I am looking at buying the exclusive distribution rights to a commercial lawn mower company. Here are most of the details I have. Advice welcome, especially from anyone in a similar type business. Thanks.
- Exclusive rights to eastern side of the US. (everything east of the Mississippi)
- Commercial and high-end home lawn-mowers
- Company in business now 28 years
- Company is US based (mowers made in USA)
- Competition would be with brands such as 'xmark'
- Asking price high 4 figures to low 5 figures.
- If sellers claimed sales repeat this year, would likely pay full asking price back in one year or less
- Seller claims March/April/May is biggest sales time but sell all year long. If this happens, most of the purchase price would be made in profits from the first three months.
- Current distribution owner has had it for four years
- Current owner sold over 20 units last year with absolutely no sales and marketing effort. They claim this to have been their worst year of the 4
- Sellers say they are selling because they have 2 other successful businesses and don't have time to give this one proper attention
- Seller is a long time friend I trust
- Seller currently has 4 dealers
- Seller may be willing to take payments. (12 monthly installments or something)
- Mowers seem to be very high quality but I don't know much of anything about comercial mowers
- My goal would be to somehow transform the business into a much higher volume business
- I don't know how to find out how big the market might be.
- Current website is really bad, huge room for improvement.
- Seller is not doing anything with marketing at all, including online.
- The price point for the mowers is $5k-$7k-ish (seems like a lot)
- Manufacturer has a range of attachments to sell as additions
- Manufacturer has about 12 different models
- Mowers have some exclusive capabilities that other commercial mowers don't have
- Mowers apparently have very high customer satisfaction rating and return customer rate.
- Seller is not selling me any inventory - claims i don't really need to have.
- Manufacturer drop ships all sales and handles warranty claims
- Established pricing with existing dealers. Make about 10% to 15% when selling to dealers. 20% to 30% when selling direct. (seems low to me, but again, I don't know much about this type of business)
- Seller says they did return phone calls, and send out dvds/brochures when they got requests. (dvds they burn as needed and feature movies of the mowers in action. Brochures are free from the manufacturer)
- I co-own and help operate two other businesses full time and would not have much time to work this businesses. I'm hoping I can develop a much better online presence. Do off-hour online marketing. Somehow add many more dealers and transform the business into servicing dealers
- Seller makes about same markup on taking trade-ins of same brand/refurb and resale through closest dealer.
- Have a father-n-law with a successful lawn irrigation business who would likely be a new dealer and might be interested in being a partner in this excursion.
Probably more, but this seems like a good start.
Thanks for any advice in advance.
Thanks all
- Exclusive rights to eastern side of the US. (everything east of the Mississippi)
- Commercial and high-end home lawn-mowers
- Company in business now 28 years
- Company is US based (mowers made in USA)
- Competition would be with brands such as 'xmark'
- Asking price high 4 figures to low 5 figures.
- If sellers claimed sales repeat this year, would likely pay full asking price back in one year or less
- Seller claims March/April/May is biggest sales time but sell all year long. If this happens, most of the purchase price would be made in profits from the first three months.
- Current distribution owner has had it for four years
- Current owner sold over 20 units last year with absolutely no sales and marketing effort. They claim this to have been their worst year of the 4
- Sellers say they are selling because they have 2 other successful businesses and don't have time to give this one proper attention
- Seller is a long time friend I trust
- Seller currently has 4 dealers
- Seller may be willing to take payments. (12 monthly installments or something)
- Mowers seem to be very high quality but I don't know much of anything about comercial mowers
- My goal would be to somehow transform the business into a much higher volume business
- I don't know how to find out how big the market might be.
- Current website is really bad, huge room for improvement.
- Seller is not doing anything with marketing at all, including online.
- The price point for the mowers is $5k-$7k-ish (seems like a lot)
- Manufacturer has a range of attachments to sell as additions
- Manufacturer has about 12 different models
- Mowers have some exclusive capabilities that other commercial mowers don't have
- Mowers apparently have very high customer satisfaction rating and return customer rate.
- Seller is not selling me any inventory - claims i don't really need to have.
- Manufacturer drop ships all sales and handles warranty claims
- Established pricing with existing dealers. Make about 10% to 15% when selling to dealers. 20% to 30% when selling direct. (seems low to me, but again, I don't know much about this type of business)
- Seller says they did return phone calls, and send out dvds/brochures when they got requests. (dvds they burn as needed and feature movies of the mowers in action. Brochures are free from the manufacturer)
- I co-own and help operate two other businesses full time and would not have much time to work this businesses. I'm hoping I can develop a much better online presence. Do off-hour online marketing. Somehow add many more dealers and transform the business into servicing dealers
- Seller makes about same markup on taking trade-ins of same brand/refurb and resale through closest dealer.
- Have a father-n-law with a successful lawn irrigation business who would likely be a new dealer and might be interested in being a partner in this excursion.
Probably more, but this seems like a good start.
Thanks for any advice in advance.
Thanks all
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