Executive Summary
This business plan outlines the Project of creating a multi-brand retail online store that will sell products of the light industry in the dropshipping system. Enterprises in China and Turkey carry out retail and small wholesale trade and work on a system of dropshipping to foreign markets. As the range of goods increases, the geography of the online store will also expand. The ultimate goal is to enter the markets of as many countries as possible.
Dropshipping, or drop shipping contract, is one of the business models, the essence of which is that the intermediary does not have stocks of goods in the warehouse but buys them from the manufacturer when he receives an order for it and is paid by the buyer. Either they transfer the order to the wholesaler and then send it themselves, or the order is sent immediately by the manufacturer, while a commission is charged. This framework of organizing the work of an online store is suitable for starting a business in trade, does not require large investments, and also allows testing the market and products. The work of the online store will be adjusted at all stages of work, which will make it possible to declare itself as a high-level service. This will be confirmed by:
- a convenient and understandable interface of the site;
- the ability to filter products by various parameters;
- permanent organization of actions;
- interactive support for website visitors and customers;
- informative and high-quality content and photos;
- provision of guarantees, demonstration of quality certificates;
- prompt delivery.
The target audience of the Project is a population of 23-50 years old, with an average income level. As a rule, these are the people who spend a lot of time on the Internet, are not afraid to take risks and test new services and sites, and for whom the brand is not important for making purchasing decisions. Service customers can afford to wait for a package for several weeks. The core of the target audience will comprise active young people who own pets and are ready to spend money on better items and accessories for them.
The online store will sell light industry goods of the middle price category, produced at factories in Turkey and China using the dropshipping system. Initially, the assortment of goods will consist of Products for cats, Products for dogs, Protection against fleas and ticks, Products for aquarists, Products for rodents and ferrets, Products for turtles and reptiles, Products for birds, Choice of food by breed, Choice of food by disease. Ultimately, the range of products of the online store will also see women’s, men’s, and children’s clothing; later, women’s, men’s, and children’s shoes, accessories, and toys, as well as interior items, dishes and much more will be added. Each category will include a wide range of products, classified by type, name, size, color, and material from which it is made.
Mission Statement
With love for the little friends – We care about the full life of pets, so that their life is healthy, long, joyful and harmonious. It is our duty to create the best deal by supporting you and your pets.
Marketing Strategy
The main goal of marketing is to successfully promote products on the market and maximize profit, while a wide variety of tools can be used to achieve it. Therefore, the correct definition of marketing goals will allow the company to achieve success much faster and with less financial costs.
Market goals: to identify promising niches in the product sales market and to gain a significant share of the existing market. To do this, it is necessary to study the most purchased products and develop a strategy for product entry to the market.
Marketing objectives: to create a favorable company image, plan and justify the growth of sales, develop a system of motivation for buyers, ease of use of the site (it is possible to develop a mobile application), think over a system of logistics, delivery and return of goods in order to gain an edge in the competition.
Marketing tools: as the planned business is based in the digital space, online channels of customer acquisition will be engaged. First of all, today’s social media hold an immense marketing potential in terms of the outreach. The number of users of different networks remains on a stable increase, which makes it possible to present the new product to an extended audience. Digital social media marketing will be at the core of the promotional strategy. Targeted advertisements will be purchased and presented in thematic communities attended by per owners with Facebook and Instagram as the key platforms. Next, it will be possible to extend the promotion reach through the use of Google Ads so that relevant entries appear for the queries related to pet accessories and goods. It appears appropriate to concretize these targeted advertisements with specific offers from the dropshipping shop. In other words, instead of a general company-related banner, potential customers will see actual products at compelling prices. Naturally, the best-value offers will be selected for the campaign.
Through this system, the core of the customer base will be formed across the first months of operation. Next, by the end of year one, it is expected to focus on retaining the existing clients, while acquiring a solid referral share. In the first case, those who have already made a purchase will have an option to subscribe to the company’s newsletter and other updates regarding the selection of products. Furthermore, they will have access to exclusive sale offers that will keep these customers engaged with the shop across a prolonged period. The referral system will include considerable discounts for purchases and delivery. Each user of the shop will have a personal promotional code that can be shared with new clients. In exchange, both the sender and the recipient of the code will receive considerable bonuses. Finally, the electronic word of mouth will help the company grow. The expected customer gain is 100% for year two and 50% for year three.
Startup Costs
The relatively low startup costs of dropshipping reflect one of the key advantages of this business model. First of all, the logistics of this plan appear easier than most standard stores. In the case of a dropshipping business, the store will serve as the intermediary between the supplier and the customer. However, to enhance the recognition of the new business and build a foundation of the customer base, a storefront appears necessary for the first phase of the project. For this purpose, a small office will be rented in one of the densely populated areas of the city. The increased pedestrian and vehicle traffic will align with a clearly visible brand sign, creating the awareness of the business. At this store, a small storage unit will be included, as well as a front-office to meet the clients and complete their deliveries in person, providing consultations, if necessary.
From one perspective, this business model eliminates the requirement for complex logistics.. Therefore, most of the costs will be related to the marketing procedures that will seek to accumulate a strong customer base. From a theoretical perspective, this business can be launched with $0 as expenditures. Nevertheless, without any investments, the project is likely to remain out of the audience’s sight. The first months will be crucial in terms of encompassing a wider audience of the Internet users through social media. Considering the ambitious marketing goals that target a quick growth of the customer base, the startup costs are expected to amount to $1,000. Next, the list of the required equipment for the office includes two mid-tier computers, storage boxes, and furniture. In order to help with the initial workload, an assistant will be hired so that I do not have to cover all the shifts at the front-office. This way, the workload will spread more evenly, allowing the owner to dedicate sufficient time to the development of the business. Finally, a marketing agency will be hired to build a strong brand image and create prompts for the promotional campaign.
Financials
Table 1. Three-year proforma income statement
Conclusion
The planned project has the potential to generate a sufficient level of income, while providing a considerable margin of safety. It can be classified as profitable and effective, with an average level of risk, but subject to the correct adjustment of the work of all components, profitable for investments. The proposed business plan is characterized by a relatively low entry threshold, with the plausible profit gain across 2-3 years. This way, the investments are utilized with the maximum efficiency, whereas major risks are alleviated.