Acquisitions in the e-commerce space present unique challenges, especially when crossing international borders.
When OffChance recently completed its first acquisition of Supercrush, the journey revealed valuable insights about managing six-figure deals, international logistics, and the complexities of cross-border business operations.
Table of Contents
The Deal Overview
This deal happened a little under 2 months ago, and I’m excited to share that OffChance has made its first acquisition: Supercrush, a Canadian e-commerce brand in the beauty and hair care/accessories space!
Here are some of the insights from the deal.
Complexities and Costs
With a six-figure deal, we had to balance thorough due diligence with keeping legal costs reasonable. Initially, we aimed for perfection, which pushed legal fees into the five-figure range—a cost that didn’t make sense for this deal.
We shifted our focus to essentials in the contract and handled most of the due diligence ourselves, which kept costs in check and allowed us to move forward efficiently.
Inventory Transfer Challenges
Moving inventory across borders was more challenging than expected. Customs clearance delays and coordinating shipping schedules added complexity.
This taught us to build in more flexibility and have stronger contingency plans. Next time, tighter coordination with logistics partners will be key.
Understanding the Market
With 80% of Supercrush’s customers in Canada, we prioritized maintaining their experience but underestimated the costs.
Shipping, duties, and broker fees were more than expected. We learned the importance of understanding local logistics and negotiating better rates upfront.
External Factors
The Canada Post strike and potential tariffs hit us harder than expected, causing shipping delays and increased costs.
The ongoing strike has impacted our holiday sales, with Canadian customers unable to receive their packages. This affects not just us but businesses across Canada during this crucial season.
Our products are manufactured in Canada, and while we planned to continue R&D there, potential tariffs have us considering a move to US production for sustainability.
Timing and Execution
We aimed to close by September to capitalize on the holiday season. Delays set us back, and we had to scramble to get things in place just as the holidays began.
The intensity made it harder to solidify team roles, but we learned a lot and feel confident in our path forward.
Conclusion
The acquisition of Supercrush represents more than just OffChance’s first deal—it’s a masterclass in navigating the complexities of cross-border e-commerce acquisitions.
From managing legal costs effectively to dealing with unexpected external factors like postal strikes and potential tariffs, each challenge provided valuable learning opportunities.
Despite the lessons and challenges, we’d do this deal 10 out of 10 times.
We’re excited to grow Supercrush further and take it to the next level. The previous owners built a great foundation, and we’re ready to build on that. I’ll be sharing more about this journey here!
If you’re in the US (sorry Canada! It’s not our fault!) and need some Christmas gifts, check out supercrush.com and make bad hair days a thing of the past!