Executive Overview

This is a ~2-year-old DTC barefoot-shoe brand focused on the European / DACH market. Seller-reported trailing metrics: Revenue €2,190,525; Net Profit €471,275 (≈22% margin). Business model uses a mostly automated dropship / supplier-backed fulfillment with inventory held in EU warehouses (declared inventory €100k–€150k). Seller includes ~128k+ email subscribers, trademark, social + ad accounts, and supplier relationships.

Key headline metrics provided:

• Annual revenue (TTM): €2.19M

• Annual profit (TTM): €471k (22% margin)

• CAC: €35

• AOV: €70

• LTV: €85

• Repeat rate: 20%

• Sales channels: ~85% Shopify, 15% Amazon

• Profit multiple (listing): 0.8x; Revenue multiple: 0.2x

Initial read: brand has credible unit economics (AOV / CAC / LTV) and a healthy margin. The business is positioned well for geographic scaling in Europe and product-line extension. However, lower multiples and limited operating history (2 years) imply the buyer should probe for concentration risks, data quality (email & ad performance), and the sustainability of margins under scaled ad spend.

Website Performance & Product Metrics

What we can infer from the provided data:

• Product market fit: Barefoot shoes are a defensible niche in Europe; The brand’s proposition (comfort + modern design at an accessible price) aligns with market trends.

• Channel mix: Heavy Shopify presence suggests control over customer data and lower fees vs marketplaces; Amazon contributes diversified revenue.

• Fulfillment approach: Stock in EU warehouses + dropship relationships allow fast shipping and reduced friction for EU customers. This supports higher conversion and repeat purchases.

Metrics provided (useful):

• AOV = €70

• LTV = €85 → LTV / CAC = 85 / 35 ≈ 2.43 (a workable ratio; the business recoups acquisition cost and produces some margin but has limited LTV upside unless retention improves)

• Repeat rate = 20% (solid for apparel, but leaves room to raise LTV)

Missing/critical metrics to request

These are required to validate traffic → revenue mechanics and to model scale:

• Website conversion rate (sessions → orders) and traffic trends (organic vs paid).

• Website speed / Core Web Vitals (desktop & mobile).

• SKU count and product variation matrix (how many SKUs, top sellers, SKU-level margins).

• Cohort LTV by acquisition channel (email vs paid social vs organic).

• Repeat purchase frequency and time-to-second-purchase.

• Refund/return rates by SKU (critical for footwear).

• Channel-level CAC & ROAS (Google, Meta, TikTok, Amazon ad specifics).

• Email engagement metrics (deliverability, open/click rates, active subscribers vs total).

Immediate verification asks

1. GA4 + Shopify (or platform) access for the last 12–24 months.

2. SKU-level P&L and inventory aging report.

3. Export of email segments showing the last 90/180-day engagement.

4. Recent Core Web Vitals / Lighthouse report.

Financials

Provided financials (Monthly snapshot)

Monthly revenue/profit figures show a reasonably steady revenue run-rate (monthly revenue average ~€182k; monthly profit ~€39k), with peaks and troughs consistent with product/tactical campaigns:

• Oct 2024 → Sep 2025 monthly revenue ranges ~€82.9k → €325.4k.

• Profitability stayed positive each month (no negative months in the supplied window), demonstrating operational control and robust gross margins.

Key financial observations

• Profit margin ~22%: Healthy for apparel DTC, indicates decent gross margin and controlled marketing/fulfillment costs.

• Stable profitability: Unlike some DTC peers, the business didn’t show negative months in this window. This reduces cashflow risk.

• Multiples low (0.8x profit, 0.2x revenue): Conservative valuation. This could be driven by short operating history (2 years), concentration, or the seller’s desire for a quick exit.

Financial gaps to clarify

• Detailed expense breakdown: ad spend vs fulfillment vs fixed overhead. Need to confirm what drives the 22% margin and whether that margin is sustainable as you scale paid channels.

• Cashflow & bank statements for the last 12–24 months to validate revenue recognition.

• Inventory write-downs or return reserves. Footwear can have higher return rates; ensure returns are reflected and reserves are adequate.

Marketing (Paid & Organic)

Positives

• CAC (€35) vs AOV (€70): payback period is short; CPC-driven channels can be profitable if ROAS remains stable.

• LTV/CAC ~2.4: Positive but marginal for aggressive scaling. Improving retention can materially increase allowable CAC and growth runway.

• Channel diversification: Shopify + Amazon reduces marketplace risk. Seller notes Meta & Google focus, which is typical and scalable.

Risks & unknowns

• ROAS by channel unknown: we must see channel-level ROAS to understand which channels are truly profitable at scale.

• Creative dependency: if growth is driven by a few viral creatives or influencers, performance could drop if creatives are turned off.

• Email list quality: 128k+ list is promising, but open/click rates and recent sends determine how valuable that channel truly is.

Growth levers

• Retention programs: increase repeat purchases (LTV) via subscription, loyalty, bundles, and size/fit follow-ups.

