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BUSINESS REFERENCE : IU092 / RightBiz CHANNEL ISLANDS BASED MAIL ORDER COMPANY SPECIALISING IN MEMORY CARDS, PC CONSUMABLES AND ELECTRONIC GADGETS | | | | | | Channel Islands based mail order company specialising in memory cards, PC consumables and electronic gadgets Confidentially offered for sale Ref. no: IU092 Location: Channel Islands Asking price: £300,000 | | | BUSINESS LOCATION: | Undisclosed Relocatable CHANNEL ISLANDS | | BUSINESS SECTOR: | Retail | | TRADE TYPE: | Computer & Equipment Sales | | SALE: | Agent Sale | LEASEHOLD: | £300,000 | | | | | | | | | | | BUSINESS DETAILS: | Business profile:
Established in 2001, this Channel Islands based mail order company, is a specialist in the e-tailing of memory cards, PC consumables and electronic gadgets
As a Channel Islands based business, this company benefits from the low value consignment relief which allows it to ship goods in to the UK without the need to charge VAT for all shipments under £18 – enabling this business to be extremely price competitive. This business is sophisticated, well managed and strategically organised operating a very sophisticated fulfilment system which performs calculations on the value of each order placed, to ensure it is broken down into consignments of less than £18 in value wherever possible.
Over 90% of orders are processed via the web, without the need for human intervention resulting in a low cost of sale. The remaining orders are processed via a Call Centre with the use of 0870 numbers. This business is featured on every major shopping and search engine portal in the UK, dominating the product listing pages of these sites, squeezing out the competition.
Accepting the competitive nature of its marketplace, this is a low overhead business with all key functions outsourced to tried and tested suppliers and service providers reducing the requirement for day-to-day management resources and freeing up the Owners to concentrate on their other business activities.
With turnover for the current financial year projected to exceed £3.25m with a gross profit of approximately £500,000, this represents a significant opportunity for another industry player interested in gaining additional market share – or alternatively for another mail order business based in the UK, also retailing products under the £18 mark, perhaps in another market sector and therefore able to take advantage of low value consignment relief across their full range.
Key strengths:
One of the biggest in its industry, this business has been deliberately customised for off-shore operations. Its products are fast moving consumer goods ideal for shipping mail order as they are small, lightweight and not susceptible to damage in transit. It has a loyal, repeat customer base.
This business has invested heavily in marketing to date to build its market position – working with every portal and search engine in the UK. It has a very active e-marketing programme in place and has built high levels of awareness through trade press advertising.
Over the years of its operation this business has developed excellent relationships with the manufacturers of the products it sells and its key suppliers ensuring good quality products, competitive pricing and service delivery.
By far the greatest strength of the business, however, is its offshore status and the benefits it gains from the low value consignment relief, which allows it to ship goods in to the UK without the need to charge VAT for all shipments under £18. With the Channel Islands’ authorities actively discouraging UK companies from setting up subsidiaries in the Channel Islands and mail order businesses in particular, this represents an almost unique opportunity to acquire a business offering a distinct competitive advantage.
Another key advantage of being based in the Channel Islands is that this business benefits from not having to pay any corporation tax.
Key opportunities:
Having established this business as a leading on-line retailer, there is an outstanding opportunity to build on the existing business levels and customer base of this company. With a strong demand for this business's products, combined with a capacity to increase turnover, a new owner contributing fresh ideas, will have every advantage of building on an excellent platform.
This business is operating in a sector experiencing significant growth as home working increases, the penetration of PC’s and printers in the home continues apace and more and more devices such as mobile phones and MP3 players require memory cards.
The greatest opportunity however lies with the merging of this business with an existing operator within the industry or alternatively by another mail order business retailing products under the £18 mark. With the £18 VAT exempt rule applying throughout the EU there is also significant scope to take this operation into other European countries.
Advertising and marketing:
This business was launched with a highly targeted marketing campaign combining specialist consumer press activity – full page, full colour display ads in photographic and PC magazines for example, with heavyweight online advertising.
Sales leads are generated through a wide range of targeted online and offline marketing with a strong presence on every major shopping and search engine portal in the UK and equally effective 3rd party affiliate programmes. This business is very active in e-communication, e-mailing over 130,000 customers fortnightly with details of new products and promotions.
Employees:
The Owners are responsible for the day-to-day running of the business, supported by a highly trained and well motivated support team comprising Customer Services, Purchasing and Administrative staff.
Premises:
There are no premises involved in the sale of this business. As such it is easily re-locatable.
Financial Information:
The business is offered for sale as a going concern. All financial discussions will take place directly between the vendor and all interested parties under the auspices of Turner Butler.
Turnover for the current financial year is expected to exceed £2.25m, with a gross profit of approximately £375,000 and a net profit of £75,000.
The Asking price of £300,000 is for the assets and goodwill in the business – representing several e-commerce sites and the business infrastructure including the very effective back office ordering and fulfilment systems and processes. Alternatively the limited company will be made available on a cash free, debt free basis.
Reason for sale:
The current Owners wish to concentrate on other business interests and pass this business on to new Owners to build upon the firm foundations already laid.
Support and training:
The current owners will provide all necessary training and handover to ensure a smooth transfer of the business to new Owners, although a swift and easy transition is envisaged.
| | | | | | FOR SALE | | | | | SELLER: | TURNER BUTLER | | CONTACT: | 01895 25 6000 | | REFERENCE: | IU092 / RightBiz | | ENQUIRIES: | | | | | | | | | | | | | | | | | | | | |
