Unlock your.
Business Plan of
2017-2018
2360 95th St, Naperville, IL 60564
Email: [Link]@[Link]
Website: [Link]
Phone: (630)-428-6000
Fax: (630)-428-6000
Twitter: @LegacyVEI
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Table of Contents
Business Information ................................................................................................................................... 3
Executive Summary................................................................................................................................... 3
Mission Statement .................................................................................................................................... 3
Company Description ................................................................................................................................ 4
Management Functions ............................................................................................................................... 4
Planning .................................................................................................................................................... 4
Organizing ................................................................................................................................................. 5
Directing .................................................................................................................................................... 6
Controlling.................................................................................................................................................. 6
Market Analysis: ........................................................................................................................................... 7
Current Economic Conditions ................................................................................................................... 7
Real Industry Analysis ............................................................................................................................... 7
Virtual Industry Analysis ........................................................................................................................... 8
Competitive Analysis ................................................................................................................................. 8
Target Market and Segmentation ............................................................................................................. 9
Marketing Mix ............................................................................................................................................ 10
Product:................................................................................................................................................... 10
Price: ....................................................................................................................................................... 10
Placement ............................................................................................................................................... 10
Position ................................................................................................................................................... 11
Promotion and Direct Marketing ............................................................................................................ 11
Business Risks & Risks Addressed .............................................................................................................. 12
Business Risks.......................................................................................................................................... 12
Financial Write Up ...................................................................................................................................... 12
Break Even Analysis ................................................................................................................................ 12
Cash Budget ............................................................................................................................................ 13
Income Statement .................................................................................................................................. 14
Balance Sheet.......................................................................................................................................... 14
SWOT Analysis......................................................................................................................................... 16
Appendix..................................................................................................................................................... 16
Sample Non-VE Sales Contract ............................................................................................................... 16
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Business Information
Executive Summary
Legacy is a unique and convenient way to get all of your favorite sports, entertainment, luxury,
and outdoors products without having to search around. Our experts will select different items
from a single theme into one package for you. You can choose a package size with the items that
fit your needs best. It's a one stop shop that suits everyone. At Legacy, we've decided to release
sports packages first, then as soon as our company grows, we will release entertainment and
other packages as we feel necessary.
We've based our target markets off areas that are heavily populated with VEI firms. For example,
when creating our sports packages, we decided to use teams from areas where there were many
VEI firms such as Los Angeles, New York, and Chicago. We also are focusing on winning
teams, such as whichever teams get in the World Series, or teams with a wide fan base. We feel
this is the best way to get our company going because we will advertise at the peak of their
celebrations. In terms of age demographics we've decided to reach out and advertise to a teenage
crowd because we feel our company can relate to that age group and we know exactly what they
want.
Our pricing strategy depends on the size of the package you purchase. Our larger, or higher end
packages will fall under a higher end pricing strategy, we've decided to make our prices higher
than our competitors to prove we have a higher quality product than our competitors. On the
other hand, our lower end and smaller packages will start out at a low price so we can beat our
competitors with our prices. After penetrating the market, it will be easy to slowly raise the price
because the market will already be set. With our company paying off their loan very early in our
existence, our company has no debt and will be a profitable company from the start of the year.
Starting off the year with $442,848.06 it allows us as a company to start buying inventory and
allow us to have money to advertise. This amount is able to cover many of our early expenses
and allows us to purchase a lot more in the future. We feel that these strategies will entice
consumers and allow for us to have the most effective sales in a competitive market.
Legacy offers a unique and easy way to get quality products as soon as you need them. Its fast
and it's convenient; there's no more searching everywhere for the products you want. Instead,
Legacy gives you all of the most desirable items in one easy purchase. Considering our wide
variety of items, we guarantee you'll find something you love!
Mission Statement
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Legacy aims to provide the most convenient and relevant packages for our customers at a
competitive price. We always hold ourselves and our products to the highest standard of
excellence. We will accomplish our goals by conducting thorough market research and being
attentive to our customers needs.
