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  • 1. Business Plan Online sales.com Adam W. M. Céline T. Andrei C. Z. Kristaps K. University of Ottawa March 21, 2007 Copyright. Adam W. M., Kristaps K., Céline T., Andrei C. Z., Ottawa, Canada. March 2007.
  • 2. Table of Contents 2
  • 3. 1.0 The Business 1.1 Business Opportunity Businesses all over the world have inventories they cannot sell. The holding of such inventory until a seller can be located constitute large financial burdens to these organizations. Other companies may not have excess inventory problems, but rather their sales forces are operating at maximum capacity and therefore their potential for sales is diminished. Furthermore, finding new clients within markets away from their home operations is a problem for firms all over the world. 1.2 Business Description Online Sales meets these opportunities by allowing companies from around the world to list excess inventory for sale, bulk inventory and general products they want sold on the website. The general public uses the website to search for these companies’ products and sell them on their behalf for a commission. In general our business is a virtual consignment and wholesale/liquidation shop. Our business allows companies to quickly and easily sell their excess inventory or to find new clients for their products; thus saving companies’ money and generating extra revenue. Members of the public can earn another source of income. The primary function of our business will be the wholesale/liquidation of inventory. 1.2.1 Company Mission: Online Sales’ mission is to become the largest online wholesale/liquidation/consignment businesses, offering companies a cost effective and efficient way to sell their products and inventories, while empowering the public to sell those products for financial gain. 3
  • 4. 1.2.2 Business Stages: 3-Year Plan Online sales will begin operations and plans to generate over $4 millions in revenue within a three year period. Online Sales has also set a goal of reaching 200,000 people visiting the website each month by the end of year three. 1.3 Business Model Customers The customers are the general public who uses the website to search for goods to sell to other customers (end users). They find people to buy products listed on the website by our suppliers and earn a commission off the sale. They can also purchase the good themselves and re-sale it to earn a profit. 4
  • 5. Customers Customer’s (end users) These are the end users who purchase the products sold to them by our customers. Suppliers Suppliers are companies that have excess inventory to sell or products they want help selling. They list products and ship them to the end user or customer once a sale has been completed. They receive payment once goods have reached their target, minus sales commissions. Suppliers Supplier’s These are the companies that make our suppliers products Online Sales We allow for customers and suppliers to exchange information and arrange the sale of goods. We earn a commission off of each sale as well as act as the mediator for the exchange of money between the end user, customer and supplier. 1.4 Competitive Advantage 1. Products offered on online sales will be discounted lower then they can be found anywhere else on the internet giving end users reason to use our service over dealing directly with the suppliers. 2. The online consignment model Online Sales uses allows companies to quickly sell off excess inventory reducing their costs, moving away from this system would mean greater costs for organizations making them reliant upon Online Sales. 1.4.1 Value Proposition: Suppliers and customers have many different ways they can interact with our site and receive value, here are a few examples. 5
  • 6. 1. The users (customers) of the website will gain value by earning income through commission they earn by selling our suppliers products. A simple $4000 sale would earn them $120 with just a 3%commission. 2. Savings we will create for the companies who need to keep their excess inventory in the warehouse sales force costs. We basically provide a free (5% commission, but they make commissions anyway) service. 3. Our website will contain sections where people can post the lists of things they are looking which 1.5 Company Status The company is currently in the planning stages. A new company name is also being considered. 2.0 Management and Organizational Structure 2.1 Management Team Adam Moede, CEO. With a family background in entrepreneurship, Adam is up to the task of operating a business. He will be responsible for overseeing the daily operation of the company and future strategic decision making. Kristaps Kuplais, CFO. With over 3 years of experience in accounting roles, Kris is well equipped to take on the challenging role of Chief Financial Officer to control the finances of our company. Andrei Zagrean, CMO. Andrei will be responsible for business development and online advertising and marketing strategy. 6
