Presented by: Rachel Romano Kathleen Barbosa Lydia Cooper Jasmine Shavers Monika Kerby
The Organization Jon Nordmark President and CEO, eBags Mike Frazzini VP of Technology and Operations, eBags Peter Cobb VP of Global Merchandising, Customer Acquisition and Awareness, eBags
eBags.com Mission Statement To be the world's most recommended retailer of bags and related accessories by delivering a trustworthy and innovative customer experience while being a cool place to work, and earning a superior profit.
Fragmentation Fashion Designers Coach, Vera Bradley Luggage companies Samsonite, American Tourister Prices $20 to $1500 Styles Suitcases Handbags Briefcases Messenger bags Carry-on’s Wallets Clutches Backpacks eBags brings all of these options together to give their customers one stop shopping for all of their luggage and bag needs.
Product Choices Two major types of products offered: 1. Brand name merchandise from leading retailers 2. The companies own line of eBags products Vera Bradley Rolling Trolley eBags rolling trolley
Two separate types of supply chains
Traditional speculative inventory model
Drop-Ship Model Customer places order on eBags.com -> eBags electronically transmits the order to the vendor -> Vendor ships order to the customer directly, using the eBags shipping account -> eBags pulls tracking information and sends to customer in confirmation email -> Vendor invoices eBags for the product -> Ebags issues a payment to the vendor ■ Scan in exhibit 2 on page 509 and include here.
Speculative Inventory Product comes from Asian manufacturers who sends the bags to be stored in Texas warehouse -> Order placed gets forwarded to the warehouse -> Warehouse picks and ships the order to the customer ■
Two Supply Chains Drop-Ship Model (85% of orders)
No cost to house inventory (rent, insurance, etc.)
Vendors get increased customer base and brand awareness
Must have good relationship with vendors
Harder to problem solve customer service issues between eBags website AND vendor
Speculative Inventory Model (15% of orders)
Higher percentage of profits goes directly to eBags
Can capitalize on cost conscious customer base
Must pay for the warehouse in Texas
Are vulnerable to inventory obsolescence
Footwear “ All too often, people trying to start any business spread themselves too thin by going in too many different directions. When you do that, you lose your expertise in the area that inspired your business in the first place. We learned that lesson early.” Peter Cobb, Ebags co-founder
Take advantage of price sensitive e-commerce consumer
Record Sales Fiscal year ending June 30, 2010 Estimated Annual Sales $500,000 to $1 million Sales up 13% Leading sales of messenger bag and luggage categories 26% and 23% Brands showing strong growth: B. Makowsky, Timbuk2 Samsonite Baggallini. Fiscal year ending June 30, 2010 Estimated Annual Sales $500,000 to $1 million Sales up 13% Leading sales of messenger bag and luggage categories 26% and 23% Brands showing strong growth: B. Makowsky, Timbuk2 Samsonite Baggallini.
Buying behavior suggests consumers purchase multiple pairs of shoes for right fit.
Increased product return rate
Increase consumer awareness that footwear can be purchased on the website.
Agreement with non-retail websites to promote eBags on their websites.
Affiliates to receive commission for every sale that resulted in navigation through affiliate’s website.
Challenges of 6PM.com:
Supply Chain Management Business Model Challenges Language barriers Shipping requirements Brand awareness Web page administration Relationship between vendors and online retailers Must satisfy drop-ship method Challenges Managing at Distribution Level Functionality versus Style/Value Communication