Company Description
Legacy is located at Neuqua Valley High School Campus at 2360 95th Street, Naperville, IL.
Legacy was established August 2012, but originally sold customizable sunglasses. They then
continued to sell time travel packages in 2013. In 2014 and 2015, Legacy decided to sell Concert
tickets. Last year Legacy sold Eco friendly outdoor equipment and then this year we have made
the decision to sell special categorized packages.
Management Functions
Planning
These are Legacys long term and short term goals for the business year along with the strategies
we will use to achieve them.
Short Term Goals Strategies for Achieving
1. Launch an effective Meetings between the Design, IT, and Marketing departments to
website discuss how advertising strategies will specifically apply to our
website.
2. Start communicating Reach out to other companies that were at the VEI Leadership
with other firms Conference through business cards or handouts we received.
3. Make a sale Effectively market our product online with innovative
advertisements and at trade shows through attention-grabbing
displays and energetic salespeople.
Long Term Goals Strategies for Achieving
1. $150,000 in final Constantly find ways to sell to our target market and reach small
profits companies outside of the VE community.
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2. Adapt products to Whether its teams on hot streaks or talented players that have
current sports season exploded in production, we can use viral sports news to attract
customers to our company.
3. Make strong Since trade shows provide a large portion of our sales, it is
appearances at trade imperative that we grow interest in attending trade shows early and
shows provide incentives such as pay raises for going.
Organizing
Legacy is led by a Chief Executive
Officer, (CEO) who is tasked with
ensuring that Legacy is at maximum
possible efficiency by creating the
companys goals, mission statement,
and plan monthly meetings, as well
as assess the direction and
productivity of the company. In
addition, the Chief Executive Officer
leads the Chiefs department, which
in turn led their own respective
departments of Human Resources,
Accounting and Finance, Design and IT, and Marketing and Sales. Each department is comprised
of employees that perform specific tasks based on their department, and what their department
officer assigns them to achieve. Employees are assigned to a department based on current
interests and result of an application process consisting of a resume, cover letter, and email.
Legacy itself is divided into four main divisions.
Human Resources and Administrations duty is to create a positive company environment. They
are held responsible for setting goals, objectives and strategies for departments, developing a list
of invoice friendly firms, and procedures to manage required purchase. Concerning the
employees of the company, they design Team Building activities, guidelines for company
meetings and future events, and record attendance for payroll and the VEI portal.
The Accounting and Finance sector takes note of the current economic status of the company.
Accounting and Finance are in charge of financial records, which include deciding payrolls,
paying bills such as rent, utility or taxes for running the firm. They determine total prices for the
products, as well as buy inventory in order to resell or create a final product.
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The sales and marketing department is responsible for meeting sale goals. Sales and Marketing
contact possible customers with various outlets of communication, such as emails, websites, and
trade shows. In addition, they compose promotional adverts, offers, and flyers to be delivered
and distributed to a potential customer base, using a product, pricing, positioning, and placement
strategy. Sales and Marketing also decides the target market that Legacys products are
advertised to, as well as analyze Legacys competitive advantage and possible strengths,
weaknesses, opportunities and threats to the business.
The Design and IT department is tasked with designing aesthetics and visual of the company.
This consists of designing the layout of the website; making it easy to navigate and purchase
items for Legacys customers, as well as making sure it is visually attractive to generate interest
and sales. Design and IT also creates the logo, figurehead, and flyers in order to create an easily
recognizable brand.
Directing
Legacy will follow the chain of command when determining tasks. The CEO will assign duties
to the Chief of each department to be accomplished each week. In turn, the Chiefs will give
specific tasks to each employee based on their personal strengths. Meetings within each
department and between the Chiefs will be held at the end of each week to have an overview of
productivity and direction of the company. If any employee is finished completing their assigned
tasks, he/she can work on tasks in the VEI Data Portal. This will help provide effective
organization for the goals of the company.