• International expansion beyond DACH into Nordics & Benelux as the seller suggests (low-hanging if logistics are already EU-based).

• Product line extension: premium lines, seasonal footwear, or sport-specific barefoot models to raise AOV and margin.

• Performance creatives & UGC scaling: harness influencer partnerships and UGC to lower CAC on social platforms.

Operational Efficiency & Supply Chain

Strengths

• Automated operations with lean weekly hours (8–12) suggest strong processes and supplier automation.

• EU warehouse presence supports fast delivery and better customer experience across the target market. This reduces returns due to long shipping times and sizing issues.

Risks/checks

• Supplier concentration: need confirmation of the number of suppliers and single-supplier dependency.

• Fulfillment SLAs & returns handling: important for footwear due to fit/size returns.

• Inventory valuation: €100k–€150k declared; need SKU-level aging to ensure not overcapitalized on slow SKUs.

Operational asks

• Supplier contracts, MOQs, lead times, and penalty/termination clauses.

• Fulfillment agreements and returns workflow.

• SOPs for customer support and quality control.

Customer Data & Relationships

What’s promising

• 128k+ email list and 20% repeat rate are good signals of customer interest and a base for cheaper reactivation campaigns.

• Product market fit in a health/wellness vertical with positive future TAM (total addressable market) in Europe.

What to verify

• Email engagement: active vs dormant segments.

• Customer concentration: % revenue from repeat customers and top X% of customers.
  Reviews & sentiment: Trustpilot and onsite reviews should be checked for fit, quality complaints, and delivery issues.

Legal & Compliance Due Diligence

Key Focus Areas:

• IP and trademarks: seller claims trademark/patent for the [brandname]. Get trademark registration, transferability, and scope.

• Data protection (GDPR): ensure collection & processing of EU personal data meet GDPR requirements (particularly email marketing, cookies, and retention).

• Supplier contracts and liability: ensure suppliers permit production by a new owner and check product safety compliance, CE marks (if applicable), and consumer protections in EU countries.

• Tax & VAT: confirm tax registration in relevant jurisdictions and VAT handling for EU fulfillment. Hong Kong business location complicates cross-jurisdiction tax considerations (obtain tax history and VAT filings).

Challenges & Red Flags

1. Short operating history (2 years): While growth is impressive, it limits historical resilience evidence.

2. Multiples materially low: could indicate buyer leverage or underlying issues (concentration, documentation, or transient growth).

3. LTV limited: LTV (€85) only 1.21× AOV and LTV/CAC ~2.4. This is reasonable, but not a high moat; retention improvements are required.

4. Returns risk for footwear: Footwear categories often have elevated return rates; ensure reserves and net margins account for this.

5. Incomplete public data: Lacking channel-level ROAS, conversion rates, and SKU-level margins increases acquisition risk.

6. Cross-border complexity: Hong Kong business + EU stock needs careful tax and legal review.

Recommendations & Next Steps:

Immediate (required before LOI / offer)

1. Request a complete data room:

   • 24 months P&L, bank statements, and ad invoices.
     Shopify / platform export: orders, returns, SKU margins, AOV, LTV cohorts.

   • GA4 / Search Console access or exports.

   • Ad account access or top-line ad reports showing spend, revenue, and ROAS by channel.

   • Email platform export with engagement segments and last campaign performance.

   • Inventory aging and supplier contracts.

   • Trademark documentation, incorporation papers, VAT/tax filings.

2. Validate email list & deliverability. Run a sample reactivation campaign or request masked engagement data.

3. Channel stress test: test reduced/increased ad spend on top channels with control groups to verify CAC scalability.

4. Returns & quality audit: request returns by SKU and customer complaint logs.

Commercial/go-to-market

5. Retention playbook: prioritize subscription or VIP programs, post-purchase flows, and size/fit guidance to increase repurchase rates.

6. Product roadmap: evaluate launching a premium line and seasonal drops to lift AOV and margin.

7. International roll-out: prioritize Nordics/Benelux given EU logistics already in place.

Deal structure suggestions

• Conservative upfront with earn-out tied to verified revenue/EBITDA milestones (6–12 months).

• Escrow/holdback of 10–20% for 6–12 months to cover indemnities and chargebacks.

• Seller representations & warranties on IP, supplier relationships, and financials, backed by escrow/clawbacks.

Conclusion

Summary view: This e-commerce business presents as a strong, acquisition-grade DTC brand in a growing European niche with healthy margins and reasonable unit economics. The core metrics (CAC, AOV, LTV, repeat rate) suggest a viable, scalable business model, but the short operating history and some missing verification documents create acquisition risk.

Recommended stance: Proceed to a thorough data-room review and validation. If the seller’s documents confirm the metrics and there are no material liabilities, this is a buy-to-scale opportunity. Structure the deal conservatively (lower upfront, earn-out and escrow) until revenue, margins, and operational assertions are independently validated.