TopTacticalGear.com is for sale on Flippa for $400K (see listing here). And this was the pitch:
“The business makes a monthly profit of $23,113 with gross revenue of $231,026 per month, and they have a return customer rate of 11%. The site receives 307k page views per month with traffic coming from Facebook ads, SEO optimization and email marketing.”
$23K in monthly profit, which means that is $276K in yearly profit. They have valued their business at 1.44X net profit. That seems like a terrific deal.
And there is a lot to like about the website. Their photos and content are excellent. They have 18K followers on Instagram (however, their Flippa listing says they have 47.5K followers. A little red flag there). On Facebook they have 38K followers. Their content on social looks a little like stock images but still decently cool photos. My only criticism would be it lacks a little personality (see Black Rifle Coffee, they have some personality).
Here is my problem with their offering:
“The business is seasonal, with most of the revenue coming in Q3 and Q4”. – TopTacticalGear.com Owner
That is not true based on the data I am seeing. First, their business has only been around for 1.5 years. What do they know about seasonality?
Take a look at these two charts:
Their peak revenue month and peak traffic month came in March 2021 (and previous months ramped up to that peak). March is not in Q3 or Q4.
Their top paid search term is “tactical gloves”. This term is searched on average about 10K times per month. When you look at the past 24 months of this search term, you do not see any seasonality:
So why are they mentioning seasonality?
My guess is because they have lost money in April, May, and June and want to tell the story that they lost money because of seasonality and things will get better.
They peaked in March with $345K in revenue. Since then, they have been on a downtrend:
April – $227K
May – $158K
I do not have their July numbers, but I did start tracking their sales on their website starting in August. From August 7th to August 19th they received 475 orders. On average, that is 40 orders per day. Their number one selling item is the $38 Tactical Gloves (plus $6 for shipping). I estimate their daily revenue in August to be about $1,700. That means they most likely will generate about $50k-$55K in revenue in August.
That is on pace with their downward trend over the past 6 months. In August of 2020 they reported $135K in total revenue. Year over year, their business is down 60%. Some of it could be attributed to the pandemic boost last year, and the IOS/Facebook update this year. But why would I want to buy your business the way it is trending? And there is no sign of the seasonality narrative they are telling.
You could replicate this business…
Really, the only value I see for buying the company would be to get their inventory and the traction they have already generated (Facebook, Instagram, and email list). But it may be better to take the $400K and invest it in replicating this business.
I found similar tactical gloves on Alibaba:
You can probably get these branded and landed in the United States for about $4.50-$6.00 per item.
How they drive their traffic:
Top Paid Google Search Keywords:
- tactical gloves
- tactical gloves amazon
- top tactical gear
- top tactical gear gloves
- indestructible gloves
- army tactical gloves
Top Tactical Gear has 60 ads active right now on Facebook
Get some samples in and go all out on a photo shoot. You probably could get everything done that you need with $10K – $15K. If you really wanted to grind and had some photo skills, you can try to create the content yourself. Take the photography, create a Facebook and Instagram account. Boost some of the posts or run a giveaway to start getting followers.
Setup a Shopify account ($30/month) and try to replicate the design that TopTacticalGear.com has. You may need to pay a designer to customize a theme for you but you should be able to get that done for less than $5K on Upwork.
All in you should be able to have inventory ready to ship in the United States, a website that looks extremely similar to their website, social accounts with content and followers, all for under $50K. I don’t think their traction and social accounts are worth $350K.
You will need to invest some money into digital advertising. Maybe around $15K for the first month. But remember this should be an investment, and it will return you profit (you just may need to float it until it starts returning).
In my opinion, you do not need to spend $400K to have this business. You should be able to replicate it and have a similar level of sales almost immediately with about a $75K investment. And if you have time on your side, you can even start smaller and bootstrap it to eventually grow to do a few hundred thousand dollars in sales a month.