Mission
To create the world’s largest online distributor of specialty products
Vision
To inspire an organization where it’s planning, facility and technical infrastructure
is dedicated to exceeding the expectations of our customers, associates and
stakeholders.
To engage our customers through a network of over 100 specialty sites, online
media avenues, and emerging platforms to deliver superior information and product
knowledge, using our strategic advantages to bring the utmost in customer satisfaction
and ordering accuracy.
To delight our associates with a culture that inspires innovation and creativity.
Where the sharing of personal insight and ideas are valued and where goals are well
planned, communicated precisely and easily understood. In an organization that
rewards both personal achievement and collaboration.
Executive Summary
The mission of Web Direct Brands, Inc. is to become the world’s largest online
distributor of specialty products. It has developed a proven, reproducible strategic
business model which has made the company a leader in selling online specialty
products on the internet to online consumers, including business to business. The
company is seeking interim financial backing to facilitate its growth and to position itself
for profitable investor exit.
The online industry is far outpacing traditional brick and mortar sales with an
average of 26.4% growth and is forecasted to continue for the foreseeable future. Huge
retailers recognize this growth and are funneling efforts to increase their online sales,
but they have missed the mark regarding specialty items. Specialty items are where
Web Direct Brands, Inc. has proven its ability to not just compete, but to dominate the
market.
Web Direct Brands, Inc. has chosen to focus on the development and growth of
specialty online stores by providing consumers with information about product lines that
are not readily available through traditional sales models. Using efficiencies that are
inherent only in web based marketing; Web Direct Brands, Inc. develops websites that
are regarded as the “best on the web” in their respective product line. Web Direct
Brands, Inc. brings specialty websites to a higher level by providing consumers seeking
information about purchasing specialty products, a place that they can educate
themselves about items of interest. The company’s track record provides the best proof
of Web Direct Brands, Inc. success in captivating online consumers. The information
provided in each of the specialty sites provides specific, compelling information
addressing the benefits of their specialty products as well as branded information about
the product lines and the competitive advantages offered by Web Direct Brands, Inc.’s
specialty stores.
The management of Web Direct Brands, Inc. scours the world in search of
specialty products, assessing their potential for online sales. When the management
determines that the specialty products meet their criteria, they assess product
availability, consumers’ needs and level of competition on the web. Websites are
created only if it can be established that the specialty product offers a clear competitive
advantage, a differentiation advantage over other online retailers and is not reproducible
within a mega site business model. Typically, the competitive advantage is information
and/or services that competitors cannot produce within structure of their website due to
restrictions in their IT infrastructure or business rules. The majority of direct competitors
are individual business owners with websites that lack the knowledge, or unable to
make the investment required to successfully compete in e-commerce. One of Web
Direct Brands, Inc.’s competitive advantages is that after they have established website
dominance in a specialty product line, the barrier for entry by a new or existing
competitor is extremely difficult and very costly. Most “would-be” competitors move on
to another product line that meets their level of IT capabilities.
After Web Direct Brands, Inc. develops and builds the framework of its websites,
they begin the development of its marketing campaign by focusing on the branding of
the website and its products. In many cases, Web Direct Brands, Inc. will initiate a
sourcing project that will identify or develop products with pricing or feature advantages.
Once products are located, they will be added to the website to enhance site
profitability, sales volume and further raise barriers against competitor entry into the
niche market. Web Direct Brands, Inc. has a comprehensive sourcing program used to
identify and procure products worldwide. With this “Direct from manufacturer - Direct to
consumer” approach, many of the Web Direct Brands, Inc.’s sites are able to achieve
significantly higher gross margins and provide additional opportunities for business to
business sales.
Web Direct Brands, Inc. has in place leadership that keeps the company focused
on its goals. The company is led by a disciplined and talented founding president who
has not only grown the business from a startup company, but also has successfully lead
previous businesses in franchising and business liquidations. Additionally the company
has hired proven talented individuals in key accounting, operational, purchasing,
marketing and IT positions. As the company progresses towards their goal they will be
adding additional talent for their COO and CFO positions with public company
operational experience.
Early on, the founders of Web Direct Brands, Inc. recognized the potential of their
venture. From the beginning they have crafted a business infrastructure that precisely
fits their unique business model. It is evident when you walk into their unique custom
built facility. It is a facility unlike any other, built specifically for the business model,
focused on the internal human assets of the venture so they can more effectively focus
on the needs of our customers. The facility has lush green internal vegetation, a coffee
shop and fitness center. This facility was built to have an efficient and effective flow of
products and is a reflection of the winning business philosophy that the founders have
created.
It is the goal of Web Direct Brands, Inc. is to grow the company to a minimum of
$20Million in sales by the end of 2015 with a 17.5% net profit and to be in the position
for investors to exit or to more easily increase their participation. This investment will
allow Web Direct Brands, Inc. to increase niche product lines and market penetration
and to enhance its distribution by locating distribution centers in Nevada and eventually
Ohio areas to reduce the cost of shipping and transit times.
Web Direct Brands, Inc. will use the proceeds of this offering to increase their
profitability thru direct sourcing and reduced cost, enhance their current store sales,
adding additional online stores. Web Direct Brands, Inc. will identify more overseas
partners to supply them with quality products at reduced cost. A significant part of the
proceeds will be invested to purchase inventory for the current and added online
specialty stores. Web Direct Brands, Inc. will conduct an extensive search to find
individuals with experience in the operations and promotion of a public concern.
Additionally Web Direct Brands, Inc. owns and is developing powerful niche
brands that have a high opportunity potential in the business to business marketplace.
These brands are being positioned or have already become market leaders in their
industry. These brands could easily be brought to consumers outside the web based
direct sales model, through a national business to business distribution model.
Table of Contents
Mission............................................................................................................................................ 1
Vision .............................................................................................................................................. 1
Executive Summary ........................................................................................................................ 2
Our Industry .................................................................................................................................... 7
Our Company .................................................................................................................................. 8
Web Direct Brands, Inc.’s Competitive Analysis ..................................................................... 22
Web Based Industry Leaders ................................................................................................ 22
Direct Competitors ................................................................................................................ 23
Brick and Mortar Industry Leaders ....................................................................................... 25
Our Facility ................................................................................................................................... 27
Our Business Strategy ................................................................................................................... 28
Our Marketing Plan....................................................................................................................... 30
Target Markets for GateCrafters.com ....................................................................................... 30
Primary Market ..................................................................................................................... 30
Secondary Market ................................................................................................................. 31
Additional Markets ............................................................................................................... 31
Target Markets for DIYPoolFence.com and LifeFence.com.................................................... 31
Primary Market ..................................................................................................................... 32
Secondary Market ................................................................................................................. 32
Target Markets for BestBuyFitness.com .................................................................................. 33
Market Segment – Retail ...................................................................................................... 33
Consumer Information .......................................................................................................... 33
Market Segment – Commercial ............................................................................................ 34
Service....................................................................................................................................... 35
Our Management Plan .................................................................................................................. 37
Goals ......................................................................................................................................... 37
Values ....................................................................................................................................... 37
Inventory Management System ................................................................................................ 39
Structure .................................................................................................................................... 41
Proposed Organizational Chart ................................................................................................. 42
Our Sustainability ......................................................................................................................... 47
Our Financial Plan ........................................................................................................................ 49
Build-Up Method ...................................................................................................................... 49
Investors Exit Strategy .............................................................................................................. 51
The Impact of Funding on Web Direct Brands, Inc.................................................................. 58
Income statement .................................................................................................................. 58
Balance Sheet ........................................................................................................................ 59
Expected Results and Target Measures .................................................................................... 61
Our Post Funding Operational Plan .............................................................................................. 63
Actions Plans - Table of Contents ............................................................................................ 64
1-Customer Satisfaction Ratings............................................................................................... 65
2- Create Online Shipment Tracking for our system ................................................................ 66
3- No Touch System ................................................................................................................. 67
4-Expand Trouble Shooting Flowcharts for Websites .............................................................. 69
5-Expand Product Advertisements beyond Online Search Engine........................................... 70
6-Testing of new product line already identified ...................................................................... 71
7-Develop More Overseas Suppliers for existing stores........................................................... 72
Appendices .................................................................................................................................... 74
Appendix A: Competitors Grid ................................................................................................ 75
Appendix B: Web Direct Brands, Inc.’s Customer Survey Results ........................................ 78
Appendix C: Targeted Expansion Product Lines..................................................................... 85
Appendix D: Assumptions ....................................................................................................... 91
Appendix E: Statement of Cash Flow ...................................................................................... 92
Research & References ................................................................................................................. 93
Prepared for: GIV
Our Industry
The online retailing industry growth has remained steady since the “shake-out” of
the late 1990’s and early 21st Century when many online companies, failed to produce
sustainable financial returns. In spite of an economic downturn, the online retailing
industry has yielded positive growth every year. According to the online market
research company Datamonitor, the industry has achieved a compound annual growth
rate of 26.4%.
With more and more Americans working hectic schedules as they attempt to
balance work, family and social life, there is a trend indicating they are very interested in
saving time. Online shopping is a perfect example of a time saver. Consumers can
learn about and shop for home improvement items long after all the Home Depots and
Lowe’s stores are closed and at times and locations that are more easy for them.
Internet shopping also allows consumers the freedom of shopping in the comfort
of their own home. Comparison shopping becomes much more productive and less of
an expense as consumers can find products and check out several stores product
offerings and prices without the drive which equates to substantial cost and time
savings.
Recent research has shown “that more than half of all adult Americans now have
a high-speed internet connection at home. As more and more households are
connected to the internet, there will be an increase in online consumption. “Research
predicts that in the United States alone online shoppers will double in five years.
Furthermore, there will be an increase in the number of times shoppers use the internet
to shop.
Cross-promotion of products increases sales for online shopping as customers
are attracted to products they might not necessarily be shopping for. Cross-promotions
also offer a high-profit margin as the advertising is done on an already existing web-site
that consumers are already visiting. Improvements to internet security are making
online shopping more attractive to customers. Customers are purchasing more niche
products online and over half of affluent customers prefer shopping online specialty