  • 7. Céline Tacnière. Céline will be responsible for identifying customers needs and play a strategic role in the day to day operations, while acting as the administrative help for the executives. Mohammed Saheb, COO. The Chief Operations Officer will be responsible for the daily operations, upkeep and development of Online Sales website and its servers. 2.2 Employees IT Professional The IT Professional will work closely with the COO to keep Online Sales technology infrastructure operational. They will report directly to the COO. Customer Service Representative The Customer Service Representative will be responsible for answering customer and supplier inquires either by email or through a dedicated telephone line. 2.3 Board of Directors Online Sales’ board of directors will consist of five individuals; the CEO, a member from the law firm representing Online Sales and three CEO’s from Canadian ecommerce firms. The four external members will provide guidance to Online Sales. 7
  • 8. 2.4 Organizational Structure Board of Directors CMO COO CEO CFO Customer Service Rep IT Professional 2.5 Ownership and Legal Structure The four founding partners will each maintain an equal share and control of the business at 25% each. A founder’s agreement will be signed in order to establish each partners’ responsibilities. The company plans to incorporate as a privately held Canadian corporation. 2.6 Intellectual Property and Licenses The corporation’s name “Online Sales” will be registered using the “Newly Upgraded Automated Name Search” (NUANS). 8
  • 9. Articles of Incorporation are required to be submitted to the Federal Corporations Directorate and registered.1 The entire process is to be completed online. The domain name “onlinesales.com” needs to be registered with Internic.ca. The domain extensions .ca and .com and will be registered. 2.7 Service Providers Law Firm The law firm Osler, Hoskin & Harcourt LLP will represent Online Sales, located in major Canadian metropolises. Osler, Hoskin & Harcourt LLP specialises in business and ecommerce law. Online sales will consult them on any legal matters. 3.0 Industry/Market Feasibility Analysis Online Sales operates online, however it will operate within the offline wholesale industry, the retail industry and the non-store retail industry since it will source it its vying for the same customers and use the internet simply as a means to facilitate transactions, reduce costs and find clients. Wholesale agents and brokers will buy and sell merchandise owned by others for a fee or commission basis; they do not take title to the goods they buy or sell, and they generally operate at or from an office location.2 Wholesale merchants do take entitlement; they are still included in the market analysis since the goods that make up this industry can be sold through our business. The retail trade sector comprises establishments primarily engaged in retailing merchandise, 1 http://www.newbusinessnow.com/information/incsteps.htm 2 http://stds.statcan.ca/english/naics/2002/naics02-class-search.asp?criteria=41 9
  • 10. generally without transformation, and rendering services incidental to the sale of merchandise3. Retail is included in our analysis, however only part of the industry could actually use Online Sales. Given the statistics available, it is impossible to distinguish exactly what industries within the retail sector would use Online Sales. 3.1 Canada Industry Overview 3.1.1 Current Market Development Wholesale Total sales by all wholesale trade groups were $501,035 billion in 20064. As of 2006 there were 52,644.8 Canadian wholesale inventories5. The wholesale industry in Canada represents 6.4% of total GDP6. Retail Total sales by all retail trade groups were $391 billion in 20067 Total non-store retail revenues in 2004 were $11,845,350. Within four years this sector has gown 14%8. Total retail sales dropped to $276 million in 2006 when supermarkets, convenience stores and gasoline retail were removed. 3.2 United States Industry Overview 3.2.1 Current Market Development Wholesale Total sales by all wholesale merchants in all trade groups in 2005 were over three trillion dollars9. Total wholesale sales have grown 64.45% in ten years from 199510. In 2004, US$451 3 http://stds.statcan.ca/english/naics/2002/naics02-class-search.asp?criteria=44-45 4 http://www40.statcan.ca/l01/cst01/trad20a.htm 5 http://www40.statcan.ca/l01/cst01/trad22a.htm 6 http://strategis.ic.gc.ca/epic/site/whol-comm.nsf/en/qu00011e.html 7 http://www40.statcan.ca/l01/cst01/trad15a.htm 8 Appendix A 9 http://www.census.gov/compendia/statab/tables/07s1039.xls 10 Appendix A 10
