Executive summary / Overview

This is an Italy-based studio producing handcrafted LED wall art and limited-edition illuminated artworks. The business is young (~2 years), profitable, and has developed notable creative equity and B2B credibility (collaborations with brands like Shiseido and Audi). The Flippa listing shows transferable 12-month revenue of €221.6k (Shopify €197k + offline €24.5k), net operating margin ~24.5%, AOV ~€386, annual transferable revenue and profit figures consistent with the seller’s reported annual totals (€351,763 revenue / €87,235 profit). The brand has clear product differentiation and strong social proof through on-site reviews and external review sites.

Key insights (High-level)

• Strong unit economics: Product cost ~24% of revenue implies healthy gross margins before marketing/ops; net margin ~24.5% is excellent for a 2-year D2C product brand. (Flippa data)

• High AOV with limited purchase frequency: AOV ≈ €386 supports profitable paid acquisition even at mid-to-high CAC, but low order frequency (≈1 order/customer in last 12 months by available data) limits CLV today. (See “Customer data” section.) 

• Validated creative IP & B2B potential: Brand partnerships (Shiseido, Audi) and custom/contract work point to scalable B2B channels and licensing/collab upside. Strong reputation signals: High scores on on-site reviews (Judge.me) and Trustpilot listings indicate good product quality and customer satisfaction; this reduces post-purchase friction.

Detailed due diligence by area

1. Website performance & metrics

What we can confirm from public data

• Site is Shopify-based, modern product pages with before/after LED photos, certificate of authenticity messaging, clear collections and product pages. This supports premium positioning.

• Social and review integrations (Judge.me, Instagram) are active, which supports trust and conversion.

Missing / inconsistent items to verify with seller (critical):

• Website speed & Core Web Vitals: not measurable reliably from public listing text. We recommend that you run PageSpeed Insights / GTmetrix during technical DD.

• Sessions & conversion rate: Flippa notes a YoY +28% in sessions and +28% orders, but absolute session numbers are not listed publicly. Conversion rate is therefore unknown. Request Google Analytics (or Shopify Analytics) access for exact session → order conversion.

• Product SKUs & variation: public catalog shows several collections (Originals, home decor, posters, accessories) but seller should provide SKU list, SKUs per style, lead times and BOM.

• AOV & CLV / repeat rate: AOV ~€386 (provided). Using the provided figures: 509 orders in 12 months vs “number of customers” 5,356 (likely this is email list size, not unique buyers). Flippa and the sheet also state “over 500 artworks sold last year.” This suggests purchase frequency is very low (roughly 1.0x purchases/customer among buyers), i.e., CLV today ≈ AOV * (avg # purchases), so CLV ≈ €386 unless cross-sell/upsell increases repurchases. This low frequency constrains LTV/CAC economics unless product/collection strategy increases repeat buys.
  Action: obtain a list of unique customers, number of repeat purchasers, cohort LTVs and RFM segmentation to confirm. (We flagged a clear data inconsistency that must be reconciled.)

Preliminary conversion / CAC math (from available public numbers)

• Marketing spend (12 months): €38,933.84.

• Orders (12 months): 509.

• Implied marketing cost per order ≈ €76.5 (marketing ÷ orders). If nearly every order is a unique new customer, that gives CAC ≈ €76.5 vs AOV €386. This is healthy on face value (CAC < 20% of AOV) and supports profitable paid scaling. But conversion rate, paid/organic split of marketing spend, and actual CAC by channel must be validated. (Calculation based on Flippa data.)

Website design & brand presentation

• Premium, gallery/art-studio aesthetic, strong emphasis on “handmade in Italy,” limited editions, certificate of authenticity. All these are consistent with a premium positioning that supports high AOV. Visuals on product pages and social media show craft and lighting effect well.

Recommendations (Website):

• Get GA/Shopify analytics access (or exports). This includes sessions, conversion, device split, paid vs organic, top landing pages, and checkout funnel drop-off.

• Run PageSpeed/Core Web Vitals audit and fix any CLS/TTI issues to preserve conversion.

• Implement persistent cross-sell/upsell bundles (e.g., frame/installation, remotes, limited prints) and a subscription/membership for collectors to lift CLV.
  
  
  

Finances

Confirmed (seller / Flippa):

• Annual revenue (reported): €351,763; Annual profit €87,235 (≈25% margin). Transferable 12-month revenue shown on Flippa: €221,602.59 (this likely reflects 12 months Aug 2024–Jul 2025 and may exclude other prior months). Monthly revenue/profit table (Aug 2024–Jul 2025) averages €29,314 revenue / €7,270 profit (consistent with annual totals).

