E-Commerce Retailer of High Efficiency Houshold HVAC Appliances

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Business Description

The Company is an e-commerce retailer engaged in the sale of high-efficiency household electrical heating and ventilating appliances. The Company’s products include water heaters, water boilers, solar heaters and panels, plumbing supplies, and fans. The Company’s primary activity is internet sales to the residential construction and consumer sectors.
The Company’s customer base mainly consists of individual consumers, homeowners, and others purchasing heating and ventilation equipment at retail prices. In 2012, electrical heating products accounted for 55% of sales; repair parts, 20%; solar heating products, 15%; and ventilation products, 10%.

About the Business

Year Established:
2000
Number of Employees:
12 Full, 2 Part
Facilities:
Company is organized as an S-Corporation headquartered in Vermont. The company operates out of two buildings, totaling 9,200 square feet, featuring 3,200 square feet of office space in one location, and 6,000 square feet of warehouse space in the other. The buildings are expected to provide ample capacity to accommodate substantial growth. Company employees totals 10 full-time and 2 part-time staff, in addition to the two principals.
Market Outlook/
Competition:
Company’s customer base mainly consists of individual consumers, homeowners, and others purchasing heating and ventilation equipment at retail prices. In 2012, electrical heating products accounted for 55% of sales; repair parts, 20%; solar heating products, 15%; and ventilation products, 10%. Demand for efficient heating, cooling, and electrical systems for the home is primarily driven by residential housing construction and sales. Success in the industry is largely driven by customer service, product availability, and expertise. These are areas in which company has excelled for over 13 years, and contribute to strong referral business, positioning the Company well for growth and success.

Company currently markets itself predominantly via continuous personal networking and relationship-based marketing activities. This marketing approach, coupled with company’s excellent reputation, accounts for the fact that a material portion of revenue is derived from word-of-mouth referrals. The Company generally advertises solely on the internet, and most activity is derived from organic search hits on Google or Bing.
Growth & Expansion:
The growth in retail purchases online will be due in large part to new online buyers, not just increased buying by veteran online shoppers. The number of US households with internet access has grown to more than 80% of total households, and more than 90% of those households subscribe to a high-speed (broadband) internet service, according to Leichtman Research Group. Consumer interest in conserving resources has driven sales volume of ENERGY STAR appliances. ENERGY STAR, a voluntary EPA program for vendors and retailers, encourages the manufacture and sale of appliances that use less energy and water. ENERGY STAR appliances can be significantly more expensive than comparable products, although manufacturers are working to decrease price differentials.Strong reputations based on years of superior service allow retailers to serve generations of customers. Many appliance retailers are family-owned and -operated and have been in business for decades. A good reputation takes a long time to build, and provides small, independent retailers a competitive advantage over large retailers.The established business methodologies refined by company are expected to yield growth going forward. However, management cites a key opportunity to accelerate growth trends over the next few years.
Expansion into physical stores to increase walk-in sales is an area where the company does not currently have a strong presence, and is an opportunity for growth. Already boasting the development and opening of stores during the historical period, management indicates that steeper growth for the business largely lies in accelerated investment in the company’s expansion efforts. This type of investment will facilitate the goal of increasing on-site revenues, as well as capturing the customer that needs a product immediately.
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About the Sale

Reason For Selling:
Owners would entertain remaining with new management during a reasonable transit
Training/Support:
Management Will Remain through Transition: Company's employees will remain with the business through and beyond the transition period. Management will ensure a smooth transition by remaining with the Company through the process, as needed.
Cash Flow Comments:
EBITDA: $274,000

Listing Info

ID:
1397749
Ad Detail Views:
3091
Asking Price:
 Not Disclosed

Gross Revenue:
$3,000,000
Cash Flow:
 Not Disclosed
EBITDA:
$2,000,000
Inventory:
$774,000
not included in asking price

FF&E:
$100,000
included in asking price

Real Estate:
 Not Disclosed

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Business Listed by

Ahmad Behjati

Behjati Capital Group LLC Mergers & Aquisitions

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