1. eBags is an online retailer specializing in bags and luggage. It sells over 30,000 products from 500 brands and has sold over 6.7 million bags. 2. eBags uses two supply chain models: a drop-ship model for 85% of orders and an inventory model for 15% of orders stored in a Texas warehouse. 3. eBags is considering expanding into the European market and footwear category but faces challenges with international expansion, developing footwear expertise, and managing multiple supply chains. Expanding carefully into these areas may provide new growth opportunities.

1. Presented by: Rachel Romano Kathleen Barbosa Lydia Cooper Jasmine Shavers Monika Kerby

2. 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

3. 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. Hassle-Free Returns Policy 60 days from receipt of shipment Prepaid Return Labels Price Guarantee Refund difference of price within 10 days

4. Statistics Leading online retailer 6.7 million bags sold Over 500 brands and 30,000 products Samsonite, Kenneth Cole, Kathy Van Zeeland, kate spade, Cole Haan, JanSport, and Nike Over 1.1 million unbiased customer reviews Pioneering tools Laptop Case Finder, the Airline Approved Carry-On Finder, and exclusive Bagopedia eBags.com is a part of eBags, Inc. which includes eBags UK

5. History Early 19 th century luggage Expensive, hand-crafted, difficult to create Leather and wood World War II: Rip-stop nylon, fiberglass, aluminum, plastics and simulated fabrics Durable, lighter, crafted by machine

6. History 1980s: Status symbol Match status, wealth and fashion taste Coach, Louis Vitton, and other designers

7. 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.

8. 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 Drop-ship model. Traditional speculative inventory model

9. 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 ■

10. 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 ■

11. Two Supply Chains Drop-Ship Model (85% of orders) Pros: No cost to house inventory (rent, insurance, etc.) Vendors get increased customer base and brand awareness Cons: Must have good relationship with vendors Harder to problem solve customer service issues between eBags website AND vendor Speculative Inventory Model (15% of orders) Pros: Higher percentage of profits goes directly to eBags Can capitalize on cost conscious customer base Cons: Must pay for the warehouse in Texas Are vulnerable to inventory obsolescence

12. Footwear “ 6pm.com quadrupled in size during the three years we owned the website. We feel confident in our decision to sell 6pm.com to an outstanding company like Zappos.com as this move will allow eBags to concentrate our energy towards continuing to be the Internet's premier luggage and handbag e-tailer. ” Jon Nordmark, CEO and co-founder

13. Competitive Advantage Shoedini.com Highly competitive Decrease in importance in retail channel Focus on price sensitive consumers Take advantage of price sensitive e-commerce consumer

14. 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.

15. Challenges Consumer behavior Need to be tried on by consumer Buying behavior suggests consumers purchase multiple pairs of shoes for right fit. Increased product return rate Marketing strategy 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:

16. 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

17. European Expansion From a business perspective: What decisions should Jon Nordmark make regarding the European expansion and the foot wear markets? Expand into the European market Footwear will take time High internet usage and percentage of online shopping: Profit International business

18. Footwear Expansion Not a good move just yet business Need time to develop into shoe market Feasible with strategy Expansion, Europe, eBags: Will be good profit

19. e-commerce Involves transfer of information across the internet Consumers electronically exchange goods and services with no barriers time or distance Accept online payments, shopping cart software to track services and customers Leverage Strengths and Profits Different approach to advertisement or marketing A larger variety of luggage items Use variety of retailers to attract different consumers Expand products to clothes and other items With a variety of products and strategic planning eBags can dominate online shopping.

20. Presented by: Rachel Romano Kathleen Barbosa Lydia Cooper Jasmine Shavers Monika Kerby