Controlling
Legacy will have many different ways of tracking the amount of progress being made. The
company will hold informal meetings within each department at the start of each week to assess
what tasks should be completed. Meetings will also be held at the end of the week to determine
what work was completed and what work has yet to be finished. These meetings will be more
formal and will include forms of evaluation in case employees do not work efficiently. However,
employees who exceed expectations will be rewarded with honors such as employee of the
month. Weekly meetings will be held in each department and lead by the corresponding
department chief. The information gathered will then be passed on to the company CEO to
further assess what should or should not be happening. All company information will be further
processed at formal monthly company meetings to assess how the company is doing as a
collective. Meetings will always be led by chiefs but will leave opportunities for anyone in the
company to chime in. Although the majority of our company meetings will be led by students
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there will other meetings lead by our company facilitator. For example, at the end of the semester
for our class final members of our company will self-evaluate each other and have certain
assignments graded by our facilitator. This will encourage members of the company to contribute
because if they do not their grade will suffer. The abundance of meetings and check-ins at
Legacy will help in making sure both the chiefs and employees of the company know what they
should be doing at all times.
Market Analysis:
Current Economic Conditions
According to, The World Factbook the US currently has an unemployment rate of 4.7% out of
a labor force of 158.6 million. From 2015 to 2016 the inflation rate has increased 1.2% from
0.1% to 1.3%. In 2016, the GDP was $18.62 trillion and has been steadily increasing every year.
As the CPI has rose 2.2% it does not conflict with our market. The CPI has rose due to gas prices
and natural disasters causing extra purchases in the energy and consumption categories.
Specifically, in the apparel category, the CPI has dropped 0.2% which is beneficial for the
company as the overall prices have decreased slightly which would increase the demand for our
items. With the sports market being a boom business, we hope to be able to minimize the cost to
the customer by selling a bundle of sports items in one product. With the purchasing power of
the dollar decreased over the year, we hope to accommodate our customers with reasonable
prices. In contrast, the low unemployment rate is beneficial to Legacy as the economy is
currently at full employment, so there will be a surplus of disposable income available.
See Appendix (1)
Real Industry Analysis
The merchandising and apparel industry as a whole is a very wide, diverse market. Most of the
sales in the merchandising industry are used for personal use, or for secondary sales. Ever since
the establishment of Amazon, the retail world as a whole has been more and more to mainly
online sales. The gap between online sales and in-store sales expands very much every year,
online sales crushing in-store sales. The United States apparel market is the largest in the world,
valued at approximately 359 billion US dollars. The gross profit margin for the retail industry is
always changing, but ranges from approximately 27% to 53%.
The US apparel market is always changing and adapting. Trends and fads are always changing,
and the market has to adapt to what the customers want. This could be considered a negative to
the industry, because it is not consistent and could be hard to follow at times. The world is
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becoming more closely knit over the online merchandising industry, which will benefit our
company.
See Appendix (2)
Virtual Industry Analysis
There are many companies in the retail and merchandising industry, the biggest VEI industry,
selling a similar product to ours. The thing that separates our product from the rest is the
customization tools we will be implementing and the diversity of our product. The customer will
receive a package from one of our many different product categories. Our product ranges from
jerseys and clothes to adventure and hiking gear. The many different products we offer will drive
our sales in.
Since we are appealing to mainly high school seniors in VE classes all over the world, we
believe that our company will be very popular. Teenagers love fashionable clothes and jerseys all
that keep up with the latest trends. We also have specific city packages that will appeal to the
areas with the most VE firms: Chicago, New York, Los Angeles, Nashville, and San Francisco.
Students from these areas will see this and want to buy it to represent their city.