stores because of employee product knowledge. Thus, expanding the specialty market
should increase sales, while making it easier to target marketing efforts at these select
consumers.
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Our Company
Web Direct Brands, Inc. is an online retail corporation that specializes in specialty
products. Web Direct Brands, Inc. began in 2002 and currently owns and operates
more than 50 independent online specialty stores. Sales have increased from $2.3
million in 2003 to over $7 million in 2011 (estimated). It is based in Odessa, Florida,
where their office and warehouse is located on a custom designed single site.
Web Direct Brands, Inc.’s Online Stores:
GateCrafters.com is dedicated to getting you the best value for your dollar. We
strive to have the lowest prices anywhere, while utilizing both the web and telephone to
give you customer and installation support that is second to none. We also have the
best selection of perfectly matched accessories to meet all your gate and gate opening
needs. Whether you are looking for a gate, an opener for an existing gate, or a full
access control package, GateCrafters.com is the place to go.
PanicExitPro.com specializes in pro locks for industrial doors. These locks allow
people to exit the building in the event of an emergency while keeping the door locked
on the outside to keep people from using a particular door as an entry way. All of our
locks meet fire safety standards and are easily installed to provide safety and security to
the things you keep in your building and to provide peace of mind to you.
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We know how difficult it is to lose a beloved pet. We know that providing a
beautiful memorial is the proper way to say good-bye and we offer a variety of
memorials to suit any situation.
Gate-Openers.com is an official internet reseller of GTO/PRO and Mighty Mule
gate openers and accessories. We offer a unique streamlined layout for easy shopping;
simply select your gate opener and then browse through our accessory categories:
entrance, exit, safety and power. At Gate-Openers.com we believe in two things an
automated gate opener system doesn't have to break the bank and a do-it-yourself
installer can get the job done right without making compromises.
Carriage doors are an elegant accent for any home. They also pose a unique
problem for automation, but we have the solution. DIY installation offers convenience
and saves money.
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Mandolin Mart is your one stop shop for all of your Mandolin needs. We
specialize in Washburn and Oscar Schmidt Mandolins and accessories, so our time and
energy is devoted to Mandolins. This allows us to provide our customers with the
highest quality service and the best products available. We are an authorized Washburn
and Oscar Schmidt dealer, so you know that we offer the best products on the market.
What's in a name? Quality, history and tradition.
Our pallet jacks are designed to cover any warehouse need or situation. We
know what is required to run a warehouse efficiently, and we offer exactly that.
Drinking tap water is the single most earth-friendly action anyone can take.
Drinking purified tap water is also one of the few healthy actions that is also budget
friendly. Our system uses multiple filters for the cleanest water.
WaterTechSolar is your source for Solar Water Heating. Harness solar energy to
heat your home's water! WaterTechSolar offers a variety of kits to match family size and
solar zone, all in a DIY friendly website.
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BestBuyFitness.com is home to top quality fitness equipment at the lowest
prices. We cater to both the professional exercise community and the at home exerciser
with equipment to satisfy both needs. From weight lifting to toning to cardio,
BestBuyFitness.com has you covered. And with prices and specials like ours, there is
no other place on or off the web to get a better value.
Our decking tiles are ideal for finishing any patio or deck professionally. Our
unique Edge-Perfect edging pieces fit on customized tiles and provide a beautiful edge
with no gaps.
Racks2You.com specializes in hard to find server racks. Any business can find
the protective racks they need for their servers at half the cost of major distribution
chains. We ship anywhere, don't have any minimum order, and ship fast; usually the
very next day. Don't risk your investment, go to Racks2You.com and get the racks you
need for your server today.
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We're WDB Distributing, a company that specializes in creating, distributing and
supporting specialized web based brands. We run a streamlined drop ship program that
utilizes speedy turnaround and MAP prices to deliver higher than average margins as
well as a US based warranty and/or support center for our products.
The music of our unique instruments have featured in such mainstream
performances as Cirque du Soleil and Earth: Final Conflict. Asian instruments have also
become quite popular in a unique version of jazz.
GateSupply.com is the one stop wholesale outlet for gate openers, accessories,
entry communication equipment, and replacement parts. We feature extensive order
tracking, rapid shipping (same day in most cases), and amazing savings.
National Pool Fence is a "no minimum order" child safety fence dealer/installer
distribution site. The fence is of the highest quality and the lowest price that can be
found, great for starting a small home business installing pool fence. We will ship any
size order to any location, eliminating the costly need of inventory that prevents many
home businesses from getting started.
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A vacuum hidden in your walls, accessible in every room and bringing all that
nasty dust and dander straight to the outside; that is what VitalHealthVacuums.com is
bringing to homes across America. The convenience is great but the health benefits are
tremendous.
LifeFence.com offers a practical solution to pool safety. Our Sentry Safety EZGuard pool fence line is superior because it is easy to install, uses stainless steel rods
for optimal strength and resilience, and is backed by a lifetime warranty. Additionally,
our fencing creates smaller holes which are half the size of competitors, for a cleaner
look. It is completely removable, easily adjustable and comes with ground plugs to
cover the holes when the fence is not up. LifeFence.com caters to do-it-yourselfers by
offering packaged kits, a no hassle ordering process, portable easy to handle sections,
and helpful how-to instructions.
The YouthChairStore.com is a spin-off of a popular category on
WoodUFinish.com: Youth Chairs. Only we have taken it a step further;
YouthChairStore.com carries every type of youth chair, not just unfinished ones. You
can get the same popular unfinished models completely assembled and finished and
also other types of chairs for kids.
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The spremipomodoro (or better known as the tomato milling machine) separates
seeds, peel and all stringy parts from a variety of fruits and vegetable. It is ideal for the
preparation of smooth, sweet tomato sauce, ketchup, vegetable purees, pie fillings,
apple sauce, fruit and berry jams, marmalades and preserves. A must for the serious
canner; indispensable for restaurants, caterers, pizzerias and other similar
establishments. We are In Stock and ready to get yours shipped today!
As the largest retailer of gate openers in the US, we have learned that many of
our customers are visual learners. So we have taken our superior knowledge of gate
openers and combined it with our revolutionary IT developments and created a visual
site where you can design and see your gate opener system in a setting much like your
own home; helping you to understand and visualize what each component does and
why you need it.
WoodUFinish.com has all the finest unfinished furniture you could ever need.
Patio, living room, kids room, bedroom; no matter what part of your home we've got you
taken care of. Buying unfinished has its distinct advantages: you can see the quality of
the wood and you can finish the furniture in any manner to match the rest of your
existing decor.
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LockItKing.com specializes in Master Lock and Eagle King Pin Locks for semitrailers and recreational vehicles. The lock prevents others from hooking to your trailer
or RV by blocking the king pin. The lock is protected by a metal housing to resist
physical attacks. The lock is powder coated red and comes with a red flag to let would
be thieves know that your trailer is protected by a King Pin Lock from Master Lock.
The entryway to a home offers the first impression to guests and residents alike.
Create a distinctive impression with a customized gate.
Waring Pro has been a house hold name in blenders for many years. They have
grown into all facets of small kitchen appliances and we are so blown away with their
quality and reputation we decided to team up with them and dedicate this site solely to
their products. We cover any and all of your Waring Pro needs.
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The AutoHarpStore.com specializes in a unique instrument, autoharps. Every
musician that plays the autoharp knows how hard it is to find good one, let alone a store
that carries any at all. The AutoHarpStore.com carries many styles for all levels of auto
harp players, from professionals to enthusiasts, and has made shopping for one simple
and cost effective.
UShake.com is shaking up big savings in the paint shaking industries. What used
to cost thousands is now in the low hundreds; a personal, portable paint shaker. We
carry the Tornado II at the best price in town and also carry parts to keep you shaking
for years to come.
Pool safety fences have saved thousands of lives since first being mandated. We
have always been one of the leaders in in-ground pool child safety fences and now we
are rolling out our line of above ground pool fences. As always we will go the extra mile
with a simple DIY product, 7 day/week support, and plenty of online information.
Fabio Leonardi meat grinders and tomato milling machines are some of the top in
the world since 1917. We have teamed up with this legendary Italian manufacturer to
bring their products direct to the United States. We know Fabio Leonardi, we ARE
FabioLeonardiUSA.
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DIYPoolFence.com is a practical solution to child pool safety. The DIY Pool
Fence is superior in every way. We feature smaller holes, half the size of competitors,
for a cleaner look and easier installation. Our fence is completely removable, easily
adjustable and comes with ground plugs to cover the holes when the fence is not up.
We also rent the tools you need and ship them throughout the country. Our unique drill
alignment tool holds your drill at the correct angle to make drilling a snap. Doing it
yourself has never been so easy and cost effective.
Banjo Corner has a variety of banjos for sale with distinguished style and
discount prices. Only brand names with quality you can trust like Oscar Schmidt and
Washburn are sold. Banjos can be found for beginners and professional musicians. All
banjos for sale are brand new, and satisfaction is guaranteed. With our wide selection,
unique products can be found for each individual preference.
Gate openers can be too strong for the average vinyl gate, so we offer gate
openers specifically designed to support the specialized needs of vinyl gates. With 24/7
tech support, our gate openers are truly the most convenient choice.
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A good hunt can produce a lot of meat and BigGameGrinders and the equipment
to get that meat processed and into your freezer. Along with great hunting/preparation
tips, BigGameGrinders has all you need to get your meat processing tasks done cleanly
and efficiently.
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Brands owned by Web Direct Brands, Inc.
The F5 is an affordable, professional grade paint shaker intended for commercial
use. As an all inclusive kit, you’ll receive the necessary parts and tools to work this
shaker from the first day you receive it. Made of steel and then powder coated each unit
is built to last. The powder coating not only produces a more uniform finish but it works
to resist chipping, scratching and protects the surface from an overall faded
appearance.
With the Intellinote Bill Counter you'll save time, significantly cut down on human
error and efficiently block fake banknotes from affecting your business's bottom line.
With this compact, lightweight portable unit you can reduce the time intensive task of
hand counting while simultaneously protecting your business from fraud. Every year
small businesses lose money due to counterfeit banknotes. With the increasing
advanced individual printing capabilities, counterfeit currency is getting sharper and
harder to detect by the naked eye. Intellinote Bill Counter uses ultraviolet and magnetic
sensors to catch these fakes so you won't have to!
Titan pallet jacks are as tough as their name implies. Our pallet jacks are made
to fit any situation because we know each warehouse has its own needs.
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SentrySafetyHardware is the premiere brand for panic crash bars, door closers
and electronic entrance accessories. Our wide selection of tested and certified products
have been installed in hundreds of businesses across the U.S. and world.
EstateSwing.com is our corporate information site for the Web Direct Brands, Inc
private labeled/specially manufactured gate openers. Estate Swing Gate Openers have
been sold since 2002 by the thousands in the USA and have also reached into dozens
of other countries. Quality, dependability and easy DIY installation are the distinguishing
characteristics of the Estate Swing line of residential gate openers.
As a brand that signifies quality and service, Chicago Food Machinery came to
fruition as a result of a vision; one that wanted to pay tribute to the true Chicago-based
traditions of quality delicatessens. Dealing exclusively with essential food processing
products, this brand offers a variety of blenders, deli slicers, meat grinders and sausage
stuffers. Chicago Food Machinery offers a professional level of design and construction
while still maintaining affordability for small businesses and dedicated home cooks.
From the corner cafe to the bustling delicatessen to your very own kitchen - Chicago
Food Machinery products are designed to support your food processing and machinery
needs.
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Sentry Safety Pool Fence is the premiere brand for in ground and above ground
pool fencing. Our quality product line and dedication to child safety has made us the
most widely sold DIY pool fence brand in the world! Sentry Safety is a life saving
product line of pool fencing solutions. We are truly dedicated to the needs of our
customers specializing exclusively in the field of pool fences for homeowners,
communities, recreation centers and tourist destinations.
Minotaur Fitness is the name to know for fitness equipment. Our specialized
product line provides gym quality fitness units for in home use. We cater to
professionals and beginners alike and span the fitness spectrum from such items like
the Minotaur Olympic Smith Machine to the Minotaur Youth Mixed Martial Arts Trainer.
If you are seeking high end quality products without the high end price, Minotaur Fitness
is the brand that will fill this need. By narrowing our product line and focusing on one
model instead of multiple styles, grades or versions Minotaur is able to obtain higher
quantity at lower prices. We choose to pass the savings on to our customers because
we believe quality fitness equipment should be attainable for everyone.
We know what an IT professional needs. And we offer our products at
competitive prices with 24/7 tech support.
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Web Direct Brands, Inc.’s Competitive Analysis
Web Direct Brands, Inc.
Reputation, Innovative products, customer loyalty and branding play a very
important role in the success of Web Direct Brands, Inc. It has proven its ability to
assure potential customers of the quality of their products it sells by providing more
detailed information about their products and to educate their consumers.
Web Direct Brands, Inc.’s diverse product mix, has no direct competitors, but has
many individual product competitors. There are websites that offer similar products at
similar pricing to Web Direct Brands, Inc. However, Web Direct Brands, Inc. combats
these online retailers by using its in-house web development team to providing a
