Almost everybody wears socks and shoes which makes the market for these products huge! In 2016 socks were the third largest general merchandise category in the US based on total sales dollars, beating out a number of other everyday accessories. Not only is this a big market, but it continues to grow. According to industry forecasts, the global socks market is projected to reach a $34 Billion USD by 2025 end from an estimated $21.5 Billion USD in 2017.
This business is a multi-channel business that sells name brand shoes and socks through its Amazon storefront, multiple websites and a brick and mortar retail store. While it offers both product categories, its focus has been on selling socks with 70% of sales generated from its socks product lines. Amazon accounts for about 90% of revenue. Marketplaces like Amazon are the future of ecommerce and the owner has dialed-in a process to consistently sell at MSRP on these sites while also limiting competition on Amazon. He has proven that Amazon is not a low margin game if you know how to play it right.
In 2015, the owner developed a custom ecommerce platform to manage and grow the business. Utilizing customized software is integral to success on Amazon right now. You need smart software to minimize the storage and fulfillment costs associated with Amazon fulfillment centers and to minimize the number of employees needed. For its revenue, this company needs very few employees leaving higher profits compared to the average operation.
The business is successfully run by one owner working full time who handles supplier relationships and finances. In addition, there are 3 FT and 4 PT employees who handle day-to-day operations. One employee is currently being trained to take over the owner’s responsibilities making this business turnkey.
With many years of successful operations and YOY growth, the company has built a strong and well established foundation which includes key strategic vendor relationships, high Amazon rankings, custom Amazon listings, custom software which allows for not only efficient operations but offers strong scalability, huge customer lists and multiple sales channels. Having created a model for success, the foundation has also been laid to franchise its store concept.
Acquisition of this business offers a tremendous opportunity for a strategic buyer in this industry or for a firm seeking to enter the sock and footwear industry wanting to hit the ground running without the long learning curve and barriers to entry that comes with starting from scratch.