And are they officially sanctioned distributors for these big name brands they sell?
Online Video Surveillance Store For Sale
Published Feb 04, 2015 05:00 AM
Want to own a 5+ year old online video surveillance store?
The owner of one contacted us, letting us know it was for sale. Thinking that members might find their business details interesting and perhaps someone might want to buy, we are sharing the details inside.
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Comments (14)
Luis Carmona
Feb 04, 2015JH
John Honovich
Feb 04, 2015Yes, that's what they said. Obviously, the VideoIQ reference is no longer valid, since the acquisition. Again, verify if interested with copies of current dealer agreements.
MB
Matt Bode
Feb 04, 2015What would the Shark Tank guys do? "Hi; my name is Jeff and I am seeking $100k for a 100% stake in my high tech business."
Brian Rhodes
Feb 04, 2015JH
John Honovich
Feb 04, 2015"Year over year, revenue is down 50%"
.... and for that reason, I am out.
This is more of a fixer upper.
CD
Chris Dearing
Feb 05, 2015Not expecting you to necessarily know John, but wondering out loud
Do they own inventory, or is everything pass-thru?
Sample product:
JH
John Honovich
Feb 05, 2015Their response: "Not much inventory or demo gear worth talking about or including."
UD
Undisclosed Distributor #1
Feb 05, 2015The reason the owner wants to bail is probably because it has become increasingly difficult, if not impossilble, for small online resellers of security products to compete with the major online resellers who have enormous purchasing power and have the scale and efficiency to operate on narrow margins. There are certainly not 25-30% gross margins available to this type of operation. I take onboard that this company may provide specialized knowledge that is not available from the large online resellers but the market is very limited for those who are prepared to pay a big premium for this.
JH
John Honovich
Feb 05, 2015Good points. I certainly can see the difficulty.
Btw, the gross margins are possible so long as they are willing to trade higher margins for (potentially much) lower total revenue. But the metapoint remains, if one wants more market share / revenue, prices will have to be cut, impacting margins.
There are easily hundreds of these small online surveillance stores. I wonder how many of them are in a similar shape / situation as this one.
UD
Undisclosed Distributor #1
Feb 05, 2015I reckon 10-15% margins are more realistic if they are buing well. But with no employees, operating costs are next to nothing net of owners compensation. With sales averaging less than $1000 a day there is not much time/work involved so this can be a nice side gig for someone to make a little extra cash...but impossible to grow. It is the small online resellers that have 3+ employees that have the real problem.
JS
Jeff Sandine
Feb 05, 2015Margins are in the 25-30% range due to the nature of our business which is about 50% custom build complete systems, which can include solar electric power, cellular or wireless communications, motion sensors, audio, etc.
U
Undisclosed #2
Feb 12, 2015CN
Curtis Nikel
Feb 12, 2015In any business there is margin where there is mystery.
JP
Josh Penfold
Feb 16, 2015For security parts, getting anything over 10% right now would be tough. I own a Ecommerce company, and we transitioned away from alot of these items as its a commodity now. We stick with a few brands that fit our projects that we build, thats about it
I know small stores that mark the products 2-3% above cost since they have little overhead. Online sales is tricky to run, and unless you really know the products, and are experts at Google PPC and SEO then its almost impossible to make any decent amount of sales. In order to be sustainable you have to be in the $1 million to 1.5 million range for 1-3 FTE. For additional employees you have to hit $750k in sales per FTE to expand.