See Appendix (3)
Competitive Analysis
What we at Legacy do is give amazing products based on category to the world. We encourage
all of our products to unlock their legacy. Our main competitors as of right now, according to
information from previous years, will be firms such as Jersey Plug. Because multiple sports are
in season, particularly football, we are primarily focused on football merchandise. We sell
football, jerseys, key chains, apparel, and other merchandise of the major NFL franchise teams
from the locations of the most populated VEI firm cities. We are superior to our competitors by
allowing our customers to buy their merchandise in bundles for a relatively cheap price and thus
making it more cost efficient for the buyer, that way, the customer does not have to purchase
everything they want separately and can fit all of their needs in one product. Our competitors
offer solely one product individually, but we offer a variety of different products in addition to
the products of our competitors. We are also currently working on the released of other category
based packages like a basketball package, hockey package, baseball package, and soccer
package. We are also intending to bring about a Luxury package to sell jewelry, designer
clothing, and luxury cars, and an outdoor package to sell outdoor gear and supplies such as
camping and hiking gear. Ells bundles of items with prizes based on bundle size and only
certain categories of packages that apply to the specific areas we sell in. Commercials are a huge
part of our marketing. Commercials are a way to show to everyone how our products can impact
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peoples lives and how we are superior to our competitors by allowing them to buy their
merchandise in bundles and thus making it more cost efficient for the buyer. We also make use
of technologys most promising new field of advertisement. Social Media. Legacys twitter is
one of the most promising VEI firm twitter accounts out there and we are able to better
communicate with our customers who are VEI students/business members and promote to them
how our company is particularly dope. We make use of catalogs and magazines as well so they
know exactly what packages we are selling and whats in them. For our sports packages, they
can know exactly which team merchandise we have to offer.
Target Market and Segmentation
Our target market will be segmented by location in order to figure out which sport teams fans
we want to advertise our products to. For example, we will focus primarily on the baseball team
that won the World Series selling products that represent that team and advertise to VE Firms in
the winning state and city. By doing this, we will be able to advertise our product during the peak
of their celebration. At that time, we will be able to attract all of the fans of that team that want to
celebrate their victory by buying team-related products. In a broader scale, our company has
decided to focus our advertisements throughout the year on Chicago, New York City, Los
Angeles, Nashville, and San Francisco. We came to conclusion on these 5 cities based on the
amount of VE Firms in a state.
The states with the most VE Firms are California, New York, Illinois, and Tennessee. We will
focus on these states the most rather than supplying products to states that dont have a good
amount of VE Firms.
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Marketing Mix
Product:
Themed Packages
Sports, Luxury, Adventure, Etc.
Quality Boxes
Gold Keys for Unlocking
Price:
Small Package ($199.99) - includes 1 t-shirt, 1 water bottle 1 collectable, 1 lanyard
Medium Package ($649.99) - includes 1 hat, 1 sweatshirt, 1 pair of socks, 1 t-shirt, 1
water bottle 1 collectable, 1 lanyard
Large Package-Legacy box ($899.99)- 1 Jersey, 1 short sleeved shirt, 1 long sleeved
shirt, 1 hat, 1 sweatshirt, 1 pair of socks, 1 t-shirt, 1 water bottle 1 collectable, 1 lanyard
Our company pricing strategy depends on the size of the package you purchase as a consumer.
Our higher end packages will fall under a premium pricing strategy, which means that we will
set our prices higher than our competitors in order to prove that our product is high end and
worth the money. Our lower end packages will be a market penetration strategy, starting our
prices low and then raising the prices over time. After penetrating the market, it will be easy to
slowly raise the price because the market will already be set. We feel that these strategies will
entice consumers and allow for us to have the most effective sales in a competitive market. We
looked at wholesale prices for our goods and determined what the lowest amount we could pay
for all of our goods. We compared this with what people are willing to pay for these items and
created a medium price that would create good profit and keep consumers willing to buy.
Placement
Legacy will make all sales online which requires a strong online presence through a website. We
will provide high quality pictures and details that show our customers what they are getting with
our product. By updating our website we will keep each customer up to date on our new
additions to products. At trade shows, our booths will market packages with examples that will
allow our brand to grow across the country instead of just inside the state. Lastly we will create
email and phone number data base that allows us to interact with customers one on one and give
them the best experience possible.
