- VoLcAn BrAnds Investigation-
Volcan Brands aims to become a leading Digital Brand Aggregator and Integration Fund in the high-growth e-Commerce space by acquiring and transforming profitable businesses with proven product-market fit and clear optimization potential.
Retail is the sale of goods and services to consumers for personal use. In other words, it is the final step in the distribution chain, where products are sold directly to the end users. Retailers purchase goods in bulk from wholesalers or manufacturers and then sell them in smaller quantities to consumers. They play a crucial role in the economy by providing consumers with access to a wide variety of goods and services.
Retailers can be classified into different types based on their size, product offerings, and distribution channels. Here are some common types of retailers:
Traditional brick-and-mortar stores: These are physical stores that consumers can visit to purchase goods. They include department stores, grocery stores, clothing stores, and electronics stores.
E-commerce retailers: These businesses sell goods and services online through websites or mobile apps. They offer a convenient and accessible way for consumers to shop from anywhere in the world.
Direct-to-consumer (DTC) retailers: These businesses sell their products directly to consumers without using intermediaries like wholesalers or retailers. They often use their own websites or social media platforms to reach their customers.
Franchised retailers: These businesses operate under a specific brand name and are granted the right to use the brand's logo, products, and business model. They are typically smaller than corporate-owned stores.
The retail industry is constantly evolving, driven by technological advancements, changing consumer preferences, and new market opportunities. Retailers are adapting by embracing e-commerce, personalization, and omnichannel experiences to meet the evolving needs of their customers.
key trends shaping the retail industry:
E-commerce growth: Online shopping is becoming increasingly popular, and e-commerce sales are expected to continue to grow in the coming years.
Omnichannel retailing: Consumers are demanding seamless experiences across all channels, including physical stores, e-commerce, and mobile apps. Retailers are investing in technology to create a unified shopping experience.
Personalization: Retailers are using data analytics and customer insights to personalize their offerings and marketing campaigns. This is helping them to connect with customers on a more meaningful level.
Sustainability: Consumers are increasingly concerned about the environmental impact of their purchases. Retailers are responding by adopting sustainable practices and promoting eco-friendly products.
The future of retail is bright, as the industry continues to innovate and adapt to meet the evolving needs of consumers. Retailers that can effectively leverage technology, personalize experiences, and embrace sustainability will be well-positioned to succeed in the years to come.
An eCommerce aggregator, also known as a roll-up or house of brands, is a company that acquires third-party (3P) Amazon-focused brands, consolidates their operations, and implements strategies to scale them and increase their profitability. These companies typically focus on small to medium-sized businesses (SMBs) that have established a strong presence on Amazon but lack the resources or expertise to reach their full potential.
Benefits of using Volcan Brands:
Increased brand value: By consolidating multiple brands under a single umbrella, VB can leverage its economies of scale to improve marketing, distribution, supply chain efficiency and to get better deals on products and shipping. This can save Amazon-native brands a lot of money, which they can then reinvest in their businesses. This can lead to increased brand awareness, better customer acquisition, and higher customer lifetime value.
Improved operational efficiency: VB has expertise in various aspects of eCommerce operations, such as marketing, logistics, and customer service. By centralizing these functions, VB can streamline operations, reduce costs, and improve overall efficiency. VB also provides Amazon-native brands with a variety of services, such as warehousing, fulfillment, and customer support. This can free up Amazon-native brands to focus on other aspects of their businesses, such as product development and marketing.
Technology: VB provides Amazon-native brands with access to a suite of proprietary technology tools that can help them manage their businesses more effectively. This includes tools for inventory management, marketing, and customer service.
Channel expansion: VB can help Amazon-native brands expand their reach by selling their products on other channels, such as brick-and-mortar stores and online marketplaces. This can help Amazon-native brands reach a wider audience and increase their sales.
Product expansion: VB can also help Amazon-native brands develop new products. This can help Amazon-native brands stay ahead of the competition and meet the needs of their customers. VB has access to significant funding and resources, which can be used to invest in brand growth, product development, and marketing initiatives. This can help SMBs overcome financial constraints and accelerate their growth.