  • 11. million worth of wholesale sales was done through e-commerce11. In the United States, merchant wholesale e-commerce sales reached $270 billion in 2001 despite the fact that total sales for this industry declined; this was a 12% increase over the previous year12. Retail The retailing industry is the second largest industry in the United States. Total retail sales in 2005 were $1.780 Trillion; minus Food/Beverage stores and general merchandise stores, total sales falls to $768 billion13. 3.3 Industry Trends Wholesale • Retailers are attempting to bypass wholesalers to source cheaper goods directly with the manufacturer14. • Wholesalers are increasingly small firms with 50 or less employees15. Wholesale sales in Canada have been generally climbing in 2001, after levelling out during the latter half of 200016. Retail Increased wages will lead to increased consumer spending. Workers will continue to leave the retailing sector in search of better work, creating a labour shortage. 11 http://www.census.gov/compendia/statab/tables/07s1038.xls 12 http://strategis.ic.gc.ca/epic/site/whol-comm.nsf/en/qu00017e.html 13c http://www.census.gov/compendia/statab/tables/07s1018.xls 14 Merget – The North America Retailing Sectors 15 Merget – The North America Retailing Sectors 16 http://strategis.ic.gc.ca/epic/site/whol-comm.nsf/en/qu00011e.html 11
  • 12. Retail sales are climbing in Canada. The many factors underpinning retail growth include growth in markets brought about by increased population, rising incomes and the formation of new households Retail sales are climbing. The many factors underpinning retail growth include growth in markets brought about by increased population, rising incomes and the formation of new households17 3.4 Industry Analysis 3.4.1 Porters Five Forces Analysis Entry Barriers The construction of a fully operational website will take a large amount of time and of capital, but not enough to be a substantial barrier to entry. Given that the business operates online with little in the way of physical infrastructure, the costs are not a significant issue. Trust is a major concern because new companies will find it difficult to get users to use the service since it is not recognizable. Competitive Rivalry The industry in growing but not at a huge rate. There are many wholesalers and retail operations within the North American industry; however not many wholesalers are operating online. This lowers the competitive market for online wholesaling. Retail operations are increasingly moving online however. There are very few barriers to exit for wholesalers since they are made up of offices and warehouses. Bargaining Power of Suppliers Since in the case of Online Sales the suppliers will be using the website to reduce their inventory costs or source new clients, the benefit they receive outweighs ours. They do have the option to use offline wholesalers and sales methods; however they can save money and time using this 17 http://strategis.ic.gc.ca/epic/site/retra-comde.nsf/en/h_qn00156e.html 12
  • 13. service. There is also little threat of forward integration. Overall the bargaining power of suppliers is low. Bargaining Power of Buyers The buyer has little bargaining power since there is low concentration, our service offers them a price benefit, they may buy large volumes but the discount is already applied for them. Switching costs may be moderate because it would be difficult to find some of the products being offered another way. Threat of Substitutes There is a great deal of substitute’s offline; however there are not many substitutes for online wholesaling. There are many online retail sites however. Overall substitutes are moderate too high. 3.5 Competitor Analysis There are few direct competitors to Onlinesales.com. The closest competitor is liquidation.com which is an online wholesale action site. It offers roughly the same service except it relies on the end user to come to the site and requires users to wait out a bidding process. Someone must already know what they want and take the time to attempt to get their products. At the same time prices for goods can continue to increase. Overall the two services have enough differences to not cause any problems. Offline wholesalers are unlikely to be a major competitor since Onlinesales.com offers greater value over their service. 4.0 Marketing Plan 4.1 Product/Distribution Strategy 4.1.1 Product Description 13