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Position
The image that Legacy presents to the VE community is very important to our business. We are
dedicated to presenting ourselves to other firms as a company that is responsible and loyal. We
will work to be a leading company within the VE community and maintain a business that
attracts returning customers and new buyers through exceptional personal relations and customer
service. The identity of Legacy is built on the fundamentals of honesty and accountability. In our
efforts to expand our company throughout the year we will continue to maintain our company
standards and keep our customer service exceptional. Our company will achieve this by keeping
in touch with customers on a regular basis and potentially providing customer service surveys
that will help our company improve our weaknesses from our customers point of view.
Promotion and Direct Marketing
In order to encourage customers to shop at legacy we will use a variety of promotional strategies.
We will start by having links to our company website on the Virtual Enterprises Portal. This
ensures that companies will see our link because all firms use the portal for company operations.
Beyond this we will use social media to attract and update customers about products and events
Legacy is hosting.
Twitter: Our Company will focus much of our promotional advertisements through
Twitter. This social media app is popular amongst high schoolers and is a free app that
helps limit Legacys advertisement expenses. Twitter allows our company to not only
update our customers but it also enables customers to give feedback with Twitter
responses.
Instagram: Instagram is a growing app that allows people to communicate with others via
pictures. Our company will utilize this aspect and promote our products by posting
pictures of various packages and the items that are available in each package. The visual
aspect of Instagram will help attract customers because they will be able to see what they
are buying.
Alongside social media, Legacy will encourage customers to continue buying from our company
by sending E-mails with new products and promotions as they become available. Customers will
be more willing to read and review our emails when we use direct contact rather than general
advertisements. Direct contact with loyal customers and potential buyers will allow our
company to hold onto these firms and ensure they keep returning back to buy more of our
packages. Mass emails will be sent to companies throughout the year in order to continuously
update firms about our presence within the VE community. In addition to this, personal emails
will be sent to customers that purchase our items. We will thank them for their purchase and
encourage them to return by presenting them with a personalized email.
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Trade Shows will be a crucial part of Legacys success. Because our product is unique from
anything the VE community has seen in past years, it will be vital for our company to present our
packages and explain our company products in person to other companies. Our company will be
able to physically show customers what they are buying by bringing a sample package to trade
shows. Being able to effectively communicate our company goals and ambitions to potential
buyers will help promote our business and ultimately help increase our sales.
Lastly, something that will set our company apart from other firms is our marketing towards non-
VE entities. By establishing relationships with local small businesses, we can boost our own
sales while also providing avenues for advertisement. By doing this, we could have up to 75% of
our payroll expense originate from non-VE companies, effectively giving us $400,000 in free
money and the potential to have a record year.
Business Risks & Risks Addressed
Business Risks
Identified Addressed
Unforeseen circumstances prevent We will still have a couple of reps from
us from participating in one or more Legacy in attendance to these trade
Trade Fairs we expect to attend. shows. We will also get the word out
about products with email blasts and a
People may not be content with company commercial.
buying different types of packages
since a lot of customers prefer to We will make sure that customers know
buy single products. what they will be receiving in these
packages before they purchase it online
Each product in the packages may or at trade shows.
not satisfy every customer's
needs/wants so that would cause We will conduct market research in order
them to not want to buy the entire to satisfy our customers.
package
Financial Write Up
Break Even Analysis
Assuming that our annual costs are roughly equivalent to that of last years Legacy,
values used from the Medium Sports Package, a 25.84% profit rate per sale, project that our
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revenue will equal our expenses with 2,325 units sold and $92,911 in total sales if only the
Medium Sports Package is sold. However this amount could vary more than $50,000, with only
$38,629 needed in total sales if only the Small Sports Package is sold, as the profit margin on our
small and large packages are, 62.15% and 53.66% respectively, which is considerably greater
than our medium package.
See Appendix (4)
Cash Budget
To start off the year, we have $442,848.06 in liquid cash. We will make $534,598.45 in sales,
and will have total payments of $194,832.68. Our biggest payment we will have to make is
salaries, which will consume $143,467.13 of our total payments. Our net increase is projected to
be $339,765.77.
