for a potential buyer to take over?

At the moment most of the operations are outsourced, marketing, production, manufacturing etc. You as a purchaser for the business would just simply use your laptop and your phone to run the business. Everything is produced and manufactured in China. It’s a very self-sustaining business with a huge opportunity for growth in terms of building new products and investing in marketing to grow the business. You could get the product into brick and water stores and also grow the online store

 

Do you own the brand and have the ability to continue with manufacturing in China?

Yes and definitely.

 

Why are you selling Dubleup?

The first reason is that I wanted to build a business, get it to a stage where I could sell it and differentiate myself from other people. The second reason is I’m a firm believer in doing something that you absolutely love and are passionate about and as much as I love technology, I’ve lost the passion for it.

 

 

 

Madeleine Saric is the founder of eCommerce electronics business Dubleup, which is currently for sale on Flippa.