superior consumer experience. This development team has created exclusive in house
tools that monitor changes on competitor’s sites daily to give Web Direct Brands
marketing team instant notifications of price changes. Web Direct Brands, Inc. used its
expertise in better customer experience and branding to bring confidence to potential
customers and creates a clear competitive advantage over more widely recognized
retail brands. Web Direct Brands, Inc. also creates a following of consumers that are
eager to recommend Web Direct Brands, Inc.
Web Based Industry Leaders
The leaders in online retailing do not compete directly with Web Direct Brands,
Inc. These merchants and their affiliates produce similar product offerings, but do not
offer the depth of knowledge on their websites.
Amazon.com is a global brand operating in multiple nations around the world.
The company sells merchandise directly to consumers as well as provides an online
market space for vendors to sell merchandise to consumers via the World Wide Web.
Merchants utilizing Amazon’s platform share a small percentage of online sales revenue
with the company.
Corporate office: Seattle, Washington
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Primary Strengths: Strong global brand recognition, multiple Amazon branded websites
in multiple languages, company’s size and global presence allows for economies of
scale.
Primary Weaknesses: Constrained descriptions and limited ability to contact experts
before consumers make a purchase.
EBay is another online leader. They are as an online auction site and serve as a
virtual market place for merchants to offer their products and services to consumers via
the World Wide Web. EBay receives a small percentage of all sales and auction
proceeds from sellers utilizing the web site.
Primary Strengths: Strong global brand, unique business model, consistently strong
revenue growth.
Primary Weaknesses: increasing expenses, declining online advertising revenue.
Corporate office: San Jose, California
Direct Competitors
In addition to large web-based competitors, Web Direct Brands, Inc. has multiple
competitors including:
Brand Competitors-DIY Pool Fence
Best Buy Pool Supply-Rancho Cordova, CA
U.S. Fence-Erie, PA
Protect-A-Child Pool Fence Systems-Pompano Beach, FL
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Brand Competitors-Best Buy Fitness
Nautilus Inc. (Nautilus, Bowflex, Stairmaster) Santa Monica, CA
American Fitness-Salt Lake City, UT
Brand Competitors-Gate Crafters
Amazing Gates-Bernalillo, NM
Access Control Distributors of Texas-Houston, TX
With the exception of Nautilus, Inc., each of these companies are privately held. Sales
information is not available at this time.
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Brick and Mortar Industry Leaders
The three largest brick and mortar retailers in the home improvement/DIY
industry are Home Depot, Lowe’s, and Sears. These retailers benefit from a strong
brand identity as well as a presence in both the physical world as well as the online
market space. Home Depot and Lowe’s compete with Web Direct Brands, Inc. and
other online retailers by offering a similar product mix in the gate opener and pool fence
market. Similar to their online stores the associates that man their stores lack in depth
knowledge of the competing products offered.
Home Depot is the largest home improvement products retailer in the U.S. The
company’s primary target market is consumers who wish to make their own home
repairs and improvements.
Primary Strengths: Strong market position and a diversified customer base.
Primary weaknesses: High debt and tight U.S. economy, especially within the housing
market. Also strong competition from Lowe’s which has been increasing market share
over the past several years.
Corporate Office: Atlanta, GA
Lowe’s is the second largest home improvement products retailer in the U.S.
The company directly competes with Home Depot for market share and targets similar
customers.
Primary Strengths: Balanced product mix, strong market position.
Primary Weaknesses: Concentrated geographic presence, weakened U.S economy
and declining home sales.
Corporate Office: Mooresville, NC
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Sears has been in business for more than 100 years. The company has
managed to leverage its brands over the past decade to improve overall financial
performance. The company strengthened its brand by merging K-mart Corporation in
2004. The combining of the Sears and K-mart created the third largest retailer in the
U.S.
Primary Strengths: Strong market presence, broad product offerings
Primary Weaknesses: Slowdown in U.S. economy, declining same store sales.
Corporate Offices (U.S.): Hoffman Estates, IL
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Our Facility
Web Direct Brands, Inc. is a flexible organization that listens to its employee’s
ideas, and has created an inspirational work environment. Web Direct Brands, Inc.’s
headquarters and warehouse is located just north of Tampa, Florida with logistics
partners in Guangzhou and Shanghai China. We also plan future shipping centers in
Nevada and Ohio, to speed shipping times and reduce shipping cost.
The Tampa based headquarters was built and designed specifically with the web
sales industry in mind. It has 7 atriums, a fitness center and a coffee shop all located in
a 22,000sf facility. Adjacent to its unique showroom is a fully racked warehouse to store
full pallet goods and a welding facility to handle the gate manufacturing operations.
This facility and recently acquired adjacent property is designed to handle $20million in
annual sales. Additional planned distribution centers will be located in Nevada and Ohio
and will facilitate ground shipments to over 95% of the population in 2 days or less. The
distribution center in Nevada will be added first, when we surpass the $10 million mark
and the center on Ohio will follow based on sales volume. Our Tampa facility when
teamed up with the other distribution sites will support up to $50million in annual sales.
China based consolidation warehouses are partnered facility that is a rent by the
pallet warehouse. It is used to consolidate shipments into larger containers and thus
saving considerably more in shipping costs than the cost of the facility. These facilities
also give us clout with China based manufactures and allow for more flexible
purchasing that enhances inventory turn. Containers released from this warehouse
arrive in our Tampa facility within 30 days.
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Our Business Strategy
The hallmark of our business strategy is the “Direct from Manufacture, Direct to
Consumer” model. Although Web Direct Brands, Inc’s websites offer many well known
brands, we strive to create our own brands presence. This business strategy eliminates
many inefficiencies from our supply chain. Historically there could be many participants
in the supply process including: manufacture, trading company, exporter, importer,
distributer, dealer and retailer. These participants all extract profit from the transaction
without adding much value. Our business model creates many product offerings with
superior profit levels. Additionally we offer better products by working closely with our
manufactures to leverage our unique position of understanding consumer needs and
use direct feedback from customers to create and manage great consumer brands.
Web Direct Brands, Inc. is fully aware of the market place forces that affect the
company. For example, they are aware of the power buyers and suppliers have in
controlling prices, the threat of new competitors, brick and mortar competition, and the
impact of rivals offering lower prices.
Ease of price comparison and intense competition has increased the power of
consumers and has eroded the margins for many online retailers. Web Direct Brands,
Inc. had an advantage over other online retailers because of its global approach to
sourcing. This approach adds considerably to margins and allows Web Direct Brands,
Inc. to compete more easily with smaller specialty websites organizations and individual
stores. Greater consumer power exists primarily due to the fact that consumers,
generally, visit multiple websites to comparison shop before making the final purchase
decision. Such factors as price, availability, and trust in the retailer may impact an
online retailer’s likelihood of closing a sale. Web Direct Brands, Inc. has further
mitigated selling price impact on sales by developing the Update hound proprietary
logarithm to automatically compare and shop competition on a daily basis, reporting
back changes.
Supplier Power is considered strong for specialty or niche products, suppliers
typically exert more power than for undifferentiated, non-specialized products. Web
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Direct Brands, Inc. is able to mitigate this effect by offering a diverse product mix and
direct sourcing solutions making Web Direct Brands, Inc. competitive with other
offerings, both on and off the Internet.
The impact of new competitors on Web Direct Brands, Inc. is considered
moderate. Due to the highly competitive nature of online retailing, the most successful
merchants are those that can either reduce price to generate higher sales volume or
create higher value in products by perceived value and branding. An additional issue is
online security. Quality retail branding tends to create trust, thus limiting the customer’s
concerns about online fraud and identity theft. Web Direct Brands, Inc.’s branding
efforts to position itself as a large trustworthy e-retailer, gives it a trust advantage over
smaller competitors.
Since the primary substitute for online shopping is considered brick and mortar
stores. This threat is viewed as declining. Web Direct Brands, Inc. offers cost and time
savings to consumers that brick and mortar retailers are not able to. Built into each of
Web Direct Brands, Inc’s stores is a product knowledge base that is not able to be
offered by traditional brick and mortar stores. This knowledge base is generally superior
to what is offered by brick and mortar operations and can be easily accessed by
consumers 24 hours a day.
The Impact of Rivalry is considered moderate. The effect of rivalry pricing is
mitigated by how easily rivalry information may be obtained thru the internet and by our
proprietary price checking tool updatehound.com that updates us on competitor pricing
changes. Additionally thru our world-wide sourcing efforts, we bring additional product
lines not offered by our competitors that have distinct consumer advantages.
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Our Marketing Plan
Web Direct Brands, Inc. is positioning itself in the market as the specialty
provider information for each of its product lines. It differentiates itself from the
competition by becoming an expert on each of its product lines and passing this
information down to its customers through their websites. We provide superior service
by investing in their employees’ knowledge of products through training classes that
suppliers offer and by demanding that each store manager become an expert on the
product lines they offer.
Included is Marketing plans for our top 3 segments: Gate openers, Swimming
pool safety fences and Fitness equipment.
Target Markets for GateCrafters.com
The fencing market is growing steadily, reaching nearly $3 billion in annual sales.
Even though the new home market has
grown nationally. American’s are using
more of their disposable income to
spend on home improvements. This
growth rate averages 3.7% annually.
Primary Market
The average income for the primary target market for Gate Crafters ornamental
fence products is single family homeowners in the U.S. with combined family incomes
exceeding $75,000 yearly. This primary target group makes up just over 26.75% of the
U.S. population. This primary target market is made up of Americans between the ages
of 35 to 54 years of age, who are interested in do-it-yourself home improvements. The
youngest of the baby-boomers, which account for 78 million Americans, has now
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entered this 35 to 54 age group, with many of them owning homes that fit into Gate
Crafters target market. Since middle-age homeowners make up the majority of home
improvement market, and this segment of the population is less likely to move
frequently, it is easy to make the assumption that this market is going to continue to
grow for the near future.
Secondary Market
Web Direct Brands, Inc. secondary market for aftermarket gates is professional
gate installers and is handled through a different website named GateSupply.com. To
maximize the value of their homes, Americans are spending increased amounts of
money on home repairs and refurbishments. Non-wire ornamental metal fences and
gates segment accounted for over 32% of the entire metal fencing industry. Contractors
are often used for the installation of ornamental fencing as these projects are often
deemed to be overly difficult, and complying with complicated city codes further
necessitates professional assistance. Growth trends provide an opportunity for Web
Direct Brands, Inc. to grow their secondary market by developing a strong relationship
with its customers and possibly developing some direct marketing to this demographic
in the near future.
Additional Markets
Additional markets for Gate Crafters consists of sales of its products to
companies in the agriculture industries, self-storage, boat dry-dock, moving companies,
and apartment and home communities that have installed security gates.
Target Markets for DIYPoolFence.com and LifeFence.com
The primary “safety” segment wants pool fences to protect children from
accidentally falling into their pool and being injured and those that are complying with
state laws or requirements like those in Arizona, California, Florida, and Nevada.
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Primary Market
Families with pools want to make sure they protect their children or other children
who may be on their property from accidentally falling into their pool. According to the
2000 Census, approximately 33 percent of the 105 million households in the United
State have children under the age of 18.
Specialists in Business Information (SBI) estimate that there are more than 95
million recreational swimmers in the United States, indicating the activity is more
popular than recreational walking (92 million) and bicycling (15.6 million). SBI also
reports that approximately one-third of consumers played or swam as an activity during
the previous twelve months. SBI estimates there are approximately 8.6 million
residential swimming pools in the United States.
The CDC reported that in 2004, there were 3,308 fatal drowning in the United
States not including the boating-related incidents. For every child drowning, another
five children receive emergency department care for nonfatal submersion injuries, with
more than half requiring hospitalization or transfer to another treatment facility.
Nonfatal drowning can result in brain damage or other long-term disabilities. The CDC
reported that 26 percent of children between one and four who died in 2004, died from
drowning; fatal drowning is the second-leading cause of unintentional injury-related
death for children between the ages of one and fourteen.
Pediatrics reported that a Maricopa County, Arizona study estimated that 51
percent of drowning could have been prevented by proper pool fencing. Pool fencing
can prevent direct access to the swimming pool from the house and yard.
Secondary Market
Swim pool safety fence is required when ownership of a residence is changed
and during times of child custody battles.
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Target Markets for BestBuyFitness.com
During the 1970s and 1980s, the physical fitness and equipment industry
comprised small companies that generally specialized in one or two products. As
fitness and exercise became mainstream activities, it attracted “marketing” type
companies that expanded the market through new products and innovative marketing
practices—namely, television infomercials.
Market Segment – Retail
The physical fitness and exercise equipment is
separated into two consumer segments, retail and
commercial. Because consumers want convenience
and privacy, home exercise equipment can be found in
over half of all U.S. homes. Busy lifestyles do not allow
consumers the time to visit a gym regularly.
Additionally, as the age of the consumer increases, so does the need to exercise in the
privacy of his or her home. These consumers fall into two types of home exercise
equipment buyers, the serious fitness enthusiast and the newcomer to the market.
Consumer Information
Currently, there are 49.7 million American adults who fall into the category of Fit
