Thinking of Buying a Baby Shop Business in Australia? Here Are 3 Vital Questions to Ask

The Australian online baby product sales industry is valued at $1.58 billion in 2025, employing over 3,200 people across 2,751 enterprises.

Profit margins average 2.8%, with total profits of $44 million.

Revenue is projected to grow at an annualised 2.9% through 2030, reaching $1.7 billion, supported by rising birth rates, consumer demand for premium baby products, and growth in eco-friendly alternatives.

However, intense competition from supermarkets and department stores, price-based rivalry, and cost-of-living pressures are key risks that must be carefully assessed before investing.

1. Is the Business Financially Sustainable and Profitable?

Why It Matters:

Baby shop businesses rely on consistent sales of high-demand essentials like nappies, formula, and clothing.

While nappies generate the largest share of online revenue (35%), margins are often low. Higher profitability usually comes from premium items such as branded clothing, eco-friendly products, and furniture.

What to Check:

• Revenue mix and profit margins – Review whether the business is overly reliant on low-margin staples or has diversified into premium products.

• Supplier agreements and costs – Check if the business benefits from bulk-buying discounts or faces rising import costs due to currency fluctuations.

• Customer base stability – Assess whether revenue is driven by recurring subscription models, memberships, or once-off purchases.

• Operational efficiency – Consider fulfilment speed, inventory management, and logistics partnerships that impact costs and profitability.

2. How Competitive is the Business’s Market Position?

Why It Matters:

The baby products sector is highly competitive, with supermarkets like Woolworths and Coles holding significant online market share (26.1% combined).

Independent retailers must differentiate through niche offerings, superior customer service, or eco-friendly and sustainable product lines.

What to Check:

• Market positioning – Determine if the business competes on price, brand exclusivity, or sustainability.

• Digital infrastructure – Review website performance, mobile app integration, and customer experience.

• Loyalty and retention strategies – Look at whether the business offers subscription nappies, rewards programs, or exclusive deals.

• Competitive landscape – Identify nearby competitors, online-only rivals, and franchise operations that may impact demand.

3. Is the Business Aligned with Industry Trends and Future Growth?

Why It Matters:

Consumer preferences are shifting towards eco-friendly, ethically sourced, and premium products.

Businesses that adapt to these trends and leverage digital marketing and subscription models are better placed for long-term success.

What to Check:

• Sustainability and ethical sourcing – Confirm if the business stocks biodegradable nappies, organic skincare, and natural baby food.

• Technology adoption – Assess use of customer data analytics, inventory tracking, and mobile-first shopping.

• Revenue diversification – Look for opportunities in subscription deliveries, bundled product packs, or niche premium categories.

• Demographic alignment – Ensure the target customer base aligns with rising demand from working mothers and older demographics purchasing gifts.

Ready to Invest in a Thriving Baby Shop Business?

With growing demand for convenience, premium baby products, and eco-friendly alternatives, the Australian baby shop industry presents strong long-term opportunities.

However, profitability depends on sound financial management, competitive positioning, and alignment with industry trends in sustainability and digital retail.

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