Overview
Gelled Nails is a Spain-based eCommerce business specializing in salon-quality gel nails designed for home application. Established in 2022, the brand has demonstrated steady growth, generating an annual revenue of €300,000 and an annual profit of €120,000 with a 40% profit margin.
The business primarily operates in Spain and Portugal, with a growing market opportunity in Europe and the US. A significant selling point is its availability in El Corte Inglés, Spain’s largest department store.
The current owner spends six hours daily managing operations, including order fulfillment, customer service, marketing, and content creation. The business has a repeat customer rate of 24%, acquiring customers through Instagram, Facebook ads, and organic social media efforts on TikTok and Instagram.
The seller is motivated to exit due to personal reasons, specifically a desire to move countries and pursue new opportunities.
Key Insights
Website Performance & Metrics
Website Traffic: The website receives 17.8k monthly visitors.
Website Speed: No performance data was provided, but speed should be tested for optimization.
Product Variation & SKUs: The website offers a variety of nail-related products, with branding that aligns with a professional and premium aesthetic.
AOV & Customer Lifetime Value: The Average Order Value (AOV) is €53. CLV data was not provided.
Repeat Customer Rate: 24% repeat purchase rate, which is decent but indicates room for improvement in customer retention strategies.
Website Conversion Rate: No specific data was provided on conversion rates.
Website Design & Presentation: Professional-looking website with an appealing layout, but Trustpilot reviews (100% negative) raise concerns about credibility.
Brand Positioning & Customer Sentiment: The brand is positioned as an affordable, high-quality alternative to salon gel nails. However, customer feedback is inconsistent across platforms.
Marketing Efficiency: Heavy reliance on paid ads (Instagram & Facebook) suggests high Customer Acquisition Costs (CAC). Organic traffic is relatively low.
Product Offering & Marketing Potential: A strong niche with potential for repositioning, especially in expanding internationally and improving customer trust.
Financial Performance
Annual Revenue: €300,000
Annual Profit: €120,000
Profit Margin: 40%
Profit Multiple: 2.6x
Revenue Multiple: 1.1x
Monthly Revenue: €25,000
Monthly Profit: €10,000
Number of Customers: 46,771
Number of Orders: 6,230
Email List: 46,115
🔴 Red Flag: No Profit & Loss (P&L) statement is available, making it difficult to verify financial accuracy. This is a major issue that must be resolved before considering acquisition.
Marketing (Paid & Organic)
Social Media Presence:
Instagram: 20.5k followers (low engagement, likely inflated following).
Facebook: 10k followers.
TikTok: 50k+ followers.
Marketing Strategies:
Heavy dependence on Facebook & Instagram ads for customer acquisition.
Organic growth from TikTok & Instagram through influencer marketing and content creation.
Email marketing potential (large list of 46,115 subscribers).
🔴 Red Flag: Low engagement rate on social media suggests possible use of paid follower growth tactics or an audience that does not actively interact with the brand.
Operational Efficiency
Owner Involvement: The owner spends six hours daily managing order fulfillment, marketing, and customer service.
Fulfillment & Logistics: Orders are self-fulfilled, which is time-consuming. Outsourcing fulfillment (e.g., 3PL) could improve efficiency.
Scalability: Potential to expand into the US & broader EU markets. However, the business relies heavily on one fulfillment location (Spain), limiting scalability.
🔴 Red Flag: Shipping delays and customer complaints suggest operational inefficiencies.
Customer Data & Relationships
Email List: 46,115 subscribers (strong potential for email marketing & retargeting).
Customer Reviews:
Trustpilot: Only 3 reviews, all 1-star.
Website Reviews: Positive reviews exist but could be curated (lack of third-party verification).
Common Complaints:
Declining product quality.
Orders delayed for weeks without proactive communication.
Customer support unresponsive to refund requests.
🔴 Red Flag: The poor customer experience and inconsistent review credibility indicate possible retention challenges.
Legal & Compliance Due Diligence
Business Registered in: Spain.
Retail Presence: Sold in El Corte Inglés (adds legitimacy).
No Legal Issues Reported: However, poor customer service could lead to chargebacks or legal disputes over non-delivery.
Intellectual Property: Unclear if trademarks or patents exist for the brand.
Challenges Identified
No Profit & Loss (P&L) Statement – This is a significant issue; financial claims cannot be verified.
Trust Issues & Poor Customer Reviews – Low ratings on Trustpilot could damage credibility.
Operational Bottlenecks – Fulfillment is handled manually, affecting order processing speed.
High Reliance on Paid Ads – Customer acquisition depends heavily on Instagram & Facebook ads, making the business vulnerable to rising ad costs.
Low Social Media Engagement – 20.5k Instagram followers but low interaction suggests possible inorganic growth.
Scalability Limitations – The business is Spain-centric, making expansion to other markets challenging.
Product Quality Concerns – Customer reviews indicate declining product quality and delivery issues.
Recommendations
Pre-Acquisition Due Diligence:
✅ Request Full P&L Statement – Without financial transparency, it is not advisable to proceed.
✅ Verify Customer Retention & Churn Rates – Understand how many customers are repeat buyers.
✅ Analyze CAC & Ad Spend Trends – Heavy reliance on paid ads is a risk; need to evaluate cost efficiency.
✅ Assess Legal & IP Protections – Ensure trademarks and copyrights are in place.
✅ Check Refund & Chargeback Rates – High refund rates may indicate fundamental issues.
Post-Acquisition Growth Strategies:
🔹 Rebrand & Improve Customer Sentiment – Address negative reviews by enhancing product quality & customer support.
🔹 Outsource Fulfillment – A third-party logistics (3PL) provider can improve efficiency.
🔹 Reduce Paid Ad Dependency – Focus on SEO, email marketing, and influencer collaborations to lower CAC.
🔹 Expand to New Markets – The US and broader EU present growth opportunities.
🔹 Strengthen Social Media Strategy – Focus on authentic engagement rather than follower count.
Conclusion
Is Gelled Nails a Good Investment?
✅ Pros:
High profit margins (40%).
Large email list (46k subscribers) for retargeting.
Presence in El Corte Inglés, adding legitimacy.
Strong niche market with expansion potential.
🚩 Cons:
No P&L statement available (major red flag).
Poor customer reviews & operational inefficiencies.
High dependency on paid ads (scalability risk).
Manual fulfillment process limiting growth.
Final Verdict:
📌 Proceed with caution. The business has strong revenue and profit margins, but significant concerns around financial transparency, customer sentiment, and operational challenges must be addressed. Due diligence is necessary before making an offer.
💡 Next Steps:
Obtain financial records & P&L statements.
Investigate customer complaints & refund rates.
Assess advertising efficiency & scalability.
Verify legal & compliance aspects.
If these concerns are addressed, Gelled Nails could be a viable acquisition with strong restructuring potential.
Prepared by:
Dolapo Adedayo
Trendhijacking Team
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