consumers. They comprise about 23% of the adult population. Packaged Facts
estimates that these consumers have a household income totaling over $2.2 trillion.
Packaged Facts also realizes that the growing trend to be fit and healthy will result in an
increase to 24% of fit consumer households with a total fit consumer household income
soon to reach $3 trillion.
Fitness consumers are younger than other consumers. For example, 18-to-29
year-olds comprise 23% of the population of fitness consumers and only 18% of other
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consumers. Those in the 30-to 39-year-old age group make up 20% of fit consumers
and 17% of the population of other consumers. Around 64% of fit consumers are under
the age of 50, while only 55% of other consumers are younger than 50.
There is a strong correlation between fitness and age. The percentage of these
consumers in each age group declines steadily from 28% of 18-to-29 year-olds to only
13% of those 75 and older.
Additionally fitness consumers are much more likely to have obtained a higher
education or be more educated than other consumers. Around one out of three of these
consumers have a college degree or more, compared to only one out of five other
consumers, and are more likely to make purchases on the Internet.
Fitness enthusiasts are more likely to eat and live a healthier lifestyle. More
Americans are realizing that a sedentary fast food filled lifestyle will only lead to obesity
and health problems. They grasp the importance of eating healthy and staying active
and understand that it adds value to their life.
Market Segment – Commercial
The commercial market uses
basically the same type of equipment as the
retail market, but is typically more expensive
and built for heavier use. Although the
market for commercial fitness is a mature
market, the opening of neighborhood fitness
and health centers has continued to grow.
End-use markets for commercial equipment
include community parks and recreation
centers; corporate wellness; country clubs;
health clubs; hospital fitness centers; hotels
and motels; military; physical therapy and
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rehabilitation; residential developments; apartment complexes, schools, colleges, and
universities; Young Men’s Christian Associations (YMCA), Community Centers, Boys
Clubs, etc.; and others”.
“Commercial health clubs are, by far, the single-largest market for physical
fitness and exercise equipment. Physical therapy and rehabilitation is the secondlargest market. This segment’s market share has fallen off in recent years as managed
health care operators and Medicare have cut benefits. The third-largest market is
schools, colleges, and universities, but this has seen some market erosion as other
markets have grown more rapidly. There are a number of very small markets, including
country clubs, the military and residential developments. The fastest-growing market is
hotels and motels. As the lodging industry experiences its most profitable years in
history, the physical fitness and exercise equipment industry has profited”
“The commercial channels of distribution differ somewhat from the retail channels,
although some overlap. Commercial sales are generally through direct sales, wholesale
distributors, authorized retail dealers, fitness consultants or manufacturers’
representatives, medical equipment dealers, and sporting goods (full-line and specialty)
retailers”
Service
The service Web Direct Brands, Inc. provides to its customers is evident by its
continual growth in sales. The company provides added value service customers by:
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Extended office hours for customer questions and installation help
Research on the products offered to ensure high quality and guest
satisfaction
Warranty options for various products lines
Extensive detailed product information listed on web sites
Comparison options on website for products and features
Customers’ feedback improvements to manuals and video for product lines
Offering multiple options for payment
110% price match guarantees on various product lines
Free shipping for certain product lines
In product showroom, live web cameras for demonstrations purposes
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Our Management Plan
Goals
Web Direct Brands, Inc.’s plans to reach a minimum of $20 million or more in
sales by the end of year 5 with 17.5% profit. This position will allow for raising additional
capital to ultimately become the largest online retailer of specialty products. The
company is still very much in the growth phase and is focused on creating more
opportunities to grow the business even further.
Values
Our values represent our convictions of what is important in creating a positive
work climate. Trust, teamwork, fun and friendship enable all associates to excel and
contribute to the attainment of personal and organization goals.
We are successful when we:
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Have high expectations of each other and set clear and challenging goals.
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Continually improve our processes and our services.
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Respect each other; appreciate diverse opinions and the diversity of our
associates.
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Respect time and manage it wisely.
Web Direct Brands, Inc.’s management plan revolves around products’
information, services, and information technology.
Web Direct Brands, Inc. has a large product mix and does not rely on any one
particular market niche. The company’s product strategy is to identify, select, and offer
products that sell well over the internet within the marketing plan that Web Direct
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Brands, Inc. has created and have a sufficient markup to make offering the products
profitable. Additionally, each product needs to be able to demonstrate a clear
competitive advantage over other etailers offerings.
Web Direct Brands, Inc.’s service strategy is to have more knowledge about a
product than their competitors and to be able to provide that information to their
customers more effectively thru efficiencies of the web than their competitors. Web
Direct Brands, Inc. will continue to raise the bar on their service delivery in many cases.
The service it provides to their customers is often what differentiates them from the
competition. The company focuses on ways to keep a competitive edge over the other
on-line retailers. Web Direct Brands, Inc.’s continual improvement program will continue
to hone their product knowledge to the continuously shifting demands of their
customers.
Web Direct Brands, Inc. recruits, develops, and retains a talented and diverse
workforce. Our staff required to be knowledgeable about products, highly motivated,
and have good communication skills. Our strategy is to recruit heavily through the
college campuses and utilize intern programs to develop potential employees for when
they graduate. We enhance our associates' knowledge through training and
development. We conduct regular market studies of compensation so they can offer
competitive compensation packages. We provide challenging opportunities for personal
and professional growth.
Web Direct Brands, Inc.’s pricing strategy is to remain competitive. We explore
and implement opportunities to reduce costs to maintain higher Margins while remaining
competitive. We explore and develop relationships in China and other countries to
produce products at a reduced cost. For example, we are working with a pool fence
supplier to significantly reduce the cost of goods and thereby increase profit potential.
As we identify and select new product lines we consider whether the product could be
branded by our company and made overseas at a reduced cost.
Additionally we have implemented innovative tools to automatically track
competitors. Our Update Hound tool “sniffs” out changes in our competitors sites and
automatically notifies us when their price has changed, offers have changed or they
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have fallen below a manufactures minimum advertised price. This proprietary tool can
even notify the manufactures directly and provide a screen capture of the violator’s site.
So that manufactures doing business with us can more easily keep track of their dealers
and identify violators of their MAP pricing policies. This type of technical innovation sets
Web Direct Brands, Inc. apart from the suppliers other customers and helps build lasting
relationships while addressing concerns of the supplier when it comes to sales of their
products on the web.
Inventory Management System
Inventory ordering and control presents an opportunity for improvement at Web
Direct Brands, Inc. Currently, the company performs an annual physical inventory for
each of its stores. The amount of inventories performed increases only when a store
has excessive stock-outs.
The proposed inventory management system would allow the amount on hand to
be better known without physically counting each product. Web Direct Brands, Inc.’s
historical inventory turnover ratio ranges between 2.2 to 3.2, well below the industry
average. This indicates that there is still an opportunity to further maximize the
company’s profit margin. The company CEO estimates that an average of $500,000 in
excess inventory is carried. With the company expecting a 47% return on equity over
the next five years. This equates to $235,000 that could be been generated by the
reinvestment of the $500,000 held in excess inventory.
Figure 1. Web Direct Brands, Inc.’s Inventory Turnover Ratio
Ratios
Inventory
Turnover
Year 1
3.3
Year 2
4.0
Period
Year 3
4.4
Year 4
4.8
Year 5
4.8
Industry Average
Upper Median Lower
14.2
6.6
3.2
Web Direct Brands, Inc. is in the process of implementing a new inventory
management system. This will help to keep track of inventory more accurately. In
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addition, it will reflect current inventory levels so that approximated physical counts do
not have to be performed for every order placed. When the company begins to keeps
better track of their inventory levels they will take better advantage of their inventory
reorder points and avoid stock-outs without having to carry excess inventory. Finally, it
will benefit the company even more by centralizing inventory management as they plan
to expand and open warehouse and shipping centers in Ohio and Nevada.
Utilizing this inventory management system would help to ensure that the
company is prepared to take advantage of optimal reorder points as the information for
ordering and inventory levels will be more readily available. The batch size for the order
quantities is already predetermined by the suppliers and the lead time is generally
several months for imports and several weeks for US supplied goods. However, some
store managers will find themselves stocking up above needed levels to avoid constant
physical inventory counts.
The primary benefits of adopting this inventory management system include:
• Ability to track inventory flow daily, weekly, monthly, or in real time.
• Significant reduction in the amount of safety stock on hand due to increased
inventory controls that make stock-outs less likely.
• Reduced shrink caused from theft and received shipment shortages.
• Improved inventory turnover.
• Reduced ordering and inventory carrying costs.
The proposed system would not eliminate the need for physical inventory counts.
In fact, Web Direct Brands, Inc. will migrate to a continual spot inventory to verify its
count instead of counting every time an order needs to be placed. Store managers will
rely on the weekly “Inventory Snapshots” when placing orders which will allow them to
focus their energy on selling more products versus counting product and developing
their own individualized systems for ordering.
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Structure
Web Direct Brands, Inc. is a Florida C corporation. Outstanding stock is currently
is owned by Anthony Gaeto (57%) and Jerry Koehler (43%) The company holds a
conditional Option to repurchase 20% of the company from Jerry Koehler with the
condition that the company is funded for growth as outlined by this business plan.
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Proposed Organizational Chart
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Management Team
Anthony Gaeto
President, CEO, Co-Founder
Anthony Gaeto has spent his entire business life leading his own companies with
innovative and successful concepts. His initial business ventures What's Amatta You
Pizza, a regional pizza chain started in 1983 while still attending USF. He moved on to
run Prism Auction, a Tampa based national liquidation and Auction Company
Liquidating Discovery Zone and excess units of from Little Ceaser’s Pizza, Dennys
restaurants and Morton’s Steakhouse, among others. His savvy business skills were
then applied to the origination of Web Direct Brands, Inc. in 2002. Focusing on the
creation and expansion of specialty websites, Web Direct Brands, Inc. under Anthony
Gaeto's leadership has gone global, with semiannual visits to China where Anthony
Gaeto sources and develops new and innovative product lines.
Recognizing the potential of brands developed in the Web Direct Brands, Inc.
system, in 2010 Gaeto started a sister corporation Sequoia Brands a unifying brand
holder that would develop brands for Web Direct Brand’s specialty stores. Whether
focusing on export of his Sequoia Brands segment leading products, online retail
expansion of Web Direct Brands or sourcing the next unique product for future branding
opportunities, Anthony Gaeto has been at the forefront of international trade. During his
many visits to mainland China, Anthony Gaeto meets with strategic business leaders
and government officials.
Additional international relations are strong in Italy with Fabio Leonardi food
machinery and FAAC, the world leader in gate opener manufacturing. With international
connections and solid business ventures, Anthony Gaeto has reached beyond boarders
to facilitate relations with the global business community.
Jerry W. Koehler
Co-Founder
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Jerry W. Koehler earned his doctorate in Communication from Pennsylvania
State University in 1968. Upon graduation he became the Special Assistant to the Chief
Executive Officer at the Teachers Management and Investment Corporation in Newport
Beach, California. Later, he joined the American Express Investment Management
Company and became a worldwide leader in sales. Between 1972 and 1976 Dr.
Koehler was Director of the University of California's Executive Program. Following UC,
Dr. Koehler joined the University of South Florida where he served as Assistant to the
President, Dean of Extended Studies, Department of Management chair, and presently
serves as a Professor of Management. Dr. Koehler has also served as Deputy
Secretary for Florida's Department of Labor and as a full time consultant to Honeywell
Space Systems. He has authored or co-authored twelve books, numerous papers and
articles. Dr.Koehler has assisted Mr. Gaeto in establishing What's Amatta You Pizza,
Prism Auction Inc., and United Auction Affiliate.
Mathew Raab
VP, Director of Marketing
Mathew Raab brings a deep understanding of the core principles to the
organization. He has been involved in with the founders of the business prior to its
inception. He was promoted to Vice President of Web Direct Brands, Inc. in the fall of
2006 working his way through the ranks at Web Direct Brands, Inc. from the first day.
Originally he came on board to help with the expansion of Prism Auction and Internet
Sales Logistics, Corp., a precursor to Web Direct Brands, Inc. At ISL he started in an
entry sales position and was soon promoted to Marketing Manager, assisting new
clients with promoting their FreeTilitSells.com Netchise as well as FreeTilitSells.com
directly on the web. As time progressed the company Web Direct Brands, Inc. was
formed and Mathew’s marketing roles were transferred to help the new venture
succeed. While Web Direct Brands, Inc. was in its beginning stages Mathew assisted in
all roles of the company including developing and refining the future role of store
manager. In doing so he developed and took on the role of store manager for multiple
sites including DIYPoolFence.com, YouthChairStore.com, UShake.com,
WoodUFinish.com, LifeFence.com, TomatoMilling.com and others. The information and
development techniques learned from managing these stores were used to repeat
successes with new stores. His role also included a lead in developing branded
products for Web Direct Brands, Inc. and managing day to day operations of store
managers.
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Prior to working with ISL and Web Direct Brands, Inc. Mathew worked
