For small convenience stores, the share of purchasing and assortment management costs ranges from 4% to 6% in revenue, which eats up a substantial share of profits with a gross margin of 30%.
Our client succeeded in solving this problem by implementing saas-service, working as an online food store for professional market participants capable of delivering no later than the next day, while ensuring that the cost is significantly lower than the cost of ordinary distributors. This was made possible by the replacement of sales representatives eating up 10-15% in revenue on the IT system, which has an operating cost close to zero.
Business: $10M revenue per year, close to zero profit before marketing expenses. More than 2000 regular customers make at least one order per month.
Deal: $5M cash-in for a 5-fold expansion of the range.
Deal Industry: Internet, Retail
Deal Type: Venture investment