Started with debt, now it earns 1 billion yuan a year in a niche market

A few days ago, the news that the founder of the once well-known domestic brand Hanhou sold his 70 million mansion to pay off debts became a hot topic on Weibo, attracting a number of viewers to lament that "it is becoming more and more difficult for businesses to survive."

On the other hand, in this year's cross-border e-commerce circle, there are also many sellers in debt. In a recent interview with Yien.com, the protagonist Siye has been in the cross-border circle for 10 years. He went from " making money lying down" to mortgaging his house to save his company this year . This is exactly the same as the founder of Hanhou who sold his house to save his company.

Some people say that the era of making money easily through cross-border business has long passed, and "as long as you don't lose money this year, you are a winner." In the past, En.com always shared the experience cases of domestic brand sellers who successfully went global. Today, I want to talk about an American brand in a niche market that went from starting a business with debt to having annual revenue of over 100 million US dollars.

It became profitable within one year after starting a business with debt , and has now become a leading brand

As the leading brand of motorcycle accessories and equipment in the United States today, RevZilla has gone through a long period of dark days.

In 2007, RevZilla was born in a small apartment in the Old City of Philadelphia, USA , with only three employees : Anthony Bucci, Matthew Kull and Nick Auger .

As it was difficult to find the motorcycle equipment and accessories he liked on the market and the quality was always not up to standard, veteran motorcycle enthusiast Bucci decided to create his own brand.

So, with his experience in e-commerce, he brought together Nick and Matt, who had web development skills, and the founder of a motorcycle equipment and accessories retail brand website that has since become popular in North America was formed.

Although they are ambitious, the reality is that they do not have sufficient financial support.

The three of them maxed out their credit cards and could not raise $30,000, putting their startup capital at risk. Fortunately, with sufficient understanding of the market and the founders’ respective responsibilities and proper cooperation, RevZilla became profitable after only one year of entrepreneurship.

According to foreign media reports, RevZilla's sales reached 1.8 million US dollars in its first year , and it has since quickly entered a rapid growth state .

In its fourth year of establishment ( 2010 ) , RevZilla 's annual revenue exceeded US $10 million, and a year later ( 2011 ) this figure doubled to US$20 million .

With money, RevZilla has not only expanded its team size ( currently about 450 employees ) , but also moved its headquarters to a larger location. In 2019 , RevZilla went from a debt-ridden startup to an online sales volume of $175 million by focusing on niche markets .

Today, RevZilla has become the largest online retail brand of motorcycle clothing, parts and accessories in the United States, with a product warehouse area of ​​65,000 square feet (about 6,039 square meters) .

As can be seen on its independent website page, the brand’s product matrix is ​​very rich, including motorcycle riding apparel, riding shoes and boots, gloves, riding goggles, helmets, riding mobile phone holders, tires, motorcycle repair tools and accessories, etc.

The average monthly visits to the independent website are nearly 5.5 million, ranking TOP1 in the category in the United States

By searching on North American e-commerce platforms such as Amazon and Walmart, Een.com found that RevZilla does not seem to be sold on third-party e-commerce platforms.

From this point of view, for online channels, RevZilla only relies on its self-built website revzilla.com , so how does its independent website perform?

Similarweb data shows that revzilla.com ranks first in the United States in the field of vehicles > motorcycles .

In November, revzilla.com had a total of 4.9 million visits , with an average browsing time of 3 minutes and 43 seconds .

In the past three months ( September-November), the total number of visits to revzilla.com has declined, which should be related to the winter season. Although it has declined, it has maintained an extremely high level in the industry in the past three months, with an average monthly visit of 5.4667 million .

Looking at the independent website traffic of the top five motorcycle brand websites in North America:

The average number of visits to harley-davidson.com , which ranked second, exceeded that of revzilla.com , reaching 5.53 million;

Cycletrader.com ranked third , with an average of 4.1 million visits in the past three months , which dropped to only 3.6 million visits in November;

Cyclegear.com , which ranks fourth , has an average of only 1.87 million visits in the past three months ;

The fifth-ranked advrider.com had an average of only 2.63 million visits in the past three months.

The above brands were all established earlier than revzilla.com . Correspondingly, HARLEY DAVIDSON was established the earliest, and was launched in 1903, 104 years older than RevZilla ; Cycle Tracker was established in 1991, CYCLE   GEAR was founded in 1974 and Adventure Rider was founded in 2001.

RevZilla can be said to be a latecomer that has surpassed the competition. Its “one-stop shopping” also makes consumers more loyal to the brand and the website.

Google search trend data shows that the popularity of searches for RevZilla has soared by 3,800% in recent times .

In the past five years, the search popularity of RevZilla has remained high, especially at the beginning of summer every year when the temperature rises and consumers' demand for outdoor cycling increases . The popularity of RevZilla has also maintained its peak value for a long time.

Revzilla is not only an online channel, but also has physical stores, intending to allow consumers to experience the products in stores and improve the consumer experience. Today, Revzilla is undoubtedly the top player in the North American motorcycle field. This year, Revzilla also became the title sponsor of the AMA ( American Motorcycle Association ) National Adventure Riding Series.

The monthly sales of a single product exceeded 10,000, and there were 100,000 listings on sale on the Amazon site

In Europe and the United States, the demand for motorcycle riding has always been high, which has also driven the continuous growth of the market size of related products.

Transparency Market Research data report pointed out that the global motorcycle accessories market size reached US$9.2 billion in 2022 and is expected to reach US$12 billion by 2031 , with a compound annual growth rate of 2.9%. There are more optimistic data than this report, indicating that by 2032, the global motorcycle accessories market size will reach US$15 billion.

eBay related information shows that on its platform, the annual sales of auto and motorcycle parts are over 10 billion US dollars, and 30% of eBay buyers have purchased auto and motorcycle parts products.

On Amazon, a search for "Motorcycle Accessories" shows that there are 100,000 listings for sale , including cycling clothing, helmets, motorcycle repair tools, etc. Some products can easily achieve monthly sales of 4,000 units.

A search for "motorcycle equipment" shows 40,000 listings for sale, most of which are cycling apparel products, such as windproof headgear, cycling goggles, cycling clothing, etc. For a certain cycling windproof headgear, the listing shows that as of press time, it has 30,797 reviews and its sales in November exceeded 10,000 units .

Compared with brand websites, the average order value of such products on Amazon is lower. For consumers who are not so obsessed with brands, products on third-party platforms are obviously more attractive in terms of price.

So what advantages do Chinese sellers have in entering this market? Advantages of the industrial supply chain.

Data shows that China's auto parts industry is concentrated in Zhejiang, with Ruian being called the " Auto Parts Capital of China ". In 2002 alone , there were 1,208 auto parts manufacturers in Ruian , with an output value of 8 billion yuan . By 2015, there were 2,500 auto parts manufacturers in Wenzhou , where Ruian is located, with a total output value of 60 billion yuan and an export delivery value of 727 million US dollars.

With close cooperation between upstream and downstream, this complete industrial chain can also bring more market competitive advantages to relevant overseas sellers.

Liabilities

Niche