  • 14. The core product of Online Sales is its website. Onlinesales.com has two main functions. First it allows companies to list excess inventory or regular products they want sold on the website. Second the general public can come to our website and view the products/inventory that the companies have listed. That person can then attempt to sell any of those products or inventories to someone else, its consignment without any actual product being shipped to the seller. If the person can find another person to buy the product or inventory, the company listing the product ships the goods to the buyer and gives a commission to the seller and to our website for facilitating the transaction. The seller however could also buy the products themselves, consignment with the shipment of goods, and then re-sale them for profit, or keep them. 4.1.2 Customers Suppliers: The suppliers are companies from all around the world that have excess inventory for sale, or products they need help selling. Sellers: Sellers are the general public who come to the website to earn commission by selling the suppliers products/inventories or earn profit off of the re-sale of the goods. Buyers: The buyers are the end users of the product. They are the ones who the sellers sell the suppliers products or inventories. 4.1.3 Website Operation Use of the website begins with the supplier opening an account. Once they have opened an account and provided all the necessary information and agreed to all terms and conditions they 14
  • 15. can begin listing products. They must decide if they want to list products to be sold continuously or if they are listing excess inventory to be sold off. Once they have decided they upload all the necessary information about their products that someone would need to sell them; this includes and pictures, technical specifications, etc. They upload a price and quantity (if it is inventory) and our website engine tells them the discount required (see pricing strategy). T he price that is listed on the website is minus all the commissions. The next stage of our website involves a member of the public signing up and logging onto our website. They then chose to search our wholesaling section or our consignment section. They chose the products and or inventories they want to attempt to sell and go out and sell them. Once they have made a sale they give the seller the buyers shipping information through our website and the money is collected through our website as well to be distributed to the supplier once the goods have been shipped, minus ours and the suppliers’ commission. 4.2 Pricing Strategy 4.2.1 Supplier Pricing The company supplying the goods for the website will sell their products at their regular price minus a discount determined by if they are listing excess inventory or regular products, regular products require smaller discounts. The amount of discount that must be offered on the suppliers inventories will increase depending on the amount the seller is selling or buying from them. This discount represents the benefit the supplier receives for the selling of their inventory in bulk. 4.2.2 Online Sales Pricing Strategy 15
  • 16. The discount that the supplier must pay will only be partially listed on the website. Part of the discount will be absorbed by Online Sales because of their commission for facilitating the transaction and by the commission that will be paid to the seller for selling the product. The final price that is listed on the website for the supplier to see and offer to the end user will be the supplier’s regular price minus the discount with Online Sales and the sellers commission subtracted from that. A discount is required so that the end user does not circumvent our service and deal directly with the supplier; the prices offered to the end user will always be lower on our site then if the consumer dealt directly with the supplier. 4.2.3 Seller Pricing The seller receives a commission that is predetermined for the item they are selling. It is listed with the price the end user will pay. 4.2.4 Buyer Pricing The buyer will pay the price that is listed with the product on the website, it will be lower then if they were to try and purchase the product themselves. 5.0 Business Unit Strategy 5.1 Marketing and e-strategy Advertising and Customer Relationship Management (CRM): Targeting Our attempt is to target a specific demographic, which has been documented by market research firm AC Nielsen for the major e-commerce player, eBay. Since this is the only research result available due to the novelty of the market, we will compensate for the supplier side of the 16
  • 17. business with our own investigation. The AC Nielsen study mentions that there are roughly 212 million buyers and seller in the e- commerce game. In the US there are 128 million (60%), which makes the region even more attractive for our primary advertising strategy. The rest of 84 million (40%) are spread across other countries, cultures and continents which increases the effort required to contact and attract the in a cost effective manner. Online stores on USA eBay site represent 57.8% (173,000) of the entire number of stores, which is equal to 299,000. The research mentions that there are 726,000 sellers in US that use the e-commerce website as their primary and secondary source of revenue. Also it is noted that 1.5 million people use the e-commerce site to supplement their income in the US, and that 95% of all seller are small business or individual. This gives us the opportunity to target roughly 2.3 