Seasonality & volatility

• Month-by-month revenue shows variability (low ~€20.5k in Mar 2025, peak ~€42.7k in Nov 2024). Standard deviation of monthly revenue ≈ €6.1k, indicating noticeable seasonality and variability. This is important for working capital planning. (We computed statistical summary from the provided monthly data.)

Margins & cost structure

• Product cost: 24.03% of revenue. Marketing: 17.56%. Transport: 8.24%. Personnel: 15.64%. Payment fees 6.36%. Rent 3.61%. Net operating margin ~24.5%. These line items reveal strong unit economics but meaningful fixed/people costs (personnel ~15.6%).

Valuation multiples

• Profit multiple: 1.9x (low/modest, reflecting young age and short track record). Revenue multiple: 0.5x (conservative vs category benchmarks, indicates upside if growth is proven).

Recommendations (Finance):

• Obtain 3 years (if available) of P&L, balance sheet, cash flow, and details of CAPEX/breakdowns of personnel and production costs. Validate the difference between reported “annual revenue €351k” and “transferable revenue €221k”. This must reconcile what’s included/excluded. Ask for merchant statements and bank statements for verification.
  
  
  

Marketing (Paid & Organic)

Current mix & performance (public info)

• Channels: Meta Ads (Facebook/Instagram), organic social (Instagram reels/posts), email, direct/WhatsApp offline sales. Flippa reports paid advertising as a key acquisition channel and suggests scaling paid ads is a primary growth lever. Social presence and content emphasizing handmade craft support organic discovery. 

Opportunities

• Scale paid efficiently: Given AOV and implied CAC ≈ €76.5, there is room to test broader prospecting if conversion and return on ad spend (ROAS) on current campaigns are healthy.

• SEO & content: Strengthen organic search with art/LED lighting/installation guides, curator features, and artist/collaborator stories, good long-term, lower-CAC channel. 

• B2B/Gallery/Wholesale: Monetize collaborations, gallery placements and hotel/restaurant installations (B2B can have higher order sizes and recurring contracts). Shiseido & Audi collabs demonstrate this is feasible.

• Email & VIP program: Email list (~5,242) and VIP club exist. Create segmented nurture, collector club, limited-edition drops to drive repeat purchases.

Risks/unknowns

• Need breakdown of marketing spend by channel and channel ROI. If marketing spend is concentrated and CAC for prospecting is much higher than implied average, scaling risk exists.

Recommendations (Marketing)

• Request ad account access (or ad spend + revenue by campaign) to calculate true CAC and profitable scale limits.

• Implement lookalike & retargeting funnels for high-AOV buyers, plus acquisition promotions targeted at interior designers / B2B.

• Create content marketing plan (SEO + long-form articles + video about LED tech/care/installation) to reduce dependency on paid ads.

Operational efficiency

What’s working

• Production fully in Italy (tight quality control), order processing + customer support reportedly 20–25 hours/week (owner + staff). Shipping promises strong EU delivery (24–48h) and global 3–5 days. This  implies reliable logistic partnerships.

Operational risks

• Single-location production creates supply concentration risk (factory downtime, labor issues).

• Manual production & bespoke items limit scale unless SOPs, partial automation, or additional skilled labor are added.

• Fulfillment & returns: Given artwork fragility and international shipping, claims/returns could meaningfully affect margins if volume grows; need historic returns/claims data.

Recommendations (Ops)

• Get BOM, lead times, supplier contracts and capacity constraints. Document standard operating procedures and time per unit. Validate packaging/insurance costs for scaling. Consider partial outsourcing or second site for volume growth while protecting “handmade” positioning.

Customer data & relationships

Public signals

• Review platforms show strong satisfaction (Judge.me 4.9/5 based on 91 reviews; Trustpilot presence with mostly positive reviews). Social proof supports premium pricing.

Concerns / items to verify

• Customer list accuracy: the Flippa sheet lists “Number of Customers: 5,356” and also “Number of orders: 509” — this is inconsistent (likely 5,356 = email list / subscribers). Need exported customer list showing unique customer IDs, number of repeat purchasers, email open rates, and unsubscribe rates.

• Repeat purchase rate / CLTV: appear low; confirm cohort analysis (30/60/90/365 day LTVs).

• B2B relationships & contracts: request copies of any B2B contracts, recurring orders, and details around custom signage pricing and margins.

Recommendations (Customer)

• Request raw customer data export and run cohort analysis; set up win-back flows, collector incentives, and a VIP program to increase purchase frequency and LTV.
  
