Last edited the 25th of May 2023

We want to sell towels?

JC approached me regarding the purchase of an Amazon + Walmart online only business which sold towels roughly the 10th of May. We were in Guatemala at the time. I was very skeptical at first given the little differentiation you seem to be able to get in that category - I was wrong. The differentiation seems to be done in the quality of the towel as well as in the colors offered.

The business has existed since roughly 2015/2016 but has only really taken off in the past 24 - 36 months. The takeoff was due in part to COVID but also due to investments in marketing.

Our fears

In terms of revenues, the target company is about 40% of the company we are currently operating and will be in part financing the deal. That means that there is a non-zero chance that our main company will end up paying for this purchase for a few years if things don't go as planned.

The only manufacturer of this company is in Pakistan. We have never bought product from Pakistan in the past, I don't know the culture of that country either. That is one of the main reasons why I traveled to Pakistan from the 28th of May to the 31st of May.

Towels is a huge category with a lot of aggressive players who know what they are doing. This feels like a risk but might be more of an opportunity in practice.