After our Contemporary Commerce Week in Rotterdam (from 14th – 18th May), we have decided to split the starting of the company into 2 phases. Phase one consists of us both selling the boxes through our e-commerce individually without having any staff members. We will stay in phase 1 until we gain enough clients and numbers that will help us upgrade to phase 2.
Phase 1 – We will be increasing the number of clients gradually as Rodrigo and Denis sell the boxes from phase one (50 boxes), during this phase we will be relying heavily on marketing strategies that will help us gain more exposure to sell more units.
Phase 2 – On the first quarter, we are expecting to sell 3,000 packages. As for the second quarter, we will be selling 3,500 packages. For the third quarter, we will be reaching 4,500 consumers. Finally, for the last quarter, we will be selling 5,000 packages. All the sales in those four quarters total up to 15,500 packages for 15,500 consumers.
These numbers might vastly change as we are expecting each client to make another order the next quarter. It is ideal for our business plan to have the consumer order 1 package every three months or every quarter. Hence why it might be very important for us to include the same amount of the previous quarter plus an extra order of inventory.
COSTS – Phase 1
We have calculated the essential costs that we have to cover for the first 50 boxes where we he a cost of 11.34 Euros for each box. In the first phase, the costs of the box will be broken down as the following:
• T-shirt €9.00 (small, medium, large)
• Socks €6.00 (39-42, 43-46)
• Underwear €10.00 (small, medium, large)
• Box €1.60
• Sticker €0.34
• Paper €0.1
• Delivery €1.00
• Total €28.04
• Tax €5.88
• Grand total €33.93
• Selling Price €40.00
The revenue for the first 50 boxes will be €2,000.00. The cost for those 50 first boxes will total up to €1696.42 and the net profit is €303.58. This step will help us gain exposure among our target audience, and it will help us test and re-evaluate the business plan further. After this phase, we aim at expanding our inventory to be worth 100 boxes. And that will increase or net profit to €607.16.
COSTS – Phase 2
When we reach phase 2 of the sales, we will start having further costs such as office supplies, electricity, internet and such. Then we start ordering the inventory in bulk, we will start with 3,000 units for the first quarter, and then 3,500 units for the second, 4,000 for the third, and 5,000 for the fourth. We have broken down our costs and projections for 3 years and they are as follows:
Year one – The costs for year 1 total up to €6,265 a month and €18,795 quarterly, which leads to an annual cost of €73,740.
Year two – The costs for year 1 total up to €8,105 a month and €24,315 quarterly, which leads to an annual cost of €97,260.
Year Three – The costs for year 1 total up to €10,185 a month and €30,555 quarterly, which leads to an annual cost of €122,220.
The costs increase annually because we aim at increasing the size of our staff according to the increase in inventory that we will have. As we have mentioned earlier, we will be ordering different quantities for each quarter until we reach a final quantity of 5,000 units, we will maintain this number of 5,000 for year 2 and year 3 quarterly.