  

Legal & Compliance Due Diligence

Public / flagged items

• The brand markets limited editions and certificates of authenticity; collaborations (Shiseido) suggest formal licensing deals were possible. Confirm all collaboration agreements and licensing rights.

Critical legal checks to request from seller

1. IP & licensing: copies of any licensing or collaboration agreements (Shiseido, Audi, or others). Confirm ability to use imagery (especially where classical artworks are reinterpreted to ensure no copyright infringement).

2. Product safety & electrical compliance: LED artworks contain electrical components. Request certificates (CE, RoHS, or other applicable safety certifications) and test reports for products sold in EU/US. Verify warranty/return policies.

3. Customer contracts & B2B agreements: copies of ongoing service contracts, custom signage agreements, and any non-compete/confidentiality agreements with artists or contractors.

4. Company structure & taxes: confirm entity structure, VAT registration, historical tax filings, and any contingent liabilities.

5. Insurance: confirm product liability and shipping insurance in place for international shipments.

Recommendations (Legal)

• In the legal DD stage, insist on reviewed copies of the documents above, and require indemnities for contingent IP liabilities or misrepresentations in the Flippa listing.
  
  
  

Challenges Identified (summary):

1. Data inconsistencies: key public numbers (orders vs customers) are inconsistent; must be reconciled before firm valuation.

2. Low repeat purchase frequency / CLV: current product mix yields limited repeat buys; CLV equals roughly single-purchase AOV unless cross-sell programs are introduced.

3. Scale constraints from handmade production: handcrafted nature limits throughput unless operational changes are introduced without diluting the brand.

4. Dependence on paid ads and small user funnel visibility: need granular ad ROAS/CAC data to safely scale.

5. Compliance & IP risk (potentially): using imagery or limited editions tied to known artworks requires clear licenses; electrical product compliance must be confirmed.

6. Young business/valuation conservatism: short operating history produces lower multiples; buyer must price in execution risk.

Recommendations (actionable & prioritized)

Due diligence requests to the seller (must-have before offer):

1. Google Analytics & Shopify access (read-only) for last 24 months: sessions, conversion rates, device split, channel performance.

2. Ad account access or ad spend + revenue by campaign.

3. Full customer export (unique customers, orders, emails, dates) and cohort LTV analysis.

4. Supplier contracts, BOMs, production capacity and lead times.

5. Copies of any licensing/collaboration agreements, IP assignments, trademarks, and product safety certificates (CE/RoHS/test certificates).

6. Bank & merchant statements and P&L backing the reported revenue/profit, plus recent tax filings.

Operational / growth initiatives post-acquisition (high ROI moves):

• Raise repurchase rate & CLV: collections drops, limited-edition series for collectors, VIP subscription (early access + discounts), curated bundles and installation services.

• B2B expansion: leverage existing brand work to win contracts with hotels, restaurants, interior designers, and corporate partners; offer higher-margin custom work and recurring contracts.

• Marketing optimization: test scaled prospecting on Meta with lookalikes of top customers, invest in SEO/content for evergreen traffic, and strengthen email automations and cart recovery flows.

• Operational scale plan: document SOPs and train additional craftsmen; test pilot outsourced production for non-signature elements (backing, LED assembly) while keeping finishing touches in Italy.

• Product line extension: smaller, lower-price LED decor items (accessories, small framed LED prints) to drive repeat purchases and broaden buyer base without diluting core premium pieces.

Valuation & Negotiation Notes:

• Current profit multiple (1.9x) and revenue multiple (0.5x) are conservative. A buyer can justify paying a premium if: (a) GA/Shopify data confirm stable organic demand and ability to scale paid profitably, (b) repeat purchase rates can be raised, and (c) IP/compliance documents are clean.

• Consider an earn-out or performance-based structure tied to revenue growth or margin improvement to bridge valuation gaps given the short track record.
  
  

Conclusion

This e-commerce business is a differentiated, high-AOV artisan brand with solid early profitability, strong creative equity and demonstrable B2B credibility. The core opportunity is to scale paid acquisition profitably, increase customer lifetime value via product and email programs, and expand B2B and licensing channels, all while protecting the brand’s “handmade in Italy” positioning. The principal risks are data inconsistencies in the public listing (must be reconciled), production scalability constraints, and the need to verify IP and electrical compliance documentation. With the recommended seller disclosures and targeted post-acquisition initiatives, the online business presents a compelling acquisition target for a buyer who can operationalize scale without eroding brand equity.