Types of eCommerce aggregators:
Vertical aggregators: Focus on acquiring brands within a specific product category, such as beauty, home goods, or electronics.
Horizontal aggregators: Acquire brands across a variety of product categories.
Geographic aggregators: Focus on acquiring brands located in a specific region, such as Europe or North America.
How eCommerce aggregators make money:
Revenue sharing: Aggregators typically structure deals with SMBs based on a revenue-sharing model. This means that they receive a percentage of the revenue generated by the acquired brands.
Cost savings: Aggregators can achieve cost savings by consolidating operations, negotiating better deals with suppliers, and optimizing marketing campaigns.
Multiple exits: Aggregators may exit their investments through a variety of methods, such as an initial public offering (IPO), a sale to a strategic buyer, or a return to investors.
The future of eCommerce aggregators:
The eCommerce aggregator model is still in its early stages, but it is expected to grow rapidly in the coming years. This is due to several factors, including the increasing popularity of online shopping, the growing number of SMBs selling on Amazon, and the availability of capital from investors.
Overall, eCommerce aggregators play a valuable role in the eCommerce ecosystem by helping SMBs grow and scale their businesses. By providing access to capital, resources, and expertise, aggregators are enabling SMBs to compete more effectively with larger retailers and reach their full potential.
Volcan Brands: A Market Leader in the E-Commerce Space
E-commerce Space, also known as electronic commerce or e-tail, is the buying and selling of goods or services over the internet. It has revolutionized the way we shop, giving us access to a wider range of products and services than ever before.
Types of E-commerce
Business-to-consumer (B2C): This is the most common type of e-commerce, where businesses sell products or services to consumers. Examples of B2C e-commerce businesses include Amazon, Apple, and Walmart.
Business-to-business (B2B): This is where businesses sell products or services to other businesses. Examples of B2B e-commerce businesses include Alibaba, Cisco, and Dell.
Consumer-to-consumer (C2C): This is where consumers sell products or services to other consumers. Examples of C2C e-commerce businesses include eBay, Craigslist, and Facebook Marketplace.
There are many benefits to e-commerce, both for consumers and businesses.
Benefits for consumers
Convenience: Consumers can shop from the comfort of their own homes, 24 hours a day, 7 days a week.
Wider selection: Consumers have access to a wider selection of products and services than they would find in a traditional store.
Lower prices: E-commerce businesses often have lower overhead costs than traditional businesses, which can lead to lower prices for consumers.
Easier comparisons: Consumers can easily compare prices and products from different retailers.
More information: Consumers can access more information about products, such as reviews and specifications.
Benefits for businesses
Reduced costs: E-commerce businesses can save money on rent, utilities, and payroll.
Increased reach: E-commerce businesses can reach a wider audience than traditional businesses.
Improved customer service: E-commerce businesses can collect data on customer behavior and use that data to improve customer service.
24/7 sales: E-commerce businesses can sell products or services 24 hours a day, 7 days a week.
Reduced reliance on physical stores: E-commerce businesses can reduce their reliance on physical stores, which can save money and make them more flexible.
The Future of E-commerce
E-commerce is a rapidly growing industry, and it is expected to continue to grow in the years to come. This growth is being driven by several factors, including the increasing popularity of mobile devices, the rise of social media, and the growing adoption of e-commerce by businesses of all sizes.
As e-commerce continues to grow, we can expect to see even more innovation and disruption in the industry. This includes the development of new technologies, such as virtual reality and augmented reality, which will change the way we shop online. It also includes the rise of new business models, such as subscription services and same-day delivery, which will make shopping online even more convenient and appealing.
E-commerce is a powerful force that is transforming the way we shop and do business. It is an industry that is full of potential, and it is sure to continue to grow and evolve in the years to come.