million sellers and 128 million buyers only in the US. Translated in dollar value this segment represents roughly CAD $4B (60%) of the revenue figure. On top of these figures are the growth rates of the US whole sale industry, 64.43%, from $2.16B in 1995 to $3.55B in 2005, and the growth of the Canadian non-retail sales (14.29%) from $10.4B in 2000 to $11.85B in 2004. Table 1: AC Nielsen study for eBay (main findings) Buyers and Sellers: • 212 million Worldwide • 128 million in the US • 84 million in the other countries • 299,000 eBay stores worldwide • 173,000 stores hosted on the US site • Sellers • 724,000 in US; Primary + Secondary source of income • 1.5 million in US; Supplement their income selling online • 95% of eBay sellers are individuals or small businesses 17
  • 18. Source: AC Nielsen study for eBay, November 11, 2006. Acquisition The acquisition strategy will be based on an advertising campaign that will run continuously in order to receive as much exposure as possible. Our ads will be placed on websites such as PayPal, Yahoo, Google AdSense, Hot Jobs, and Monster.com. The reason behind these channels is that the target segment is a heavy user of these services, which sometimes are bundled together. Another modality for attracting and populating the website with sales people will be to access Monster.com’s database and contact all the sales people who posted their resumes or that have profiles. This could be done either by using targeted email campaigns or a call center to help us increase awareness of our website and stimulate sales. The same strategy will be used for Workopolis.com and other sales focused recruiting agencies in the region. This would ensure a very low acquisition cost per sales person. A potential problem at this point could be overlapping advertising messages which could be eliminated by screening email addresses, or by using services in specific locations only. Retention Our company will try to improve retention by offering a strong value proposition, based on a winning price level. Since we focus on excess inventory sales, we will ask for a discount rate bigger than that of their best retail or wholesale current offer. In this way we will add value to the market place and our suppliers and sales force will have to return due to the fact that the prices are the best in the market place. Expansion The strategy is to steadily increase the value of our sales force by increasing the number of products they are selling through weekly targeted newsletters that contain new or existing 18
  • 19. products according to the experience of the sales person. The sales force will constantly be our main target for expansion, because it represents the source of our revenue. 5.2 IT and Cyber Security Personnel One of the most important assets of the organization is its knowledge worker, or the IT personnel. Due to the technologically dependent nature of the business, the IT personnel must be qualified not only to operate the systems in place, but also to design and maintain them. In this way, key competitive factors will be kept in-house and the organization will have more control over its intangible assets. Any changes to the systems in the use, will be executed in a much faster manner, which allows decisions to be quickly implemented and, therefore, results will be easier to achieve. For the first six months to one year of operations the organization will hire one IT professional, whose main responsibility will be to build and maintain the website and the e-commerce engine behind it. As shown in the financial statements, the cost to develop and maintain the website is evaluated at $12,000 over a period of three to four months. The website will allow suppliers of goods or services to post their merchandise under certain categories and in quantities they choose. In the same time, the sales force will be able to create their own profiles on the website, so that the suppliers can contact them and vice versa. The main idea is to prevent the supplier and sales person to avoid our website and consequently the payment of commission. To achieve this, our focus will be on forcing suppliers to post products at lower prices than their best retail or wholesale offer. Since the purpose of the website is to sell 19
