Overview

Evercleaner is an Australian-based sustainable cleaning brand established in 2021. The business has carved a niche in the eco-friendly homecare market, boasting an 85% customer repeat rate and a growing subscription revenue stream. With a focus on eliminating single-use plastic, the company offers a range of cleaning products and has gained recognition through various industry awards. Its operations are supported by a 3PL warehouse in Melbourne and Chinese manufacturing partners. The brand is experiencing steady revenue, with annual earnings surpassing AUD 1 million and a profit margin of 18%.

Key Insights

Website Performance and Metrics

• The website, while functional, lacks strong branding cohesion.

• The product catalog consists of 15 SKUs, focusing on eco-friendly cleaning solutions.

• There is no significant third-party review presence on Google or Trustpilot.

• The eCommerce platform appears stable, utilizing an owned domain and direct-to-consumer model.

Financials

• Annual revenue: AUD 976,637 with an annual profit of AUD 175,540.

• Monthly revenue: AUD 81,386; monthly profit: AUD 14,628.

• Profit margin: 18%.

• High customer retention and subscription revenue (25%) provide stability.

• Profit multiple (2.0x) appears overvalued compared to industry norms, while the revenue multiple (0.4x) is reasonable.

• Retail presence in Harris Farm contributes AUD 2,000 monthly revenue, with potential for expansion.

Operational Efficiency

• The business is structured with outsourced production (3-4 suppliers in China) and fulfillment through a Melbourne-based 3PL provider.

• The company has transitioned from heavy reliance on paid advertising to organic marketing through social media, email, and SMS marketing.

• Customer service and order fulfillment appear streamlined with a low return rate (<2%).

Customer Data and Relationships

• Strong engagement with an 85% repeat customer rate, indicating high product satisfaction.

• Email list of 59,311 and SMS list of 22,760, providing significant retargeting potential.

• Over 1,300 product reviews with a 4.8-star rating.

• Recognized by Product Review Australia as a leading homecare brand.

Legal and Compliance Due Diligence

• Trademark registered in Australia.

• No available legal concerns or complaints from public sources.

• No reviews on Trustpilot or Google that would indicate widespread customer dissatisfaction.

Challenges Identified

Branding and Online Presence

• The website lacks strong branding, which could affect conversion rates and customer trust.

• No presence on Trustpilot or Google reviews, which may impact credibility.

Profit Multiple Overvaluation

• The 2.0x profit multiple is significantly higher than standard valuations in the industry.

Limited Retail Footprint

• The current retail presence (Harris Farm) contributes only a minor portion of revenue.

• Retail scalability remains unproven, despite existing packaging for retail expansion.

Product Diversification and Competition

• While customer demand for new products exists, execution requires additional investment.

• The market for sustainable cleaning products is increasingly competitive.

Recommendations

Branding and Online Reputation

• Improve website branding for a more professional and trustworthy appearance.

• Establish and manage reviews on platforms like Trustpilot and Google.

Financial Valuation Adjustment

• Negotiate a lower profit multiple to align with industry standards.

• Seek clarity on revenue and profit fluctuations over the past two months from the seller.

Retail and Growth Expansion

• Expand retail partnerships beyond Harris Farm to strengthen offline revenue streams.

• Consider entry into Amazon and international markets to scale operations.

Marketing Optimization

• Continue leveraging organic marketing but maintain paid ads to sustain customer acquisition.

• Develop influencer partnerships and SEO strategies for long-term brand positioning.

Conclusion

Evercleaner is a profitable and scalable business with a strong eco-conscious brand. The high customer retention and subscription revenue model provide stability, but the business's valuation appears overestimated. To maximize potential, branding improvements, expanded retail partnerships, and enhanced market positioning are necessary. While the opportunity is promising, further discussions with the seller are essential to validate financial consistency and understand the rationale behind the sale. Investors should approach the acquisition with negotiation flexibility and a clear growth strategy in place.