VOLCAN BRANDS Threefold Mission:
Acquire profitable properties with proven product-market fit and clear optimization potential in underserved verticals
Transform and optimize acquired businesses through strategic interventions and operational excellence to drive significant value creation.
Scale the portfolio of businesses to achieve economies of scale and boost value multiples.
Key Strategies:
Volcan Brands is a company that acquires and grows existing profitable businesses with minimum revenues of $1.2M and 20% EBITDA. The company is focused on the US market with global expansion plans for the acquired brands. Volcan Brands is building a team of experienced operators with a proven track record of ecommerce business transformation. The company is also leveraging technology since day one to ensure success and scalability.
Their vision is to build a global, profitable company by rolling up and scaling Amazon FBA businesses, capitalizing on the massive growth in the e-commerce sector and the abundance of EBITDA-positive "mom&pop" businesses with revenue ranging from €0.6M to €10M.
Implement a data-driven approach to identify and evaluate acquisition targets.
Utilize a proven value creation playbook to transform and optimize acquired businesses.
Volcan Brands targets underserved verticals in the e-commerce market, seeking opportunities with a minimum $3.5M gross profit potential within 2-3 years. Their focus is on digital-first products, avoiding electronics and seeking a strong Amazon sales presence. They prefer products with a high number of reviews to enhance defensibility and avoid seasonality, aiming for low SKU density for easier management.
The company's acquisition process involves an initial outbound phase followed by an inbound approach. They reach out to prospects, conduct initial assessments, and make offers based on preliminary agreements. Due diligence is then performed to confirm all relevant data and finalize the purchase.
Volcan Brands has demonstrated their expertise in transforming acquired businesses, showcasing a 51% increase in units ordered and a 6% weighted average conversion rate increase for one of their acquisitions. This success was achieved through a comprehensive product strategy, effective management of COGS (cost of goods sold), channel costs, and OPEX, and a focus on the top 10 products driving 80% of sales.
The e-commerce industry is a rapidly growing market, and Volcan Brands is well-positioned to capitalize on this growth. The company is seeking limited partners to become a leading Digital Brand Aggregator and Integration Fund in the e-commerce space.
What Volcan Brands Looks For in Acquisitions
Profitable properties with proven product-market fit in underserved verticals
At least 2.7x value-creation and transformation potential through brand and operations transformation
Avoid complex after-sales (e.g. fashion & electronics). “Low-hanging fruit”
Comparatively easy transformation and growth journey
Lower uncertainty/risk: increase 35% within six months (SKU rationalization). High-value creation potential
How Volcan Brands Creates Value
Volcan Brands creates value by acquiring and growing businesses in the following ways:
M&A: Volcan Brands acquires profitable businesses with proven product-market fit.
Transformation: Volcan Brands transforms these businesses by improving their operations, marketing, and branding.
Scale: Volcan Brands scales these businesses by expanding their reach and increasing their sales.
The Future of Volcan Brands
Volcan Brands is well-positioned for future growth. The company has a strong track record, an experienced team, and a robust pipeline of acquisitions. The company is also focused on a rapidly growing market with a large number of potential opportunities
Investment Highlights:
Invest in profitable businesses with proven product-market fit within a high-growth sector (34% CAGR)
Benefit from a value-creation engine driven by an experienced team with a proven track record of e-commerce business transformation
Gain exposure to existing traction with 1st acquisition closed in July 2023 on a 2.15x EBITDA multiple and an M&A pipeline of 36 profitable properties in diversified and underserved verticals
Highlights:
Volcan Brands is aiming to become a market leader in the e-commerce space by acquiring and growing profitable businesses with a minimum of $1.2M in revenue and 20% EBITDA.
The company has a three-part investment strategy: Acquire, Transform & Optimize, and Scale.
Volcan Brands is seeking limited partners to become a leading Digital Brand Aggregator and Integration Fund in the high-growth e-Commerce space.
The company has a strong track record of success, including acquiring $1.3M of seller sales revenue in Q2'23 at a 2.15x multiple.