professionally for a marketing firm. Academics were completed with the University of
South Florida with a BA in Mass Communications – concentration in Advertising.
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Terry Williams
Director of Information Technologies
Terry Williams Jr. brings over 10 years of technology leadership experience to
the Web Direct Brands team. He has a proven record of dynamic information
technology leadership with years of demonstrated achievements in delivering technical,
service and operational improvements for multimillion dollar companies and clients. His
experience crosses into many business fields such as ecommerce, technology,
healthcare and the travel industry. Terry is a results-driven professional known for
pioneering effective methods to expand technological capability, fuel productivity and
increase profits. He is able to develop cutting-edge strategies to boost team
performance, develop innovative processes/procedures and impact the corporate
bottom line. Terry holds an MBA from Saint Leo University.
Su-lieng Ho-Kong
Interim Director of Operations
Su-Lieng is the hub of all of the day-to-day operations at WDB. After completing
studies in Industrial Engineering, she became involved with several small developing
companies. Ms. Ho-Kong received her MBA from the University of South Florida and
has more than a decade of experience in managerial and operational roles. She works
in all areas of the business, from communicating with suppliers to customer relations.
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Our Sustainability
One of Web Direct Brands, Inc.’s most important sustainable advantages is their
knowledge provided to consumers by associates and on their websites. For
consumers, knowledge is power. Consumers look for product information and price
comparison before making a decision. Web Direct Brands, Inc.‘s lines capture the
consumers attention early in the decision making process by providing high amount of
information about the products. Customers will also learn the benefit of buying those
products from one of Web Direct Brands, Inc.’s stores.
Typically consumers that often make their purchases on the internet focus on the
reputation of the company and determine if it is a trusted source. A good portion of
these customers are loyal to certain companies just because of the time saving factor of
being able to go directly to their web site, knowing that they will find what they need and
how their sale will be completed. These customers tend to be more company or brand
loyal. Mega retailers are doing a good job capturing these sales. On the other hand,
consumers that need a product that they don’t normally purchase will purchase from a
website they have never been to before if that website can demonstrate that they are
likely to meet their needs and help them make the best decision.
Since Web Direct Brands, Inc. is focused on providing superior information about
products not purchased every day. Specialty products not sold by large retailers fit well
into their business model. An additional key factor when selecting products to sell, Web
Direct Brands, Inc. focuses on margins. This initial determination creates a large
amount of profit and leaves room for price discounting to generate sales if necessary.
Web Direct Brands, Inc.’s CEO and founder Anthony Gaeto is hard working
entrepreneur who has a strong desire to succeed in the ecommerce business. He has
a great understanding of the web marketing and is able to identify products that can sell
well online. The CEO also has an excellent ability to establish positive business
relationships with production facilities in China and around the world, which lowers
production costs.
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There is a good interdisciplinary cross knowledge between store managers,
which improves flexibility of assignments. Senior management and key personnel are
not afraid of doing manual labor and are quick to lend a hand when needed. Web
Direct Brands, Inc. effectively uses in house knowledge to improve its IT services while
lowering payroll expenses by employing five full-time and IT professionals in China.
The company also has in China a sourcing professional who interfaces with Chinese
companies and researches product lines and production opportunities.
Web Direct Brands effectively employs a web-based advertising and marketing
campaign using internet search engines to attract customers to their websites. Web
Direct Brands, Inc. spends and average of 6.50% of gross sales to ensure its product’s
placements are optimized and highly ranked on Google.com. The customer service
department uses company enhanced product manuals to address customer needs and
concerns to minimize returns, and to gain a competitive advantage over competitors.
Although Web Direct Brands, Inc. web-sites appear to be independently owned store
fronts, they are actually interconnected and enjoy a one-stop check-out center. Web
Direct Brands, Inc. has effective distribution channels that allow it to drop ship nearly
50% of its products to the customers, which lowers shipping and/or handling costs.
Web Direct Brands, Inc. is building an interactive customer loyalty program.
Once the company sells and ships an item, there is follow up with the customers to
collect feedback from the customer. In addition, there is a cross merchandising
program promoting other products that the customer may want to purchase.
According to QuickMBA.com, “When a firm sustains profits that exceed the
average for its industry, the firm is said to possess a competitive advantage over its
rivals”. There are two types of competitive advantage, cost or comparative advantage
and differentiation advantage. Web Direct Brands, Inc. currently has a differentiation
advantage by offering specialty retail products that attract consumers looking
specifically for those products. Additional features that WBD performs well are easily
navigable websites along with an easy shopping experience for consumers.
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Our Financial Plan
Web Direct Brands, Inc. had a history of tax basis accounting practices. Our
current financial record show our business as it would be prepared for IRS returns. This
record includes incentives and accelerated depreciations allowed by the tax code. We
will show the last 3 years of financial history, as tax based accounting. Then we will
recast that 3 year history to more accurately demonstrate the true general accepted
accounting principles (GAAP) financial pictures by excluding some shareholders perks
and moving some funding for building improvements from repair and maintenance to
capitol structures. Web Direct Brands, Inc. will then use the build up method to project
sales and income for the next 5 years. In addition Web Direct Brands, Inc. will factor in
to those projections the impact of additional funding and provide an exit plan for
investors. Future accounting will migrate to a more GAAP based in principal.
Build-Up Method
The build-up method of forecasting requires you forecast sales based upon the
capacity of the firm. Once capacity is determined, the basic unit that sales are based
upon must be identified so that sales can be determined in anticipation of how that unit
will change. Many of Web Direct Brands, Inc. could be shipped directly from the
supplier, which opens up Web Direct Brands, Inc. capacity and breaks down many of
the normal limits a company warehouse would have. Therefore the main constraint to
Web Direct Brands, Inc. is their inventory management process and their ability to offer
new products that will go on to become successful stores.
Analyzing the sales of each of Web Direct Brands, Inc.’s stores identifies the
average sales growth for stores in their first four years. The growth rate for Panic Exit in
its first year was omitted from calculations because the store had a growth rate of over
500% that year, most likely due to being opened late in the year. Based on these first
four years an average sales growth was obtained that could be utilized in estimating
sales growth for each year beyond year four. The previous sales history also helped to
determine the average first year sales for a Web Direct Brands, Inc. store. The sales for
Gatecrafters “other” was omitted in calculating the average first year sales for a new
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store because it was an extreme outlier by differing in sales from the average by more
than two million in sales.
In the following scenario, the average first year sales for a new store was utilized
when determining sales for new stores.
It is assumed that Web Direct Brands, Inc. completes the improvements to their
inventory management systems and continues their ability to attract and retain new
customers. The company goes on to be successful at opening five to ten additional
stores each year, whereas three to five obtain notable success. The average growth
rates calculated by looking at previous stores histories are used for the applied growth
rates.
Web Direct Brands, Inc. is seeking funding to accelerate the growth of its
business model and to increase buying opportunities of goods with a higher margin of
profit, thus increasing profitability of the company as a whole. Adjustments to the BuildUp method of projections are explained as the following:
We will increase the spending over acceptable cost norms in the IT department
and marketing department to create more sites and improve customer experience on
existing sites by $410,000.00 in year 1, $320,000.00 in Year 2, $200,000.00 in year 3,
and $150,000.00, in year 4 and $100,000.00, in year 5.
The cost to acquire goods from overseas suppliers will disproportionately
increase due to efforts to bring in new inventory and test sell items that ultimately not be
part of our future. Therefore there will be an increase this spending over acceptable cost
norm by $160,000.00 in year 1, $120,000.00 in Year 2, $80,000.00 in year 3, and
$60,000.00, in year 4 and $30,000.00, in year 5.
We will slightly increase our overall advertising budgets in the first three years,
this extra budget will be strategically used to edge out competition after we have raise
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the cost on new competitors entering the market by creating comprehensive websites
competing against each other.
In year 2 we will rent and stock with key inventory, a new shipping location in
Nevada to more efficiently ship to western customers, to increase our competitive
advantage in both time and cost of shipping.
We will make an investment into operations director and CFO to increase
efficiency, more accurately reflect financial data and to position the company for an exit
strategy for investors.
We will make a significant investment into inventory, our strategy will be to
increase the quantity of items being sourced and test marketed to the US market thru
existing marketplaces like eBay, Craig’s list, FreeTilitSells, Amazon, and Sears, Identify
what items will benefit from a permanent professional website and create a plan for long
term sales of niche product lines.
Investors Exit Strategy
At the end if the 5 year projected time period Web Direct Brands, Inc. will be
greatly benefited by a new growth plan that will include expansion to more distribution
centers so most of our customers can receive their goods in one business day and for
their expansion into new lines. At that time Web Direct Brands, Inc. will be in the
position for additional funding. Web Direct Brands, Inc. may also be in the position for
being acquired by competitors or other investment concerns.
Web Direct Brands, Inc. debt strategy is to use long-term debt for capital
improvements such as their headquarters, offices, warehouses and shipping facilities as
appropriate. We continue to use short-term seasonal debt as appropriate for necessary
inventory.
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The chart above combines the 2 curves that represent our past history and
projects our growth with and without funding. The future looking portion of our chart
demonstrated the build up method of projecting future sales, most likely scenario, based
on our adjusted gap based accounting. The steeper line represents the projected sales
of our company with an addition of capital that will improve our position in the
marketplace, ability to create more sites and ability to buy more goods direct from
suppliers around the world.
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Historical Income Statement
2006
2007
2008
2009
2010
Revenues
4,481,329
5,245,993
5,282,273
5,420,369
6,286,535
Cost of Goods Sold
2,614,752
2,826,094
2,948,987
3,197,073
3,104,819
Gross Profit
1,866,577
2,419,899
2,333,286
2,223,296
3,181,716
5,513
31,699
70,287
79,037
80,456
568,134
637,785
681,356
659,969
782,944
Office Supplies
53,077
71,527
63,982
64,401
36,418
Bank Charges
113,977
139,403
143,699
149,366
207,467
Advertising Exp/Google Adwords
281,081
368,404
468,364
391,167
523,693
23,051
24,764
35,398
36,482
42,665
413,591
548,585
566,671
542,852
795,022
Rent and Maintenance
45,750
29,085
19,778
13,194
20,093
Utilities
19,724
18,497
26,356
28,361
43,557
Total Travel Fees
20,352
28,087
21,476
19,918
30,355
Professional Fees
23,518
35,931
23,528
19,368
18,637
1,567,768
1,933,767
2,120,895
2,004,115
43,883
20,671
40,517
19,535
1,611,651
1,954,438
2,161,412
2,023,650
254,926
465,461
171,874
199,646
SG&A
Outside Services
Leased Employees
Insurance
Shipping & Handling
Total SG&A Expenses
Total Depreciation
Operating Expenses
Operating Profit
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2,581,307
42,686
2,623,993
557,723
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Interest Expense
1,036
35,853
41,912
41,239
310
1,023
2.86
27.1
254,200
430,631
129,965
158,434
504,440
53,804
134,242
10,994
27,667
81,929
Net Income
200,396
296,389
118,971
130,767
422,511
Addition to Retained Earnings
200,396
296,389
118,971
130,767
422,511
Interest Income
Income Before Taxes
Taxes
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53,353
69.67
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Historical Balance Sheet
2006
2007
2008
2009
2010
Assets
Current Assets
Cash
159,385
73,650
9,003
126,567
26,112
Marketble Securities
0
0
0
0
0
Accounts Receivables
881
-930.8
-3,076
2,547
-15,390
Prepaid Expense
11,286
54,558
94,871
246,354
15,064
Inventory
457,963
1,070,383
1,058,627
1,061,393
1,949,341
Prepaid Corporate Taxes
62,696
15,711
114,717
2,429
81,929
Other Current Assets
21,317
67,306
52,513
36,252
67,007
Total Current Asset
713,528
1,280,677
1,326,655
1,475,542
2,124,063
Buildings and Improvements
287,686
541,535
569,595
580,488
608,517
Accumulated Depreciation
-99,376
-120,047
-160,564
-180,099
-222,785
Construction In Process
119,516
0
0
21,528
39,331
Software
0
0
0
0
0
Accumulated Depreciation-Software
0
0
0
0
0
Other Assets
7,438
7,088
6,739
10,655
11,475
Total PP&E
315,264
428,576
415,770
432,572
436,538
Total Assets
1,028,792
1,709,253
1,742,425
1,908,114
2,560,601
2,597
248,858
223,445
186,698
111,698
Property, Plant and Equipment
Liabilities and Shareholders' Equity
Current Liabilities
Accounts Payable
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Credit Cards
1,017
68,287
49,411
33,765
24,786
Current Portion of Long Term Debt
0
0
0
0
0
Other Current Liabilities
79,824
229,337
276,021
201,456
272,537
Total Current Liabilities
83,438
546,482
548,877
421,919
409,021
Long Term Liabilities
482,420
471,578
459,899
677,876
903,938
Total Liabilities
565,858
1,018,060
1,008,776
1,099,795
1,312,959
Capital Stock
100
100
100
100
100
Retained Earnings
262,438
394,704
614,578
677,452
825,031
Net Income
200,396
296,389
118,971
130,767
422,511
Total Equity
462,934
691,193
733,649
808,319
1,247,642
Total Liabilities& Equity
1,028,792
1,709,253
1,742,425
1,908,114
2,560,601
Equity
Web Direct Brands, Inc. had solid growth and had continuously executed an
aggressive growth plan while remaining profitable, the above data shows profits of this
aggressive growth plan that is includes as expenses, significant investments into
website technology, facilities, website content, and R&D in the form of direct from
manufacture procurement and trial products. Although Web Direct Brands, Inc. has
remained profitable in the past it expects to see greater profits in the future from the
relative long life of these investments. An adjustment to these figures is required to
show a truer financial picture of the profitability of the company. Recasting of the tax
based accounting record will show a truer, more profitability view of the company.
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The retained earnings should have been increased by $428,316.00 to give us a
retained earnings total of $1,247,347.00, in 2010, this adjustment is based on the
following adjustments:

