SOUTH PAW PRODUCTS

Don’t Get Left Behind

Business Opportunity

Left-handed people are an often forgotten population.

Most of the time, they must learn to adapt to right-handed products in their daily lives.

7-10% of population and growing

Unique Value Proposition

Online retailer selling products geared to the left-handed individual.

Aggregate all of the existing left-handed products already on the market.

Work with manufacturers to provide exclusive solutions to products not currently addressed by competitors.

In addition to website, become an Amazon.com merchant.

Examples of Exclusive Products

Smart phone apps that reverse the orientation of swipe to unlock.

Wrist watches with buttons arranged on opposite side.

Witty t-shirts about left-handed life

Target Market

Any individual that is left-handed Any individual that cares about someone

that is left-handed. Includes babies all the way up to people

looking for caskets with hinges on the opposite side.

Production & Distribution

Suppliers will be:Manufacturers already in the business of

creating left-handed productsManufacturers of right-handed products to

create the left-handed counterparts. Sales will be:

Via South Paw’s websiteVia Amazon.com

Economic Model-Revenue Drivers and Profit Margins

All major revenues will come from salesCapitalize on niche market and making them feel

special SPP will be a conglomerate seller

Just like zappos.com does not make shoes, but sells them online

SPP will try to make exclusive contracts with vendorsBoth parties benefit – vendors sell their excess left-

handed items; SPP purchases at a discount

Economic Model-Fixed and Variable Costs

Majority of all costs will be variableShipping, COGS, taxes all dependent on product/sale

Staffing costs will be minimalPartners will each do their share of business at no cost

Largest non-website fixed expense will be storageEstimated no more than $100 month

Other possible non-website fixed expensesAdministrative Expenses: ~$200Anything else?

Economic Model-Start-Up Costs: Non-Website

Start-Up Costs are anticipated to be fairly low compared to most retail businesses as there is no physical retail location

Partners will use personal computers and cell phones for coordination

Non Web-site Start Up ExpensesMarket Research Study = $1000Storage Solution = $100/mo + $100 depositAdministrative Set-Up = $500

Economic Model-Start-Up Costs: Website

Economic Model-Breakeven Analysis: Fixed Costs

To breakeven for the first year, using the estimates for a small online store of less than 100 SKUs:

Fixed Costs = $6900Website Costs - $2800Market Research - $1000Storage (full year) - $1300Admin Costs (full year) - $1800

An exact number of sales is difficult to calculate as each product sold will have a different contribution margin (examples on the next slide)

Economic Model-Breakeven Analysis: Example Products

Left Handed Kids’ Safety Scissors

Sales Price (includes ‘free shipping’ to customer) $6.99

Our Cost including shipping, fees, processing -$2.90

Shipping Cost -$1.95

Processing Fees -$0.21

Contribution Margin =$1.93

Adult Fiskers Brand 8” All-Purpose Scissors

Sales Price (Fiskars’s MSRP of $13.15) $14.99

Our Cost including shipping, fees, processing -$6.10

Shipping Cost -$1.95

Processing Fees -$0.60

Contribution Margin =$6.34

Once a full line of products is established, an estimate of demand for each product can be generated. The Market Research that would be conducted prior to launch would allow South Paw Products to more clearly define a breakeven point, but without that research, any product demand would just be a guess.

Economic Model-Profit Durability

Limited entry barriersOpening an online store is a well defined

Minimal lead timeTailoring web store shell should take less than 3mosLimited product quantities to start require less than 1

moMost lead time needed for market research

Demand will only increase over timeMarket is far from saturatedAs more “South Paws” learn about store, orders will

increase

Marketing Strategy

AdvertisingGoogle search resultsAmazon search resultsBranded apparel worn by customers

PromotionPrice-match against right-handed equivalent

product for first 12 months.$50 credit for any request that results in a

product.

Pricing

Medium to low cost retailer Pricing will average between 10 to 25%

over cost for each product. A more precise pricing model will be

determined after further market research on a product by product basis.

Startup Needs

Startup Costs People, Talent, Skills

Website - $60,000 Warehouse - $45,000/yr Inventory - $10,000 Insurance - $2000/yr

Web Designer (outsourced)

Inventory manager Accountant (outsourced) Customer Service Rep.

Set Apart From the Competition

Providing innovative left-handed products that are not currently available from other left-handed retailers

Take product requests from customersR&D department to make these a reality

Partnering with existing manufacturers to produce left-handed versions of productsEx. Left-handed Fossil wrist watch

Market Trends

The majority of initial sales would come from those with a selective demand (repeat sales) for these types of products

South Paw seeks to attract a larger number of customers through primary demand. Initially these sales will be low

After recognition of unique product, primary demand sales will increase

Market Segmentation 1 segments is the repeat purchaser of left-

handed goods; this customer is left-handed and uses left-handed products that must be replaced on a regular basis

Another segment is the left-handed customer who purchases goods infrequently; this customer typically puts up with right-handed goods most of the time but will occasionally make a purchase to add some innovative left-handed solutions to augment his quality of life

Market Segmentation Cont.

South Paw is confident in its ability to take these infrequent buyers market share away from other retailers through dynamic marketing & unique products

Friends, family member, or significant other of a left-handed person. This segment of the market is looking to buy a product that expresses the uniqueness of the individual receiving the product

Market Segmentation Cont. By offering different types of products

that no other left-handed product offers, South Paw is confident in its ability to garner a significant portion of gift purchases

The quality and unique products will ensure these customers return to make these type of purchases