Operations and Logistics

The first operation and step for us are ordering the inventory from our supplier and partner by the supply manager. Then our next step is sorting the inventory according to the item that we have received; it is important to sort the inventory and make the job easier and faster for our staff members in the warehouse to fill the packages and this whole operation is monitored by the production manager. We will have a facility designed especially for this operation. The main source of information and order is strictly from the e-commerce; our clients have the responsibility of providing us with their preferred item, size, address, delivery schedule, and payment information. This information is then sorted out by our staff members in the logistics department. Then our staff members move on to preparing these orders according to the delivery schedule that is provided by the clients; the box is sorted, filled, stamped, sealed and shipped to the client by our courier partner.

The sales department then is responsible for managing the process of the sales transactions and implementing strategies to optimize sales, acquire new clients, and it is a direct link between the product and building relationships with customers. The accounting department is responsible for providing accounting services and financial support for the company, it records accounts payable and receivables, inventory payrolls, fixed assets and other financial elements. They also review the records of each department to determine their position within the company. Our marketing department promotes the company and business and drives our product sales through our ads and website. It will also do all the necessary research to identify target customers and potential opportunities. Our HR department will be strategically managing the people within the business, this can include recruiting and hiring new employees, and organising perspective compensation packages. Finally, our IT department will be responsible for the maintenance and installation of network systems within the business, it will also oversee the actions on the website and support the e-commerce. It will also constantly evaluate the different elements that enable the e-commerce to operate smoothly.

We will also be working separately with a law consultant to make sure that all our logistics and operations are done according to the book and legal.

Below is a structural chart. 

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E-commerce, Up and Running (kind of)

Our e-commerce site is the first place where our clients will interact with us. We want to keep the website as easy as possible for our clients to provide us with all their info that we need in order for us to deliver them the boxes in the specifications they have ordered.

When our clients select the box they wish to buy, another page appears. In this page our clients will be able to select what they wish to have; they can choose to have 3 of each item, or they could have 6 of one item along with 3 of another or they can choose to have a whole box that contains 9 items of one thing.

Then the final step would be the checkout page where our client is ready to go and what is left now is to add the bank information. For now, we are in the process of finalizing this e-commerce site. We still have to work with our developer to find the best solution for our clients to create a profile on our website where they will provide us with their address, sizes, and how many times they would like to receive this box. We also would like to create an opportunity for our clients to buy our box for another end user. These are all issues that we are resolving at the moment with our developer.

here is the link for the e-commerce: https://mainlybasic.com/

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Splitting Into 2 Phases

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.

 

Design Thinking Week 2018

We are very happy to have participated in the Design Thinking Week 2018. It was very interesting to work alongside with the MIDI students and 2 other guest participants from Doctors Without Borders!

Throughout this week (March 12th – March 16th) we have discovered many things that we haven’t thought of that could make our start-up better. For this week, we were required to provide a challenge that we believe we are struggling with; we believe we are struggling with approaching our consumers through the e-commerce.

Through the stages of design thinking, we have learned that our end consumer is not necessarily our user. A person can order the MainlyBasic box for another person. For instance, a young man can create an account or an automated delivery for his father so that he does not have to go to buy basic clothing. Or, a wife can register her husband as well for this service. Moreover, a mother can also register her son for this service (we know this is weird considering that our target demographic is from 25 – 45, believe us, this is possible.)

Another insight that we have discovered is the importance of a pop-up store. These stores are the only chance where our consumers get a chance to see our boxes physically; hence why we believe this an important bridge that connects MainlyBasic to its demographic. We also discussed having these pop-up stores in airports and hotels, as these points can have many men who are willing to grab these boxes as they have free time while they wait for their next flight. In hotels, we believe that we can sell these in hotels as they can be sold through the hotel for their clients.

After going out to test these ideas with people who can be potential clients of ours, we discovered that many people already have their basic clothes packed in their carry-ons or luggage, and are not willing to carry more weight. If they do carry more, they’d rather carry something from the duty-free. So, we decided to completely change our target for this challenge and the location for the pop-up store. We finally decided to set our pop-up store in gyms as this a vital location for men where they attend to regularly throughout the week. Also, it is a place where men shower and change close, therefore; it is a good occasion to remind the men of the chance to be part of our company and create a connection with them.

A final insight that we unraveled through our discussions was the possibility of opening a business to business channel. For instance, a hotel can partner with MainlyBasic where it would be possible to purchase our products at a certain rate in order for them to offer more for their clients. Or, a potential football team can partner with MainlyBasic to offer basic clothing for their team players. We believe that this channel can carry so many opportunities and value for both MainlyBasic and other businesses.

Finally, on the Friday of that week, we were asked to present our work and design thinking process for our company. We were so happy to have our partners for the week to go and present this project in a very successfully funny approach. The other participants from other projects were very interactive and amused by the way our partners presented, and with them, we managed to score a third place in term of best projects according to the participants’ votes.

e-commerce

We have started building our e-commerce using Shopify. We believe that our main challenge now is creating the dynamics of payment systems in order to be able to sell the boxes when they are ready and packaged. 

We are looking forward to Design Week where we will be targeting issues that could rise with the e-commerce as we need to learn more about how the e-commerce can be used as per to the standards that we are expecting. 

We are also looking forward to understanding what are the best ways to have this e-commerce connected with as many end consumers as possible. It is also important for us to understand what works and what doesn’t work for our consumers so that we can evolve MainlyBasic according to their needs. 

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