Volcan Brands is building a global, profitable company from day one by rolling up and scaling Amazon FBA businesses.
key points:
Volcan Brands is focused on acquiring profitable businesses with proven product-market fit and strong customer-engagement characteristics.
The company is seeking opportunities that can generate a minimum $3.5m Gross Profit in 2-3 years.
Volcan Brands has developed a proprietary scraper to identify the leaders in a subcategory.
The company has a proven track record of value creation, having achieved a 150% increase in value out of 65 properties during the past 4 years.
Volcan Brands is building a team of experienced operators with a focus on digital first products and a low SKU density.
key reasons to invest in Volcan Brands:
Proven track record of success: Volcan Brands has a proven track record of success in acquiring and transforming profitable e-commerce businesses. In the past four years, the company has achieved a 150% increase in the value of its portfolio companies.
Focus on underserved verticals: Volcan Brands focuses on acquiring businesses in underserved verticals, where there is significant growth potential. This strategy allows the company to capitalize on emerging trends and avoid competition from more established players.
Tech-enabled approach: Volcan Brands uses technology to identify and acquire promising businesses, as well as to optimize operations and drive growth. This tech-enabled approach gives the company a competitive edge in the e-commerce space.
Experienced team: Volcan Brands has a team of experienced professionals with a deep understanding of the e-commerce industry. This team is well-positioned to execute the company's growth strategy.
Strong acquisition pipeline: Volcan Brands has a strong pipeline of potential acquisitions, which provides the company with opportunities to continue to grow its portfolio.
In addition to these key reasons, Volcan Brands also benefits from the following:
High-growth sector: The e-commerce industry is expected to grow at a CAGR of 34% over the next five years. This growth will provide Volcan Brands with a tailwind for its business.
Geographic focus on the US: Volcan Brands is focused on the US market, which is the largest e-commerce market in the world. This focus gives the company a strong foundation for growth.
Low-risk acquisition strategy: Volcan Brands acquires businesses with proven product-market fit and strong customer engagement characteristics. This strategy helps to mitigate risk and ensure that the company acquires businesses with the potential for long-term success.
CONTACT VOLCAN BRANDS
If you are interested in learning more about Volcan Brands, please contact the company today.
www.volcanbrands.com
Overall, Volcan Brands is a well-positioned company with a strong track record of success. The company's focus on underserved verticals, its tech-enabled approach, and its experienced team make it a compelling investment opportunity.
UNDERSTANDING THE "JOURNEY"
VOLCAN BRANDS Working capital (VBWC) is a crucial financial metric that measures Volcan Brand's ability to meet its short-term obligations and fund its day-to-day operations. It represents the difference between a company's current assets, which are resources that can be converted into cash within one year, and its current liabilities, which are debts that must be paid within the same timeframe. VBWC is the lifeblood of a business. It ensures that a company has enough cash on hand to cover its immediate expenses, such as salaries, inventory purchases, and rent payments. Adequate working capital enables a business to function smoothly, invest in growth opportunities, and avoid financial distress.
VBWC = Current Assets - Current Liabilities
VB Current Assets: Cash: Coins, currency, and bank deposits + Accounts Receivable: Money owed by customers for goods or services sold + Inventory: Raw materials, work-in-progress, and finished goods
VB Current Liabilities: Accounts Payable: Debts owed to suppliers for goods or services purchased + Accrued Expenses: Expenses incurred but not yet paid, such as salaries and utilities + Short-Term Debt: Loans or borrowings due within one year
Importance of VBWC
Liquidity: Adequate VBWC ensures that a company has sufficient cash to meet its immediate obligations, preventing liquidity issues that could hinder operations.
Efficiency: Efficient working capital management optimizes the conversion of assets into cash, minimizing the time it takes to collect receivables and manage inventory.
Growth: VBWC provides the financial resources necessary for a company to expand its operations, invest in new opportunities, and capitalize on growth prospects.
Financial Health: VBWC is a key indicator of the company's overall financial health. Positive VBWC indicates that a company is well-positioned to manage its short-term obligations and pursue growth strategies.
