Website Closers® presents a Recurring Revenue based eCommerce Brand that has become a popular Subscription Service for Fitness Products from some of the top brands in the lucrative world of Fitness Apparel, Gear, Accessories, and Nutrition. Paying subscribers receive a curated selection of 5-8 products delivered to their door on a monthly basis. The Brand’s modern website also has the option for users to buy individual fitness items. The company has spent nearly a decade attracting a loyal customer base for its subscription boxes, which are now 65% of all sales (with the balance made up of individual, one-off sales).
For investors, this is a terrific opportunity to take advantage of the Loyal Customer Base this company has built up over time. Interesting suitors might be those that currently operate in the eCommerce Fitness Vertical and looking for additional channels to offer their brand(s), those that connect with a Fitness Audience that might be interested in the beautiful subscription boxes offered by this company, or any other entrepreneur or group that is looking to get into eCommerce and learn the ropes from ownership.
The company markets individual products on its Branded Website and on Amazon, so an investor has the option of focusing on growing the brand’s subscription box business, targeting increased DTC sales of products sold individually, or both.
This company could be successfully scaled into two separate businesses, both with the potential for sky-high revenue since their customers have been resilient in the face of rising inflation or interest rate increases, giving the company not only higher sales, but also an impressive 62% Repeat Customer Rate.
This brand wisely recognized that subscription-based models have become increasingly popular today, both among customers and eCommerce businesses, especially since folks are always looking for gift ideas for their loved ones … and, the overall fitness industry has exploded, so the audience is larger, giving a buyer of this company the opportunity to grow into market share through various other strategies.
Once customers find a product they like and decide to continue purchasing it, subscriptions offer fast and reliable deliveries. For the business, it means a higher customer satisfaction level and a steady revenue stream. That’s exactly what this business is now enjoying as the company’s Average Subscription Rate is 16.84 Months
Launched in 2016, the company cultivated relationships with other brands to assemble appealing products for their monthly subscription boxes, designed to give fitness buffs everything they need for an enjoyable and invigorating workout, whether it’s at a gym, at home, or in a class. While these boxes now make up 65% of their revenue, the rest comes from Amazon and their Website.
Their subscriptions are available for one, three, and six-month plans (although many customers opt for longer) and they have 50 SKUs available. While most of its SKUs are not brand products, the company has requested exclusive designs and colorways for certain products provided by its suppliers, giving the company an opportunity to resell these items with limited competition and to build on its brand awareness campaign.
With an Average Order Value of $55, their sales remain steady thanks to their subscriptions, while the company enjoys sharp spikes in profits around the holidays (when their SKUs become great gift items), and again at the start of the new year when millions make resolutions to get back in shape.
Their customer demographics are strong, with the average customer being around age 35 with an interest in CrossFit and other intense forms of athletics. More impressively, the company appeals to high-wage earners who love spending their disposable income on these products because they believe they’re getting a deal. Because so many keep their subscriptions long-term, the company’s Lifetime Customer Value is considerably elevated at $900.
Social media has served the brand well as they’ve grown their core audience, giving them the ability to connect with thousands of fitness enthusiasts across the country and introduce their products to them.
With a large following on Facebook of 24,000+ and an additional 38,900+ followers on Instagram, their content strategy enables the brand to connect with people interested in fitness and who are looking for products that enhance their workouts. The company also runs PPC ads on Facebook and has a Facebook group that has been a great tool for communicating with fitness-minded viewers.
They also generate organic traffic through their SEO program which fully optimizes their website for top industry keywords and includes an informative blog on the site. These have proven to be effective tools, giving the company 10,000+ unique monthly visitors to the site.
Their marketing also includes providing a free gift with their first subscription box to encourage buyers to continue their subscriptions for longer periods of time.
Additional tools are available, including taking full advantage of the 40,000 subscribers in their email database for a regular email newsletter for promotions, special deals, and upsells, launching an SMS text messaging campaign, and using influencers on their social media accounts to expand their customer base even further and build up their brand recognition
The brand’s orders are processed through a partnership with a sub-box fulfillment service that ships their monthly orders. Their Amazon orders and individual items are either shipped through Fulfillment by Amazon or by their brand partners. Excess inventory is maintained for their online store, with the company keeping several hundred of each SKU to keep up with new orders. That inventory is stocked in a 1,500-square-foot warehouse, with inventory managed by their Shopify account.
These operations run so smoothly that the current ownership does not have any full-time employees, but still only works about 20 hours per week, focusing on curating the boxes for shipment, handling customer service, and launching promotions.
Virtual assistants are used for email marketing and to handle social media posts. Additional VAs could be brought on to take over additional daily tasks.
After seven years, this brand is in an enviable position, with a loyal and enthusiastic customer base, steady recurring revenues that peak in the 4th Quarter, and some impressive scale opportunities moving forward. The company is now looking for an investor who can bring a fresh perspective and new energy to this business and help scale it to a much more profitable position. The tools are there for an investor to take advantage of.
As their subscription rates get higher, the revenue will continue flowing in as the new owner takes advantage of serious growth opportunities within the booming fields of fitness gear and subscription plans.
Link to deal: here