See Appendix (5)
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Income Statement
Since we are a re-establishing company, sales
probably wont start coming in until early
November 2017. We expect our sales to be the
largest in November and March, but still have
consistently increasing sales from month-to-
month. In November, we will be attending the
Midwest Trade Show in Pigeon Forge,
Tennessee, which will increase our sales and
exposure to other companies. We have projected
that Trade Show revenues will consist of
approximately 42% of our total revenue. The
cost of goods sold was roughly 8% of their total
revenue, bringing home a 92% gross profit,
which is exceptional. Our salary expense is the
largest expense we have to deal with. The salary
expense covers 47% of our total expenses. We
are projecting to have a net income of
$291,169.11 at the end of the fiscal year.
See Appendix (6)
Balance Sheet
For the time being, the cash we have on hand is $442,848.06. Legacy has total assets of $453,598
and total liabilities of $0 to start. Cash is mostly our only asset on hand at the moment. We also
have $100 worth of supplies on hand, and roughly $10,000 worth of computers and technology.
Legacys balance sheet is very standard right now, given that we havent started sales yet.
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See Appendix (7)
(Spreadsheets)
Appendix
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SWOT Analysis
Strengths Weakness
Sports merchandise is pre-bundled Contacts with VE firms may be
and offered in packages. compromised due to business meeting
Legacys commitment to the sports times and difference in time zones.
world will attract fans from all sports. Different staff this year might affect
Our unique package bundles will draw sales.
out sport fanatics and sport novices
who want to get into sports
Legacy is a well-known VE company.
Opportunities Threats
Sports is one of the leaders in favorite There will be an abundance of other
pastimes from consumers. Sport related VEI companies.
Sports Merchandise can be sold year- Bundles may include products that the
round due to the constant change in customer does not wish to purchase as
sport seasons. a package.
We offer a large range of products in
each package.
We can eventually expand what type
of packages we sell, such as luxury
and entertainment packages
Ability to constantly change sports
with the seasons
Appendix
Sample Non-VE Sales Contract
Corporate Sponsorship Contract
This agreement is effective as of date of agreement, between (Business Name) and Legacy
Inc. The parties hereby agree to the following terms and conditions:
(Business Name) is entering into a Corporate Sponsorship with Legacy Inc. for the amount of
(sponsorship value), paid in one installment for the 2017-2018 business year. All funds to this
company are virtual funds and will be used for the following benefits for Legacy:
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Covering payroll expenses for the employees of Legacy
The following benefits will be provided to (Business Name) in exchange for funds.
Advertising company name and logo as a sponsor on Legacys website.
Link to the company homepage
Logo displayed on company fliers
Name/logo featured on Legacys displays at our trade shows
_____________________
(CEO/CFO Name)
CEO/CFO
(Business Name)
_____________________
Kyri Chen
CEO
Legacy Inc.
1. Information is taken from a reliable source and the economys current condition should
allow for Legacy to not only succeed but to thrive.
2. The number of in store sales is shrinking especially when compared to online sales
which are growing in number every year, since Legacy will be making most of its sales
online this should be considered a good thing for our firm.
3. Since we are attempting to appeal to other high school students in VEI companies
around the world, the internet is a great way to connect to them as the youth are more
responsive to online connections and sales.
4. The numbers used to calculate our expenses in the breakeven point were taken from
last years projected expenses and not their actual expenses, as its likely that they were
over conservative in their spending and our costs could exceed theirs.
5. Our total projected payments do not exceed even half of our budget which is a safe
option as well always have a large sum of money available for potential advertising
campaigns and other optional expenses that could allow for Legacy to conduct more
business.
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6. Expenses used when calculating the income statement are different from those used
when calculating the breakeven analysis, however the difference is negligible and
shouldnt negatively affect anything long term.
7. A huge majority of our net worth remains in cash budget available to spend when
needed which is a safe option as we dont want to invest all of our money in equipment
and not be able to pay our employees.
Citations
The World Factbook: UNITED STATES. Central Intelligence Agency, Central Intelligence Agency,
19 Oct. 2017, [Link]/library/publications/the-world-factbook/geos/[Link].
CPI News Releases. U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, 15 Oct.
2017, [Link]/cpi/.
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