  • 20. excess inventory, we believe that obtaining cheaper products that anyone else, will give us the competitive edge, and when combined with an online sales force, will turn our plan into a source of revenue. Having cheaper products in bulk quantities, the sales force will have to return to the website in order to obtain new product offers. This basically represents our value proposition mentioned in the beginning of the report: Offer products for sale in bulk quantities at the lowest price possible, to a world wide network of sales people. Another duty of the IT employee is to conduct training sessions with the rest of the personnel regarding computing security. This will give our staff the right knowledge on how to prevent data corruption and loss but will also inspire trust to our customers. The data protection and cyber security policies in the internal environment of the organization will represent a key objective and its evolution and effectiveness will constantly be monitored with the help of a balanced scorecard, which will be discussed in the Implementation and Evaluation section of the report. Systems Several encryption and security software solutions will be acquired and installed on our systems, which have the role of protecting the sensitive data of our company, clients and suppliers. The costs related to the implementation of these solutions are presented in the financial systems. Another category of software is represented by the office productivity suites and the operating systems that run on our computers. To minimize costs, our company is using a combination of open-source and proprietary software solutions. 20
  • 21. Regarding the financial transactions and the computer systems involved in the Finance department, it can be mentioned that our company will use an existing online banking system: PayPal. In this way, we will minimize transaction responsibility and paper work in exchange for a small fee as shown in the financial statements. Clients: When it comes to our clients, our first priority is to ensure their security and privacy are fully respected. To enforce this policy, our company will take all the necessary measures to make sure that we deliver on our promise. Starting with the internal environment and the work philosophy of our employees, the financial processes and on-site interaction, our company will implement the necessary security measures. To protect the data existing on our computers, we will encrypt all hard drives, removable drives and backups. They will also be constantly archived and deposited in a secure place in the end of the day. The assistance of specialized consultants and security providers will be required to develop a consistent security screaming and protection system. Access to information and the transfer or copying of it will be closely monitored on a 24h 365d basis. We fully understand the online security concerns regarding fraud and identity theft of our clients and these issues represent key managerial objectives that will constantly be improved. SWOT Analysis: Strengths: Weaknesses: • Flexible product and service offer • Limited advertising budget • Scalable business model • Limited revenue streams • Low startup and operations costs • Business requires large sales turnover for • In-house business and IT knowledge consistent profit • Low financial, product, and service liability • Reliability on external factors: sales force, • Easy product knowledge transfer between product quality suppliers, company and sales force • Limited control over advertising channels 21
  • 22. • Limited personal relationships with suppliers and clients • Limited customer support Threats: Opportunities: • Developing the initial community • Growing online commerce • Improved inventory practices • Capitalize on excess inventory and over • Customer and supplier rejection production levels • Strong competition from similar businesses • Serve various growing markets • Clients default to pay • Take advantage of existing sales forces to • Target for potential online attacks sell excess inventory • Prone to online fraud schemes • Take advantage of network effects: easy to become a client or supplier and to spread the word SWOT Conclusion and Risk assessment: 1. How can we use each strength to take advantage of Opportunities and eliminate threats and risks? Using our in-house knowledge combined with a flexible product offer we can promote the product and service offer to existing online sales force and in this way capitalize on the supplier’s excess inventory. To achieve this goal, a strong and energetic advertising campaign must be launched in order to achieve the critical mass of suppliers and sales people required to create a constantly growing revenue stream. 2. How can we eliminate or minimize each Weakness to enable new opportunities, and to avoid being targeted by Threats or to increase risks? 22
