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Steve,Can I buy you a bottle of wine? You are phenomenal and the...

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30 Posts.

9

01/04/21

13:49

Post #: 52206328
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Originally posted by steve10: ↑

I have another company where the CEO was very surprised at how high the MC had gone & another company the CEO reached out to media mentioning the low MC.

$250M MC base must be on the money for DW8 now or about 15c SP. Anything above that would be the premium to buy shares & at today's
16c SP = 6.7% premium.

Have been thinking about the Ebay MOU. As others have mentioned sellers require permission from Ebay to list liquor products. Ebay is constantly expanding their marketplace & I have noticed the liquor section has been growing. It is currently not the No.1 e-commerce site for liquor but it appears they want to grow their market share by partnering with companies such as DW8. Dan Murphy's has an extensive range of products listed on Ebay.com.au & appear to be the dominant seller. DW8's thousands of sku's are like on boarding a major supplier to the Ebay platform. Just like DW8 has supplier on boarding metrics Ebay would be the same in an effort to make their marketplace No.1 for liquor as well as other product ranges. Ebay are selective in who they on board for liquor.

I quickly looked at all liquor completed/sold orders for the past week on Ebay.com.au. There were about 600 orders for the week = 2,600 pcm. When I had a look about 6 months ago it was only about 300 orders per week so they have doubled liquor sales in 6 months. Within 12 months at current growth rate Ebay.com.au should have about 10,000 orders pcm. DW8 should be able to capture about 10% market share given their thousands of sku's which will most likely be more than Dan Murphy's within 12 months. I have used sales orders as the metric because when ordering multiple items from the same supplier you receive shipping discounts. For example, Dan Murphy's shipping cost is $6.90 for 1 bottle of whiskey or 50 bottles of whisky. Shoppers prefer to buy from sellers with a huge range of sku's as they can combine the order into a single discounted shipping cost.

Back to the 10,000 orders pcm x 10% = 1,000 pcm x $10 handling/logistics/storage = $10k pcm x 12 = $120k pa revenue.
Then there will be 1,000 pcm x $100 GTV = $100k pcm x 5% skim numerous fees = $5k pcm x 12 = $60k pa revenue.
Total combined revenue from Ebay.com.au forecast at about $180k in 12 months. It is not very substantial, however, this is for a 12M Ebay buyer base.

DW8 is currently developing capability for international drop shipping. I checked out Dan Murphy's along with a few others on Ebay & they currently don't offer international shipping. Using the Ebay global partnership DW8 would have a buyer base of 185M. If we extrapolate the revenue forecast based on 12M Australian buyer's to 185M global buyers = x15.4 x $180k = about $2.8M pa.

I have purchased heaps of products from Ebay sellers in US, UK, NZ, Germany, Japan, Italy, China, France etc. There will be millions of buyers from countries all over the world browsing Ebay. They will see a unique wine or spirit rarely seen before & want a taste. It is as simple as clicking the button & waiting a few weeks for the order to arrive. DW8 will expose the thousand's of sku's in their product range to a massive buyer base. Freight cost for these orders will not be $10 & the bulk discount will be less. More likely $20-50 per bottle/case for shipping/duties into international markets. The above global revenue forecast will most likely be much higher.

Looking at the big picture DW8 currently has about $4M pa revenue run rate. The aim during the next 12 months will be to grow logistics to $12M + $2M via DTC channels such as Ebay, Vivino etc + $6M B2B fees = $20M pa revenue run rate or $5M per quarter. Possible some variations in breakdown of the revenue streams but overall going for $20M pa revenue run rate target in 12 months.

The 4,000 trade buyers via Bibendum + the anticipated additional trade/retail buyers with the $500k incentives will reduce getting to the marketplace tipping point by 6-12 months. It would cost millions in staff costs/marketing etc to achieve a similar level in 12 months without the incentives. The marketplace may be very close to tipping point when it launches.

DT mentions incremental rises in sales many times. Incremental was mentioned for logistics too & in just over 12 months DW8 is generating about $4M pa revenue run rate. Add another couple of revenue streams with one being B2B the main act & I think we can expect the massive growth to continue.

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Steve,

Can I buy you a bottle of wine? You are phenomenal and the constant research is second to none. Where are you based if you don't mind me asking?

DW8 Price at posting: 16.5¢ Sentiment: Buy Disclosure: Held
11 Upvote

0 Great analysis

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