Don’t Get Left Behind

Business Opportunity  Left-handed people are an often forgotten population.  Most of the time, they must learn to adapt to right-handed products in their daily lives.  7-10% of population and growing

Unique Value Proposition  Online retailer selling products geared to the left-handed individual.  Aggregate all of the existing left-handed products already on the market.  Work with manufacturers to provide exclusive solutions to products not currently addressed by competitors.  In addition to website, become an Amazon.com merchant.

Examples of Exclusive Products  Smart phone apps that reverse the orientation of swipe to unlock.  Wrist watches with buttons arranged on opposite side.  Witty t-shirts about left-handed life

Target Market  Any individual that is left-handed  Any individual that cares about someone that is left-handed.  Includes babies all the way up to people looking for caskets with hinges on the opposite side.

Production & Distribution  Suppliers will be: Manufacturers already in the business of creating left-handed products Manufacturers of right-handed products to create the left-handed counterparts.  Sales will be: Via South Paw’s website Via Amazon.com

Economic Model - Revenue Drivers and Profit Margins  All major revenues will come from sales Capitalize on niche market and making them feel special  SPP will be a conglomerate seller Just like zappos.com does not make shoes, but sells them online  SPP will try to make exclusive contracts with vendors Both parties benefit – vendors sell their excess left- handed items; SPP purchases at a discount

Economic Model - Fixed and Variable Costs  Majority of all costs will be variable Shipping, COGS, taxes all dependent on product/sale  Staffing costs will be minimal Partners will each do their share of business at no cost  Largest non-website fixed expense will be storage Estimated no more than $100 month  Other possible non-website fixed expenses Administrative Expenses: ~$200 Anything else?

Economic Model - Start-Up Costs: Non-Website  Start-Up Costs are anticipated to be fairly low compared to most retail businesses as there is no physical retail location  Partners will use personal computers and cell phones for coordination  Non Web-site Start Up Expenses Market Research Study = $1000 Storage Solution = $100/mo + $100 deposit Administrative Set-Up = $500

Economic Model - Start-Up Costs: Website

Economic Model - Breakeven Analysis: Fixed Costs  To breakeven for the first year, using the estimates for a small online store of less than 100 SKUs:  Fixed Costs = $6900 Website Costs - $2800 Market Research - $1000 Storage (full year) - $1300 Admin Costs (full year) - $1800  An exact number of sales is difficult to calculate as each product sold will have a different contribution margin (examples on the next slide)

Economic Model - Breakeven Analysis: Example Products  Left Handed Kids’ Safety Scissors Sales Price (includes ‘free shipping’ to customer)$6.99 Our Cost including shipping, fees, processing-$2.90 Shipping Cost-$1.95 Processing Fees-$0.21 Contribution Margin=$1.93  Adult Fiskers Brand 8” All-Purpose Scissors Sales Price (Fiskars’s MSRP of $13.15)$14.99 Our Cost including shipping, fees, processing-$6.10 Shipping Cost-$1.95 Processing Fees-$0.60 Contribution Margin=$6.34 Once a full line of products is established, an estimate of demand for each product can be generated. The Market Research that would be conducted prior to launch would allow South Paw Products to more clearly define a breakeven point, but without that research, any product demand would just be a guess.

Economic Model - Profit Durability  Limited entry barriers Opening an online store is a well defined  Minimal lead time Tailoring web store shell should take less than 3mos Limited product quantities to start require less than 1 mo Most lead time needed for market research  Demand will only increase over time Market is far from saturated As more “South Paws” learn about store, orders will increase

Marketing Strategy  Advertising Google search results Amazon search results Branded apparel worn by customers  Promotion Price-match against right-handed equivalent product for first 12 months. $50 credit for any request that results in a product.

Pricing  Medium to low cost retailer  Pricing will average between 10 to 25% over cost for each product.  A more precise pricing model will be determined after further market research on a product by product basis.

Startup Needs Startup CostsPeople, Talent, Skills  Website - $60,000  Warehouse - $45,000/yr  Inventory - $10,000  Insurance - $2000/yr  Web Designer (outsourced)  Inventory manager  Accountant (outsourced)  Customer Service Rep.

Set Apart From the Competition  Providing innovative left-handed products that are not currently available from other left-handed retailers  Take product requests from customers R&D department to make these a reality  Partnering with existing manufacturers to produce left-handed versions of products Ex. Left-handed Fossil wrist watch

Market Trends  The majority of initial sales would come from those with a selective demand (repeat sales) for these types of products  South Paw seeks to attract a larger number of customers through primary demand. Initially these sales will be low  After recognition of unique product, primary demand sales will increase

Market Segmentation  1 segments is the repeat purchaser of left- handed goods; this customer is left-handed and uses left-handed products that must be replaced on a regular basis  Another segment is the left-handed customer who purchases goods infrequently; this customer typically puts up with right-handed goods most of the time but will occasionally make a purchase to add some innovative left-handed solutions to augment his quality of life

Market Segmentation Cont.  South Paw is confident in its ability to take these infrequent buyers market share away from other retailers through dynamic marketing & unique products  Friends, family member, or significant other of a left-handed person. This segment of the market is looking to buy a product that expresses the uniqueness of the individual receiving the product

Market Segmentation Cont.  By offering different types of products that no other left-handed product offers, South Paw is confident in its ability to garner a significant portion of gift purchases  The quality and unique products will ensure these customers return to make these type of purchases