don’t get left behind. business opportunity left-handed people are an often forgotten population....
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SOUTH PAW PRODUCTS
Don’t Get Left Behind
Business Opportunity
Left-handed people are an often forgotten population.
Most of the time, they must learn to adapt to right-handed products in their daily lives.
7-10% of population and growing
Unique Value Proposition
Online retailer selling products geared to the left-handed individual.
Aggregate all of the existing left-handed products already on the market.
Work with manufacturers to provide exclusive solutions to products not currently addressed by competitors.
In addition to website, become an Amazon.com merchant.
Examples of Exclusive Products
Smart phone apps that reverse the orientation of swipe to unlock.
Wrist watches with buttons arranged on opposite side.
Witty t-shirts about left-handed life
Target Market
Any individual that is left-handed Any individual that cares about someone
that is left-handed. Includes babies all the way up to people
looking for caskets with hinges on the opposite side.
Production & Distribution
Suppliers will be:Manufacturers already in the business of
creating left-handed productsManufacturers of right-handed products to
create the left-handed counterparts. Sales will be:
Via South Paw’s websiteVia Amazon.com
Economic Model-Revenue Drivers and Profit Margins
All major revenues will come from salesCapitalize on niche market and making them feel
special SPP will be a conglomerate seller
Just like zappos.com does not make shoes, but sells them online
SPP will try to make exclusive contracts with vendorsBoth parties benefit – vendors sell their excess left-
handed items; SPP purchases at a discount
Economic Model-Fixed and Variable Costs
Majority of all costs will be variableShipping, COGS, taxes all dependent on product/sale
Staffing costs will be minimalPartners will each do their share of business at no cost
Largest non-website fixed expense will be storageEstimated no more than $100 month
Other possible non-website fixed expensesAdministrative Expenses: ~$200Anything else?
Economic Model-Start-Up Costs: Non-Website
Start-Up Costs are anticipated to be fairly low compared to most retail businesses as there is no physical retail location
Partners will use personal computers and cell phones for coordination
Non Web-site Start Up ExpensesMarket Research Study = $1000Storage Solution = $100/mo + $100 depositAdministrative Set-Up = $500
Economic Model-Start-Up Costs: Website
Economic Model-Breakeven Analysis: Fixed Costs
To breakeven for the first year, using the estimates for a small online store of less than 100 SKUs:
Fixed Costs = $6900Website Costs - $2800Market Research - $1000Storage (full year) - $1300Admin Costs (full year) - $1800
An exact number of sales is difficult to calculate as each product sold will have a different contribution margin (examples on the next slide)
Economic Model-Breakeven Analysis: Example Products
Left Handed Kids’ Safety Scissors
Sales Price (includes ‘free shipping’ to customer) $6.99
Our Cost including shipping, fees, processing -$2.90
Shipping Cost -$1.95
Processing Fees -$0.21
Contribution Margin =$1.93
Adult Fiskers Brand 8” All-Purpose Scissors
Sales Price (Fiskars’s MSRP of $13.15) $14.99
Our Cost including shipping, fees, processing -$6.10
Shipping Cost -$1.95
Processing Fees -$0.60
Contribution Margin =$6.34
Once a full line of products is established, an estimate of demand for each product can be generated. The Market Research that would be conducted prior to launch would allow South Paw Products to more clearly define a breakeven point, but without that research, any product demand would just be a guess.
Economic Model-Profit Durability
Limited entry barriersOpening an online store is a well defined
Minimal lead timeTailoring web store shell should take less than 3mosLimited product quantities to start require less than 1
moMost lead time needed for market research
Demand will only increase over timeMarket is far from saturatedAs more “South Paws” learn about store, orders will
increase
Marketing Strategy
AdvertisingGoogle search resultsAmazon search resultsBranded apparel worn by customers
PromotionPrice-match against right-handed equivalent
product for first 12 months.$50 credit for any request that results in a
product.
Pricing
Medium to low cost retailer Pricing will average between 10 to 25%
over cost for each product. A more precise pricing model will be
determined after further market research on a product by product basis.
Startup Needs
Startup Costs People, Talent, Skills
Website - $60,000 Warehouse - $45,000/yr Inventory - $10,000 Insurance - $2000/yr
Web Designer (outsourced)
Inventory manager Accountant (outsourced) Customer Service Rep.
Set Apart From the Competition
Providing innovative left-handed products that are not currently available from other left-handed retailers
Take product requests from customersR&D department to make these a reality
Partnering with existing manufacturers to produce left-handed versions of productsEx. Left-handed Fossil wrist watch
Market Trends
The majority of initial sales would come from those with a selective demand (repeat sales) for these types of products
South Paw seeks to attract a larger number of customers through primary demand. Initially these sales will be low
After recognition of unique product, primary demand sales will increase
Market Segmentation 1 segments is the repeat purchaser of left-
handed goods; this customer is left-handed and uses left-handed products that must be replaced on a regular basis
Another segment is the left-handed customer who purchases goods infrequently; this customer typically puts up with right-handed goods most of the time but will occasionally make a purchase to add some innovative left-handed solutions to augment his quality of life
Market Segmentation Cont.
South Paw is confident in its ability to take these infrequent buyers market share away from other retailers through dynamic marketing & unique products
Friends, family member, or significant other of a left-handed person. This segment of the market is looking to buy a product that expresses the uniqueness of the individual receiving the product
Market Segmentation Cont. By offering different types of products
that no other left-handed product offers, South Paw is confident in its ability to garner a significant portion of gift purchases
The quality and unique products will ensure these customers return to make these type of purchases
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