  • 23. In order to build a sustainable business, we will focus on developing personal relationships with major suppliers in order to give the business a more personal touch. This will help us to secure a constant source of revenue and will also reduce complete reliability on external factors such as product quality and sales force. Even though the reliability on these factors cannot be eliminated, we will decrease the chances that a potentially unsafe big ticket item will be sold through our website. Due to the nature of the business and its complexity, we cannot take responsibility for every product sold. To minimize the threat of an online attack targeted at destabilizing our operations and breaching our clients’ privacy, we will focus on developing a strict cyber security system to provide maximum protection possible with as little as possible impact on functionality. This will add to our credibility and image on the market, creating the necessary conditions for a successful online business environment. Based on the company’s internal and external environment analysis, and taking into consideration the risks involved in starting and operating the business, the company’s position, competition and value proposition are considered acceptable and achievable. 6.0Implementation and Evaluation 6.1 Execution Timeline The execution of the business plan will start in early May 2007 and during the following three to four months the website and e-commerce engine will be designed and tested. During this time, the executive will focus on establishing the business and its headquarters location. Also, 23
  • 24. intensive market research and business development activities will take place, and once the IT aspect of the business is ready to operate the advertising and recruiting effort will begin. The chart presented in the Appendix shows the project’s milestones. 6.1 Balanced Scorecard The evaluation of the company’s activity will be a focused mainly on three levels: Marketing, Finance and IT. In order to clarify the process, a Balanced Scorecardi will be introduced, having the purpose to monitor the main objectives proposed by the executives. Since the present paper addresses the last quarter of 2007, certain values are missing in the Balanced Scorecard. This is due to the fact that the business is in the early stages of operation and therefore the beginning values are zero. The objectives are to be set on a monthly, quarterly and yearly basis by the management team in cooperation with the rest of the employees. This approach of measurement-based-management will improve the evaluation process, providing clear diagnostics on each function of the organization. The scorecard also gives a clear target for the organization, which will improve the departments to focus their efforts in a much more efficient way. For the purpose of the present report we provided a yearly description of the objective. 7.0 Financial Projections 7.1 Balance Sheet March 2007 24
  • 25. 7.2 Balance Sheet projections for 2007
  • 26. 7.3 Balance Sheet projections 2008-2010
  • 27. 7.4 Projected profit and loss – 2007-2008
  • 28. 7.5 Projected Profit and loss – 2008 to 2010
  • 29. 7.6 Cash Flow Budget 7.7. Revenue Projections 7.8 Revenue Projections 2008-2010
  • 30. Appendices: Graphs: 1. Sites Visits 2. Revenue Projections 2008 3. Revenue Projections 4. Income Projections Tables: Table 1: Canadian and US growth Appendix A U.S Wholesale Growth Percentage 1995 Sales $2,159,000,000.00 2005 Sales $3,550,100,000.00 Percent Change 64.43% Canadian non-store Retail Growth Percentage 2000 $10,364,052.00 2004 $11,845,350.00 Percent Change 14.29%
  • 31. Table 2: AC Nielsen study for eBay Buyers and Sellers: • 212 million Worldwide • 128 million in the US • 84 million in the other countries • 299,000 eBay stores worldwide • 173,000 stores hosted on the US site • Sellers • 724,000 in US; Primary + Secondary source of income • 1.5 million in US; Supplement their income selling online • 95% of eBay sellers are individuals or small businesses Source: AC Nielsen study for eBay, November 11, 2006 Charts: Chart 1: Marketing model 31
  • 32. Source: [Berry, Norman]: main source; the textbook and its companion web site, including notes from Dr. R.J. Norman available at http://www.dataminers. com/companion/dmt.html “Data Mining Techniques for marketing, sales, and customer relationship management”, Second Edition, by Michael Berry and Gordon Linoff, Publisher: John Wiley, 2004. Chart 2: Implementation Timeline Gantt chart*: May 2007- April 2008 Activity / Month May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Cyber Security evaluation and Fraud prevention Business establishment and market research Website and e-commerce engine design and testing Advertising and recruiting campaign Business development Evaluation of activity and strategy adjustment *Source: "Gant chart." Products. March 19. www.smartdraw.com Chart 3: Balanced Scorecard Balanced Scorecard*: 2007-2008 32
  • 33. Marketing Objectives: 2007 2008 Brand recognition 0 "target" Market share 0 "target" Customer base Financial Objectives: 2007 2008 Sales Turnover 0 "target" Revenue growth 0 "target" Operations costs 0 "target" IT objectives: 2007 2008 Cyber Security score 0 "target" Maintainance costs 0 "target" *Source: “What is the Balanced Scorecard.” 19 March 2005. www.balancedscorecard.org Copyright. Adam W. M., Kristaps K., Céline T., Andrei C. Z., Ottawa, Canada. March 2007. 33
  • 34. i “What is the Balanced Scorecard.” 19 March 2005. www.balancedscorecard.org