Running head: E-COMMERCE BUSINESS PLAN

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E-commerce Business plan Name Institution

E-COMMERCE BUSINESS PLAN E-commerce Business Plan Bestservice.com Company will focus on providing online vendors and clients an easy way to give back products bought online. The company will offer a solution to the vendors of non perishable, physical products. The online vendors would be able to prevent poor sales, ensure client utility and induce repeat sales by providing clients a centralized online to allege returns. The company will be positioned for growth and it will get a strong chance to overcome possible competition (Pauline, 2003). E Commerce seems to be increasing at a high rate, and the revenue does not show any sign of decrease. According to a survey by Shorp.org and Bouston Consulting Group (2001), in the last holiday season, November to December where vendors experienced online sales and revenues quadruple from 300 % to approximately $11 billion. Another study by Ernst & Young (2004) approximated that total sales for online and customer merchandise for the previous year were about $25-30 bn. Of late, the approximate returns rate for online industries is 9 %, which shows a strong opportunity. The company’s services will ease the full return process. Retailers will be more focused on key competencies and avoid interruptions with petty issues. There will be an increase in retailers’ customer service, reduced capital expenditure, strong sales opportunity, advanced inventory management, and increased revenues. The clients will gain by having an easy and convenient method to return the purchased products and get back their returns. The Bestservice.com Company will obtain success by the following three means. First, there will be the development of a client utility software application. The software will ensure excellent management in all the business activities, according to Hossein (2001). The following means will be the formation of strong relationships among online vendors, transporters and

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E-COMMERCE BUSINESS PLAN credit- card industries. The bonds with vendors will enable Bestservice.com to grow their client

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base of retailers. Since the real cost of transporting goods is the shipping companies’ biggest cost driver, alliances will be formed with them. The credit card industries will enable Bestservice.com to provide credit cards as preferred cards, hence increasing the revenue. The process of shipping will be made easy as clients will be able to produce a shipping sticker on the Bestservice.com website. At times, clients may lose the printed labels after getting the ordered products. Later on, they might change their opinion and decide to return the item. Unfortunately, this cannot be done without the label. The new company will ensure that the sticker is available online fulltime. The clients will not be required to store many label documents. The online label will be providing all the information including tracking numbers. This reduces the time spent on counters. Bestservice.com will apply a double pricing strategy to make sure a revenue strategy cycle. Online vendors will pay a flat quarterly or else annual charge, depending on the volume of sales, categories of the products, and other conditions for returning. Also, a certain percentage fee will be charged by Best service.com, on every item, alleged online for return. Financial Plan The table below exhibits the anticipated cash flow for three years from the beginning of operation. Cash flow Received cash Operations cash Revenue $0 $3,258,000 $10,850,000 1st Year 2nd Year 3rd Year

E-COMMERCE BUSINESS PLAN Cash receivables $0 $10,273,000 $13,537,000 $34,280,000 $45,130,000

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Total operations $0 cash Other received cash New investment Long-term liabilities Current borrowing Sales tax Other liabilities Total cash received Expenses Operations expenses Spent cash Payment of bills Total expenses Other expenses Long term assets Dividends $1,250,000 $150,000 $1,250,000 $1,400,000 $0 $0 $3,220,000 $0 $3,220,000 $0

$0 $0

$0 $0

$0

$0

$0 $0 $13,537,000

$0 $0 $45,130,000

1,550,000 8,440,000 9,990,000

$3,102,000 $20,232,000 23,334,000

$222,000

$530,000 $0

E-COMMERCE BUSINESS PLAN Tax Repayment of borrowing Total expense Net cash flow 2,650,000 570,000 10,212,000 3,325,000 23,864,000 21,266,000 $0 $0 $0 $0 $0 $0

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Analysis There were no sales in the first year; therefore, the revenue was zero. Some cash was received for the new investment. The Net cash flow was extremely poor. In the second year, there was a rapid increase in the company sales. The expenses were higher than the previous years’ but still the revenue exceeded the total expenses. Therefore, there would still be a high net cash flow. During the third year, the sales revenue was highest. High expenses were incurred, but the benefits Net cash flow, was still high. It is anticipated that each year there was a certain percentage increment of the net cash flow.

In conclusion, e commerce helps ease the full return process. It helps in increasing retailers’ customer service, reducing capital expenditure, strengthening sales opportunity, advancing inventory management, and increasing revenues. The client utility software application ensures excellent management in all the business activities. Furthermore, the clients, through e-commerce, are able to return the purchased goods in case they are dissatisfied. The process of shipping is always made easy as clients are able to produce online shipping stickers. This helps save time wasted on the counters, and in case of loss or misplacement of the stickers it is easy to recover them.

E-COMMERCE BUSINESS PLAN References Hossein, B. (2001).Electronic commerce: Principles and practice. New York: Academic Press.

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Pauline, R. (2003). Inter- organizational trust for business to business: E commerce. New York: IRM Press. Ernst & Young (2004). Ernst young’s personal financial planning guide. New York: John Wiley & Sons. Ranat (2003). Applying E-commerce in Business. New York: SAGE.

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