Overview

Cristian Moretti is a U.S.-based branded fashion e-commerce store operating on a dropshipping model. Established 1.7 years ago, the business has generated over $1M in revenue, with a reported net profit of $166K. It operates primarily through Facebook Ads, leveraging a private fulfillment agent in China for sourcing and logistics. The business boasts a structured operational system, a customer base of 45,459, and a 12% returning customer rate. The seller is divesting due to a shift in focus toward a new passion project.

Key Insights

• Website Performance & Metrics: The website appears professionally branded, offering a variety of fashion products. It has a customer email list of over 45,000 and 38,000 active email subscribers. However, Trustpilot reviews indicate major concerns, with an average rating of 1 star from 28 reviews.

• Financial Performance: The business reports an annual revenue of $952,817 and an annual profit of $144,730. However, financial trends indicate a significant revenue spike in December, followed by instability and decline in subsequent months. This raises concerns about seasonality or unsustainable marketing efforts.

• Operational Efficiency: The fulfillment process relies on a private agent in China, ensuring better control over inventory and branding elements such as customized packaging. The seller holds stock for one best-selling product but mainly operates on a just-in-time inventory model, reducing capital tie-up.

• Customer Data & Relationships: The business has acquired 45,459 customers with 20,194 orders placed. Despite a structured email and SMS marketing system, customer satisfaction appears to be an issue given poor Trustpilot ratings, which suggest potential fulfillment delays or product quality concerns.

• Legal & Compliance Due Diligence: No legal disputes or compliance violations are indicated in the available data. However, further inquiry into chargeback rates, refund policies, and any potential regulatory concerns with international fulfillment is necessary.

Challenges Identified

• Negative Customer Feedback: The Trustpilot rating (1 star from 28 reviews) suggests severe dissatisfaction, likely due to product quality, shipping delays, or customer service inefficiencies.

• Revenue & Profit Volatility: The financial data indicates a strong performance in December but fluctuating sales before and after, signaling potential seasonality or an over-reliance on aggressive advertising.

• Sustainability of Advertising Model: The business is highly dependent on Facebook Ads, which can lead to unpredictable ad costs and declining profitability if ad performance weakens.

• Dropshipping Risks: Dependence on a private fulfillment agent in China may pose supply chain vulnerabilities, particularly with shipping times and quality control.

• Limited Organic Growth: Despite a large customer base, there is little evidence of strong brand loyalty or organic traffic growth outside paid advertising efforts.

Recommendation

• Investigate Customer Concerns: Further analysis is needed into customer complaints, particularly on Trustpilot, to determine the root causes of dissatisfaction.

• Request Recent Financial Data: Obtain revenue and profit figures for the last two months to assess whether the business’s decline has stabilized or continued downward.

• Diversify Marketing Efforts: Explore alternative marketing strategies such as influencer collaborations and organic SEO to reduce reliance on paid ads.

• Assess Chargeback & Refund Rates: Determine how frequently customers request refunds or dispute charges, which may indicate deeper operational issues.

• Speak with the Seller: Clarify reasons for selling and gain insights into customer acquisition strategies, marketing performance, and future business potential.

Conclusion

Cristian Moretti presents an intriguing investment opportunity, particularly given its revenue scale, branding, and existing customer base. However, substantial risks exist due to negative customer feedback, financial instability, and over-reliance on paid ads. Without addressing these concerns, long-term sustainability remains questionable. Further due diligence is required to assess whether the business’s challenges can be mitigated effectively before proceeding with an acquisition.