Movement of expenses related to the interior build out of the facilities,
charged off in the same year they will become assets that will be depreciated
over time ($155,591.00)

Reduction of a one-time legal expense ($170,005.00)

Adjustments to equipment charged off in the year of purchase ($34,988.00)

Leased employees whose primary function is building of intellectual property
that will create a lasting return over time will be moved to assets charged off
over the life of the IP ($67,732.00)
These simple adjustments should give a truer picture of the financial health of the
company.
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The Impact of Funding on Web Direct Brands, Inc.
Income statement

Revenues are projected to increase from $7 million in year zero to over$25 million in
year five.

Net income is projected to increase from approximately $530,000 in year zero to
over $3 million in year five.
Income Statement-With Investment
2011
Year 0
Year 1
Year 2
Year 3
Year 4
Revenues
7,014,819
Cost of Goods Sold
Gross Profit
Year 5
9,500,000
13,300,000
18,500,000
24,000,000
29,800,000
3,367,113
4,465,000
6,118,000
8,325,000
10,560,000
12,814,000
3,647,706
5,035,000
7,182,000
10,175,000
13,440,000
16,986,000
Outside Services
96,032
130,053
182,075
253,262
328,556
407,956
Leased Employees
863,876
1,169,926
1,637,896
2,278,277
2,955,603
3,669,873
Additonal Leased Employees
0
410,000
320,000
200,000
150,000
100,000
Office Supplies
61,991
83,953
117,534
163,487
212,092
263,347
Bank Charges
212,403
287,652
402,712
560,164
726,699
902,318
Advertising Exp/Google Adwords
545,297
738,483
1,033,876
1,438,098
1,865,640
2,316,504
Insurance
47,411
64,207
89,890
125,035
162,207
201,407
Shipping & Handling
794,830
1,076,420
1,506,987
2,096,185
2,719,376
3,376,558
Additional Inventory Shipping
0
160,000
120,000
80,000
60,000
30,000
Rent and Maintenance
19,748
26,744
37,442
52,081
67,564
83,892
Utilities
42,653
57,764
80,870
112,488
145,931
181,198
Total Travel Fees
29,824
40,390
56,546
78,655
102,039
126,698
SG&A
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Professional Fees
22,931
31,054
43,476
60,474
78,453
97,413
Total SG&A Expenses
2,736,995
4,276,646
5,629,305
7,498,206
9,574,159
11,757,164
Total Depreciation
42,686
42,686
80,000
80,000
80,000
80,000
Operating Expenses
2,779,681
4,319,332
5,709,305
7,578,206
9,654,159
11,837,164
Operating Profit
868,025
715,668
1,472,695
2,596,794
3,785,841
5,148,836
Interest Expense
Interest Income Marketable Sec
3%/YR
53,353
53,353
53,353
53,353
53,353
53,353
5,000
5,000
5,000
5,000
5,000
5,000
Income Before Taxes
819,672
667,315
1,424,342
2,548,441
3,737,488
5,100,483
Taxes @35%
286,885
233,560
498,520
891,954
1,308,121
1,785,169
Net Income
532,787
433,754
925,822
1,656,487
2,429,367
3,315,314
Dividends
0
0
0
0
0
0
Addition to Retained Earnings
532,787
433,754
925,822
1,656,487
2,429,367
3,315,314
Balance Sheet

Additional cash balance is maintained by the end of year one and through year five
projections providing greater flexibility to exploit for unforeseen opportunities.

Inventory disproportionately increases during the 5 years due to increase in
inventory turnover. Inventory increases from approximately $1.8 million to $6.2
million by year five to support sales projections.