WHAT CAN WE DO?
Collect Accounts Receivable Promptly: Implementing effective credit policies, automating invoicing, and offering early payment discounts can accelerate the collection of receivables.
Optimize Inventory Levels: Employ inventory management techniques, such as just-in-time inventory systems, to reduce excess inventory and minimize carrying costs.
Negotiate Payment Terms: Negotiate favorable payment terms with suppliers to extend the time to pay for goods or services, improving cash flow.
Monitor Working Capital Regularly: Regularly assess working capital performance and identify areas for improvement through financial analysis and benchmarking.
Massive TAM via Amazon marketplace
TAM stands for Total Addressable Market. It is a measure of the total revenue potential for a product or service. In this case, the "Massive TAM via Amazon marketplace" refers to the enormous potential for Amazon FBA sellers to reach a large number of customers and generate sales through the Amazon marketplace. The Amazon marketplace is one of the largest and most popular online shopping destinations in the world, with over 200 million active customers. This means that Amazon FBA sellers have a vast audience of potential buyers at their fingertips.
Direct alignment with Amazon’s long-term priorities
Amazon's long-term priorities include growing its marketplace, expanding its fulfillment network, and providing a superior customer experience. Amazon FBA is directly aligned with these priorities, as it helps Amazon to achieve all of them. By investing in FBA seller success, Amazon is making it easier for sellers to reach customers, fulfill orders, and provide a great customer experience. This, in turn, helps Amazon to grow its marketplace, expand its fulfillment network, and attract more customers.
Amazon invests heavily in FBA seller success
Amazon invests heavily in FBA seller success because it recognizes the value that FBA brings to its marketplace. Amazon provides a variety of resources and tools to help FBA sellers succeed, including training, marketing support, and customer support. Amazon also invests in technology that helps FBA sellers to manage their businesses more efficiently.
Amazon's investment in FBA seller success is a key driver of growth for both Amazon and its FBA sellers.
WHAT KIND OF CORPORATE STRUCTURE IS VB? FINANCIAL FUND MANAGEMENT COMPANY? WHAT ANNUAL + SUCCESSFUL FEES??? FUNCIONA COMO SL SPAIN - US/UK
WHAT IS THE PRODUCT OR SERVICE THAT VB IS AIMING FOR?? WHAT IS THE END-GAME??? VB HOLDING SOLD OUT WHO IS THE PRODUCT OR BRAND GOING TO BE PLACED ON (OUTBOUND)? DEPENDENTLY
AMZ ECOSYSTEM + SHOPIFY + E-COMMERCE RETAIL CHANNELS - THIRD PARTY SERVICES??? WHAT FEES??? LOGISTICS??? UPGRADE TO AN ALTERNATIVE OPTION TO IMPROVE POTENTIAL MARGINS
CASH CONVERSION??? WORKING CAPITAL?? HOW DO YOU CONVERT YOUR CASH FLOW? HOW HEAVY IS THE INVENTORY? NUMBER OF INVENTORY DAYS? HOW CAN WE OPTIMIZE THE INVENTORY? PAYMENT TIMES TO THE SUPPLIER AND THE CUSTOMER (AMZ)???
TAXES (IMPUESTO DE SOCIEDADES) ? TODAS LAS VENTAS SE GENERAN FUERA DE ESPANA CAPEX? P&L SKU PxQ (REVENUES) + margen bruto de sku (margen revenue-COGS) EVITDA/MARGEN BRUTO - TAXES (SPAIN) - WORKING CAPITAL (INVENTORY DONDE FABRICAN/DONDE LO HACEN/LOGISTICA AMZ O ELLOS/), SUPPLIERS, CUSTOMERS DINAMICAS) - INVERSION (DEBERIA DE SER 0) - PAGO DEUDA ((DEBT REPAIMENT) ES IGUAL A CASH CONVERSION
WHAT KIND OF DD (SPECIFIC DD JUST FOR ASSETS)??? ELABORATE
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