Warehouse expansion in year one and an additional facility rented in Nevada in year
2 to support increased sales projections.
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Balance Sheet-With Investment
2011
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Cash
Marketble Securities
Accounts Receivables
283,579
0
0
1,347,960
0
0
1,460,803
0
0
2,050,275
0
0
3,447,275
0
0
5,275,721
0
0
Prepaid Expense
50,000
60,000
70,000
80,000
90,000
100,000
Inventory
1,800,000
2,850,000
3,350,000
4,200,000
5,000,000
6,200,000
Prepaid Corporate Taxes
286,885
233,560
498,520
891,954
1,308,121
1,785,169
Other Current Assets
55,000
50,000
50,000
50,000
50,000
50,000
Total Current Asset
2,475,464
4,541,520
5,429,322
7,272,229
9,895,396
13,410,890
Buildings and Improvements
Accumulated Depreciation
Construction In Process
Software
Accumulated Depreciation-Software
610,000
-265,471
0
0
0
810,000
-308,157
0
0
0
810,000
-388,157
0
0
0
810,000
-468,157
0
0
0
810,000
-548,157
0
0
0
810,000
-628,157
0
0
0
Other Assets
13,000
14,500
16,000
17,500
19,000
21,500
Total PP&E
357,529
516,343
437,843
359,343
280,843
203,343
Total Assets
2,832,993
5,057,863
5,867,165
7,631,572
10,176,239
13,614,233
Accounts Payable
140,296
190,000
266,000
370,000
480,000
596,000
Credit Cards
Current Portion of Long Term Debt
32,268
0
43,700
0
61,180
0
85,100
0
110,400
0
137,080
0
Other Current Liabilities
60,000
0
0
0
0
0
Assets
Current Assets
Property, Plant and Equipment
Liabilities and Shareholders' Equity
Current Liabilities
Total Current Liabilities
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232,565
233,700
327,180
455,100
590,400
733,080
Long Term Liabilities
820,000
610,000
400,000
380,000
360,000
340,000
Total Liabilities
1,052,565
843,700
727,180
835,100
950,400
1,073,080
Capital Stock
100
2,000,080
2,000,080
2,000,080
2,000,080
2,000,080
Retained Earnings
1,247,542
1,780,329
2,214,083
3,139,905
4,796,392
7,225,759
Net Income
532,787
433,754
925,822
1,656,487
2,429,367
3,315,314
Total Equity
1,780,429
4,214,163
5,139,985
6,796,472
9,225,839
12,541,153
Total Liabilities& Equity
2,832,993
5,057,863
5,867,165
7,631,572
10,176,239
13,614,233
Equity
Expected Results and Target Measures
1. The expected results from improving employee performance and productivity
include:
a. Training program and performance management program will improve
employee productivity by 10%
2. The expected results of improving customer service to increase sales revenue
include:
a. An IVR line will decrease the amount of time customers spend on hold getting
connected to the right department.
b. Online order, payment and shipment tracking will decrease current amount of
incoming calls associated with these items from customers to allow staff to spend
more time with other customer inquiries.
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c. Better website design and layout will enhance navigation to improve sales
revenue by 10%
3. The expected results from improving inventory management and adding overseas
suppliers to increase profit margin include:
a. Establishing and utilizing reorder points and safety stock levels will reduce stock
outs by 50%
b. An inventory management system will reduce excess inventory by 25%
c. Expanding direct shipments from manufacturers and no-touch system will reduce
labor costs by 15%
d. Establishing a remote inventory site by the end of FY 2 will reduce shipping times
to West Coast customers by 60%
e. More overseas suppliers will increase company’s average gross profit margin by
3% by the end of FY 2.
4. The expected results of improving product merchandising and adding new products
to increase revenues include:
a. Branding Web Direct Brands, Inc. will increase sales of other Web Direct Brands,
Inc.’s products by an additional 3%
b. Business-to-business relationships will increase sales by 20% in applicable
stores
c. Expanding the warehouse and increased inventory spending will decrease
shipping times and increase sales by 5% and stock outs by 50% due to reduced
shipping times and increased inventory capacity.
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Our Post Funding Operational Plan
Web Direct Brands, Inc. will use the proceeds of this offering to enhance and
grow the number of their online stores and to increase their profitability. Initial focus will
be to assess the products that have already been identified as having a high potential
for sales volume and profit, to purchase and test those products and to builds a custom
website that will best explain and enhance their competitive advantage.
Web Direct Brands, Inc. will explore successes in direct marketing of the brands
that they own by testing strategic placement of ads in DIY magazines and by direct
mailing to potential wholesale buyers of direct from manufactures purchased items.
Web Direct Brands, Inc. will reduce the cost of doing business by globally
enhancing their customers experience for all of their online stores by creating a world
class online shipping and tracking tool and by enhancing their automated order handling
system to achieve fully automation for orders purchased on the web. Additionally we will
increase sales and customer satisfaction by creating more comprehensive trouble
shooting flow charts, product application tools and broadcast live feeds from their
stores.
Web Direct Brands, Inc. will enhance operations in China to identify more
partners to supply them with quality products. We expect that we will be able to continue
to increase our margins and remain competitive by finding more direct sources for
goods from small to mid size manufactures in china that don’t normally have sales
offices located in the US.
The bulk of the proceeds will be invested to purchase inventory and exercise an
option to repurchase stock.
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Additionally after the initial growth efforts, Web Direct Brands, Inc. will conduct an
extensive search to find individuals with experience in the operations and promotion of a
public concern. Web Direct Brands, Inc. intends to add a director Operations with public
corporation experience to further hone our operations to be in line with the standards of
a public corporation. This position is intended to be addressed when we surpass
12Million in annual sales. Additional a CFO will be added as we approach our
$20Million sales goal. Each of these individuals will be selected for their ability to
contribute to the company in its future form.
Actions Plans - Table of Contents
1
Customer Satisfaction Ratings
2
Create Online Shipment Tracking for our system
3
No Touch System, for automated POs and Vendor shipment tracking.
4
Expand Trouble Shooting Flowcharts for Website
5
Expand Product Advertisements Beyond Online Search Engines
6
Testing of new product lines already identified
7
Develop More Overseas Suppliers for existing stores
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1-Customer Satisfaction Ratings
Objective
To increase customer satisfaction and Web Direct Brands, Inc. knowledge of its
customer’s satisfaction by soliciting customer feedback and making it available to
improve future customers experiences.
Target
Current customers.
Description
•
Create an online survey that solicits feedback from guests that purchase items
regarding their level of satisfaction with the service provided.
•
Create a short email thanking recent customers for making a purchase from Web
Direct Brands, Inc. In the email include the link to the survey asking customers to take
the time to fill it out to provide other customers and the company with feedback that will
be used when making product purchasing and offering decisions.
•
Create a link for each product that allows customers to view how other customers
ranked each product.
•
While the main focus will be to obtain a score for the customer’s satisfaction of a
single product, this should also be used as an opportunity to ask other customer
satisfaction questions.
•
Set up the email to automatically generate and be sent out to customers on an
ongoing basis.
•
Use the results of the surveys to improve customer experiences and identify
areas of improvement opportunity.
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Responsible Party
IT Director, Marketing Director, and IT Specialist.
Timeline
This action plan should be implemented in month two.
Budget
•
Payroll cost to compensate the IT and Marketing Managers to create a survey, a
thank you email with the survey link and links for products on the website
(approximately 4 hours each).
•
Payroll cost to compensate IT developer to create an automated survey link and
type of information being requested (approximately 30 hours).
Success
There is no direct way to measure the success of this action plan. The feedback
provided by customers to improve product offerings and website will be very beneficial
to Web Direct Brands, Inc. Also, research has shown that one of the most effective
ways to increase customer satisfaction in ecommerce is by allowing customer to
customer interaction. This action will allow other customers to provide feedback and
obtain other customer feedback on products before making a purchase and will allow
Web Direct Brands, Inc. to cross promote websites and ask for customer referrals.
2- Create Online Shipment Tracking for our system
Objective
Gives customers the freedom to track their orders, payments and shipments from the
convenience of their own home 24 hours a day on the internet.
Focus
All customers of Web Direct Brands, Inc.
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Description
•
Create a link that customers can access that will give them up to date order and
shipment information.
•
This also limits the amount of incoming phone calls regarding orders and
shipments which will allow more time to deal with more complex incoming calls.
Responsible Party
IT Director. IT
Timeline
This action plan should be implemented in month four.
Budget
•
Payroll to compensate IT developers to create a program that automatically
updates shipping information accessible to customers once the shipping department
processes order (approximately 120 hours).
Success
The success of this action plan can be measured by the savings that will occur due to a
decrease in phone calls regarding orders, payments and shipping. Immeasurable
success will also result from the increase in customer satisfaction from online customers
that want to have information at the touch of their fingertips at all times.
3- No Touch System
Objective
To create more automation and reduce labor costs associated with the processing of
online orders.
Target
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All current and future Web Direct Brands, Inc.’s employees.
Description
Web-Direct Brands will enhance their existing automated order entry system to
encompass all aspects of the order processing system. Essentially when an order is
placed on the internet the proper packing information and shipping labels will print up for
all in stock items. If an item is not stocked or is out of stock a P. O. will be generated
and automatically emailed to the vendor. Additional follow up emails will be
automatically sent to all vendors with outstanding purchase orders. Vendors will update
our system with either an anticipated ship date or a tracking number. Our system will
automatically generate emails to keep customers updated to the status of their order.
The primary benefits of these actions are:
Responsible Party
The IT director and IT developers
Timeline
IT director and will plan create documentation outline the functionality of the system and
identify all existing components that need to be modified and new components that
need to be created within 60 days. IT developers will take about 6 months to complete
the coding and testing
Budget
•
Payroll to compensate IT developers to create a program that automatically
updates shipping information accessible to customers once the shipping department
processes order (approximately 500 hours).
Success
The success of this action can be measured by the savings that will occur due to a
decrease in and essential elimination of labor associated with processing of orders. It
will also be measured by the savings that will occur due to a decrease in labor
associated with updating customers with order information over the phone.
Immeasurable success will also result from the increase in customer satisfaction.
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4-Expand Trouble Shooting Flowcharts for Websites
Objective
Expand trouble shooting flowcharts for web sites to allow customers to use to solve
problems that may be associated with their products or installation of their products.
Target
Customers
Description
To improve Web Direct Brands, Inc. customers shopping experience and the
professional image of its products and business, WDB should develop flow charts for
customers to trouble shoot common problems.
•
Identify common problems that customers call in to request information or
assistance. For example, common problems with the installation and maintenance of
gates, and gate openers should be a priority and would enhance customer satisfaction.
Another example is common problems associated with installation of the pool safety
fence.
•
Develop flow chart to trouble shoot each problem including how to resolve issue.
•
Move flow chart to production.
•
Notify previous customers that trouble shooting flow chart is available.
Responsible Party
Website Developer and Store Managers.
Timeline
This action plan should be implemented during month six.
Budget
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•
Payroll cost to Store Managers to identify and develop flow chart to address
common problems (from 4 to 80 hours per website).
•
Payroll cost to Web developer to link to the flow chart (4 hours/ chart).
Success : The success of this action plan should be measured by how many customers
utilize the flow charts to trouble shoot problems and reduction of calls to address
problems.
5-Expand Product Advertisements beyond Online Search Engine
Objective
Broaden customer base by advertising in targeted media such as email campaigns,
Home improvement websites, direct mail, magazines, radio, TV, newspapers, and
Home Shows, etc.
Target
Marketing Director.
Description
•
Evaluate advertising Gate Crafters and related products and DIY Pool Fence
stores on do-it-yourself networks website, selected magazines.
•
Evaluate options and cost to advertise products in non search media.
•
Produce advertisement for Do-It-Yourself Networks website.
•
Asses advertisement in The Home Improvement Magazine.
•
Expand program to other stores and products if effective.
Responsible Party
CEO, Marketing Director.
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Timeline
This action should be fully implemented within 18 months.
Budget
•
Payroll costs to evaluate advertisement options (approximately 10 hours).
•
Create email campaigns based on past customers and highly targeted groups
(approximately 50 hours)
•
Develop pilot advertisement material for magazine ($2,000).
•
Payment for magazine advertisements ($10,000).
Success
Track number of new customers from advertisement through customer satisfaction
surveys.
6-Testing of new product line already identified
Objective
To use research already completed to bring products to the US market that have been
previously identified as potential high volume sellers. These products generally consist
of DIY products that are in the same caliber of gate openers such as boat lifts, home
shop equipment, sump pumps, decorative glass door inserts, horse fencing etc. and
other high end specialty items such as marble inserts, wet suites, laser levels, etc.
Target
All Web Direct Brands, Inc.’s Customers.
Web Direct Brands, Inc.
Description
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Products identified in appendix C will be purchased from already identified venders and
brought in and evaluated. Products are then sold thru other marketing channels such as
eBay to either dispose of low standard goods or to beta test the products before
investing in website creation.
Responsible Party
Marketing Director and Director of operations in China.
Timeline
Immediate upon funding.
Budget
Although this is essentially a cost free process by recovering cost with the disposition of
the goods, we expect to increase inventory levels. The perpetual additional investment
in inventory could average around $1,500,000.
Success
Success will be measured as the company identifies product lines that websites are
created around.
7-Develop More Overseas Suppliers for existing stores
Objective
To develop more overseas suppliers to reduce the cost of existing or potential new
products.
Target
CEO and Director of Operations in China.
Description
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The CEO should continue to accelerate and explore opportunities overseas suppliers to
develop more relationships and/or partnerships to reduce costs. This would involve
evaluating Web Direct Brands, Inc.’s current product lines to determine which if any
products could be manufactured overseas. Evaluation of the overseas opportunities
would determine if a product could be manufactured overseas and shipped for less cost
than the current product offerings. Opportunities that are determined to be profitable
should be undertaken.
Responsible Party
CEO and Director of Operations.
Timeline
This action should be implemented in month 12.
Budget
•
$50,000.00
Success
Success should be measured by how many products are manufactured overseas and
the cost savings per product and for a one-year period.
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Appendix
Appendices
Appendix A
Competitors Grid
Appendix B
WDB Customer Survey Results
Appendix C
Targeted expansion product lines
Appendix D
Assumptions
Appendix E
Statement of Cash Flow
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Appendix
Appendix A: Competitors Grid
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Appendix
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Appendix
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Appendix
Appendix B: Web Direct Brands, Inc.’s Customer Survey Results
1.
How did you learn about our online store?
Response Count
Response Percent
Friend or relative
2
6.7
Web Search Engine
27
90.0
Banner Ad
0
0
Magazine
0
0
We-based Article
1
3.3
E-mail
0
0
Pop-Up Ad
0
0
Other
0
0
Total Responses
2.
30
Which of our stores did you visit?
Store
Number of Respondents
GateCrafters.com
16
AutoHarp.com
2
DIYPoolFence.com
1
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Appendix
3.
What was the MAIN reason you visited our online store?
Response Count
Response Percent
Browsing
2
6.9
Purchase a Particular
Item
20
69
Comparison of Prices
6
20.7
Other
1
3.5
Total Responses
4.
29
Did you make a purchase from our online store?
Response Count
Response Percent
Yes
28
96.6
No
1
3.5
Total Responses
29
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Appendix
5.
How did you pay for the purchase?
Response Count
Response Percent
Credit Card Online
22
759
Credit Card by Phone
7
24.1
Check by Mail
0
0
Check by Phone
0
0
Company Purchase
Order
0
0
Other
0
0
Total Responses
6.
29
Please rate the following questions.
Very
Easy
How easy
was it to
navigate
the web
site?
48.3%
(14)
How easy
was it to
find a
particular
item you
were
looking
48.3%
(14)
Somewhat Easy
Easy
31.0%
(9)
17.2%
(5)
Somewhat Very
N/A
Difficult
Difficult
0.0%
3.4%
(0)
(1)
Number of
Response
0.0%
(0)
(29)
31.0%
(9)
13.8%
(4)
6.9%
0.0%
(2)
(0)
0.0%
(0)
(29)
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Appendix
for?
How easy
was it to
browse
our
inventory?
44.8%
(13)
How easy
was it to
move
items into
your
shopping
cart?
65.5%
(19)
How easy
was it to
remove
items from
your
shopping
cart?
28.6%
(8)
(9)
10.3%
(3)
17.2%
(5)
13.8%
(4)
3.4%
0.0%
(1)
(0)
0.0%
0.0%
(0)
(0)
3.4%
(1)
(29)
10.3%
(3)
(29)
7.1%
(2)
10.7%
(3)
3.6%
0.0%
(1)
(0)
50.0%
(14)
(28)
How easy
was it to
modify
items in
your
shopping
27.6%
cart. For
(8)
instance
to change
quantity,
color, size,
etc.
How easy
was it to
resume
shopping
after
placing
31.0%
27.6%
(8)
6.9%
(2)
10.3%
(3)
6.9%
0.0%
(2)
(0)
48.3%
(14)
(29)
17.2%
(5)
13.8%
(4)
0.0%
0.0%
(0)
(0)
41.4%
(12)
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Appendix
items in
your
shopping
cart?
7.
(29)
Did you return any items you purchased from our online store?
Response Count
Response Percent
Yes
6
20.7
No
23
79.3
Total Responses
8.
29
How satisfied were you with the following?
Available
Shipping
Options
Very
Satisfie
d
Somewh
at
Satisfied
55.2%
(16)
10.3%
(3)
Satisfie
d
13.8%
(4)
Somewhat
Dissatisfie
d
Very
Dissatisfie
d
13.8%
0.0%
(4)
(0)
N/A
Number
of
Respons
e
6.9%
(2)
(29)
Returns
Process
Overall
Shopping
Experienc
0.0%
3.6%
0.0%
7.1%
7.1%
(0)
(1)
(0)
(2)
(2)
65.5%
(19)
3.4%
27.6%
(8)
0.0%
3.4%
(0)
(1)
(1)
82.1
%
(23)
(29)
0.0%
(0)
(29)
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Appendix
e
9.
Into what age category do you fall?
Percent
18-30
31-45
46-54
55+
3.4%
37.9%
20.7%
37.9%
(1)
(11)
(6)
(11)
Number (29)
10.
What is your gender?
Male
11.
Female
86.2%
13.8%
(25)
(4)
What is your educational level?
High School
Some College
Associate
degree
Undergraduate
degree
Graduate
degree
6.9%
20.7%
13.8%
13.8%
44.8%
(2)
(6)
(4)
(4)
(13)
6.9%
20.7%
13.8%
13.8%
44.8%
(2)
(6)
(4)
(4)
(13)
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Appendix
12.
Do you rent or own your home?
Rent
Own
0
29
13.
How many hours per week are you online or use the web for uses other than
email?
Response Count
Average Number of Hours
29
14.
11.69 hours
What percent of your non-consumable purchases made on the internet?
Response Count
Average Percent of Purchases
27
28.52%
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Appendix
Appendix C: Targeted Expansion Product Lines
Air conditioner UV sanitation
$12,000.00
This product is a UV light that is installed inside an air conditioner to stop mold at its
source, the evaporator. Each unit should cost about $24.00 and sell for about $150.00
Water Purification
$15,000.00
This will be an expansion of our existing reverse osmosis line expanding into larger
homes and light commercial, also addressing different forms of sanitation and
desalinization.
Battery Backup sump pump
$9,000.00
This line will use our existing battery charge technology to solve sump pump issues
during power outages that are likely when storming. Cost about $26.00 and sell for
about $140.00
Battery boat lift solar or trickle charge
$10,000.00
Use a small trickle charger that will charge a battery for a boat lift, this will save
$1000.00 in power line installation. You can even use solar.
New line of gate openers
$60,000.00
We will use our proven knowledge in the business to form a complete solution for a
whole product line.
Commercial sewing machines
$8,000.00
We will position ourselves a step above home machines but not as expensive as US
branded commercial machines. Both home enthusiast and small businesses will love
us.
Wood end tables/pet crates
$12,000.00
You can crate you dog in the common area of the house without the ugly crate. This
product line is perfect for our marketing model.
Portable toilets
$6,000.00
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Not too exciting of a business but every camper should have one. Cost about $14.00
and sell for about $70.00
Small commercial food processing equipment
$25,000.00
WE will specialize in corn thrashers, soybean processers and other boutique type
machinery for the serious home growers and micro farmers
Foldable gas patio heaters
$ 6,000.00
Patio heaters are only useful part of the year, ours will fold up for off season storage.
Porcelain steam table pans
$15,000.00
Very clean and elegant, this specialty pan will become popular in higher end buffets and
country clubs
S/S steam table pans
$15,000.00
This standard of the industry will complement our Porcelain line.
Food dehydrators
$ 6,000.00
This line will be a good line for our marketing model
Industrial fans
$8,000.00
This line will fill a niche need and will be searched online by our customers to find a
good value
3D wall coverings
$10,000.00
Hard to find and complements our heavy goods in shipping, it also has great markup
Granite globes
$12,000.00
This item is very specialized and has a huge markup, complements our light products in
shipping
Slate snap together tiles
$10,000.00
Slate tiles have great Markup and blends together with our existing wood tiles, ships
well with lighter items
Retractable awnings
$15,000.00
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Appendix
Tested and proven product that it’s time has come.
Low voltage DIY channel letter signs
$23,000.00
Limited stock letters and custom orders available, low voltage and DIY friendly
Power flush toilet hardware
$10,000.00
Product has a great application for clog prevention and water saving
Automatic toilets
$ 6,000.00
Just plain cool, I’ve experienced one in a Hotel and want it!
Urethane crown molding
$ 8,000.00
Looks as good as wood and is easier and cheaper, and besides who will know that far
up on the wall
Baby monitors
$2,500.00
Cheap ones are cheap, goods ones are outrageously expensive. We will serve the
middle of the road.
Video R/C helicopters
$20.000.00
Very specialized and wide open for the professional line.
Cabinet organizers
$30,000.00
Chrome plated wire for interiors of kitchen cabinets, great product and great DIY project.
Log splitters
$30,000.00
An opportunity to save energy cost for the rugged lifestyle, great brand name motors
available.
Tajine cookware
$ 2,500.00
Indonesian cookware that is the next great fad.
Vacuum sealer
$10,000.00
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Appendix
A product that we have good sales on now and need a supplier to give us better
markup.
Automated head and eye massager
$5,000.00
Great marketplace item and good branding opportunity
Ipad holder
$2,000.00
Good possibility for quick profits, can be followed with other models
Small commercial mixers
$5,000.00
Sold well in the past, needs branding and consistent supply.
Whipped cream makers
$4,000.00
Sold well in the past and good for Marketplaces
Pasta Makers
$3,000.00
Good niche item that will sell well on marketplaces also
Professional espresso machines
$10,000.00
First found in china ant ¼ the cost of Italian
Fabrication table an tools
$10,000.00
Product that will pay for itself in labor cost. Nice addition to any welding shop.
Aluminum scaffolding
$30,000.00
Low number of sku’s and item that OSHA will love.
4 wheel dolly sets for cars
$ 6,000.00
A car enthusiast dream for organizing his shop.
Professional lever orange juicer
$2,000.00
Nice Durable product
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Appendix
Aluminum bubble wrap insulation
$10,000.00
Energy saving easy to ship and will never break.
Solar pool pumps
$ 7,000.00
Why not, it is easy to engineer and pumps are needed most in the summer when the
sun is out
Pasta drying racks
$ 2,000.00
Great complementary item and would sell well in the marketplaces
Flower carts
$ 8,000.00
For both home use for the serious grower and light commercial
Baby scales
$ 3,000.00
Nice specialty item for marketplaces and branding
Station poles
$20,000.00
Good specialty item, when people need them they usually need a lot of them
Large commercial tents
$30,000.00
Some stocked items, mostly special order. Good possibility for rental suppliers
Inflatable promotional items
$2,000.00
All specialty special order items (blow up airplanes, beer bottles etc, custom printed)
Outdoor kitchens / built in BBQ’s
$15,000.00
High margin specialty appliances and higher margin custom fabricated frames for the
DIY market.
Cigarette bins
$8,000.00
Better quality than the plastic ones great for restaurants and office buildings
Floating docks
$20.000.00
Quick, Easy and great DIY project
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Appendix
Cut/needle proof gloves
$6,000.00
Specialty item hard to find and high margin, they will come to the web!
Small business security video equipment
$30,000.00
Custom designed packages and knowledge only found on the web
Skim/wake boards
$3,000.00
Fun Item targeted to today’s web surfers
Sports flooring
$12,000.00
Nice DIY project for the sports enthusiast
Tricycle sign displays
$10,000.00
These signs would be great for advertising in urban and resort areas. Promote the
green lifestyle.
Tomato milling machine
$12,000.00
It’s time for a better “cult” tomato milling machine. The Squeezo is cheap in quality and
overpriced
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Appendix
Appendix D: Assumptions
The following assumptions were used in the financial forecasting for Web Direct Brands,
Inc.:

The sales forecast method used in determining the most likely revenues was the
build-up method (appendix).

There are no other or miscellaneous accounts.

All accounts are cash accounts except for accounts payable and accounts
receivable, which are accrual accounts.

Depreciation is straight line depreciation with zero salvage value:
o Buildings and improvements 20 year life
o Machinery and equipment 5 year life
o Software 3 year life

Fixed costs include office supplies, insurance, rent and maintenance, utilities,
professional fees, other current assets, other assets, and other current liabilities.

Variable costs include cost of goods sold, outside services, leased employees,
bank charges, advertising expense & Google Adwords, shipping and handling,
and credit cards.

Long term debt at 7% for seven year terms with equal monthly payments.

Prepaid taxes are written off monthly.

Prepaid expenses are written off 1/12 per month.

Cash in excess of the highest monthly SG&A for that year are invested in
marketable securities, which earn 3% interest yearly.

Net inventories are the current month’s cost of goods sold divided by the
inventory turnover ratio.
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Appendix
Appendix E: Statement of Cash Flow
Statement of Cash Flows
2011
Year 0
Year 3
Year 4
Year 5
925,822
1,656,487
2,429,367
3,315,314
80,000
80,000
80,000
80,000
0
0
0
0
0
-10,000
1,050,000
-10,000
-10,000
-10,000
-500,000
-850,000
-800,000
-10,000
1,200,000
53,325
-264,960
-393,435
-416,166
-477,048
Year 1
Year 2
532,787
433,754
42,686
42,686
(Increase) Decrease in A.R.
-15,390
(Increase) Decrease in Prepaid Expenses
-34,936
(Increase) Decrease in Inventory
149,341
204,956
Net Income
+ Depreciation
(Increase) Decrease in Prep. Corporate Taxes
(Increase)Decease in Other CA
12,007
5,000
0
0
0
0
Increase (Decrease) in A.P.
28,598
49,704
76,000
104,000
110,000
116,000
7,482
11,432
17,480
23,920
25,300
26,680
=Cash Flow from operations
517,619
-464,099
324,343
610,972
1,418,501
1,850,945
(Increase) Decrease in PPE
36,323
-201,500
-1,500
-1,500
-1,500
-2,500
0
0
0
0
0
0
36,323
-201,500
-1,500
-1,500
-1,500
-2,500
212,537
-60,000
0
0
0
0
0
0
0
0
0
0
-83,938
-210,000
-210,000
-20,000
-20,000
-20,000
Dividends
0
0
0
0
0
0
Change in Treasury Stock
0
1,999,980
0
0
0
0
296,475
1,729,980
-210,000
-20,000
-20,000
-20,000
Beginning Cash
26,112
283,579
1,347,960
1,460,803
2,050,275
3,447,275
+Change in Cash
257,467
1,064,381
112,843
589,472
1,397,001
1,828,445
Ending Cash
283,579
1,347,960
1,460,803
2,050,275
3,447,275
5,275,721
Increase (Decrease) in Credit Cards
(Increase) Decrease in Marketable Securities
=Cash Flow from investing
Increase (Decrease) in Other Current Liability
Increase (Decrease) in Cur. Port. of LTD
Increase (Decrease) in LTD
=Cash Flow from Financing
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Reference
Research & References
1.
Allison, W., & Hundley, K. (2007, June). SPTimes.com, Again, China-made
goods may face recall. Retrieved 21 September 2007, from Web site:
http://www.sptimes.com/2007/06/15/Worldandnation/Again___China_made_g
o.shtml
2.
Burns, E. (2007, August). Top 10 Search Providers, August 2007. Retrieved
20 September 2007, from Web site:
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