RD3

The New Way to Buy

Student Stationery

Proposers:
Daniel Dineen - 0602320
Ross Donnelly - 0602308
5th Year Aeronautical Engineering
Undergraduates
Our Proposal
This   document   outlines   a   proposal   to   launch   a  
vending   machine   company   specialising   in   the  
distribution   of   stationery  to  students.    The  retail  prices  
of   stationery,   particularly   in   the   West   End   of  
Glasgow,   is   substantially   inflated   compared   to   the  
wholesale  price.

Further   to   this,   with   the   University   of   Glasgow  

library’s   current   opening   hours   extending   well  
beyond  those  of   local  stationers   a  substantial  demand  
is   foreseen   if   a   vending   machine   is   placed   in   a   high  
footfall  area  within  the  building;  ensuring  convenience    
and  value  for  students,  where  and  when  they  need  it.

As   an   organisation,   we   feel   that   fairer   prices   can   be  

achieved   with   the   use   of   unmanned   vending  
machines.    We  are   committed  to  keeping  costs  as  low  
as   possible   and   passing   these   savings   on   to   our  
customers.

With   a   student   body   in   excess   of   20,000,   the  

University   of  Glasgow  is  the   ideal  place  to   launch  this  
service.

Demand
By   keeping  prices   fair,   we   hope   to   encourage  
students   to   use   these   vending   machines   as  
their   primary   source   of   stationery.   This   is  
required  to  make  the  business  sustainable.

Although   extensive   market   research   will   be  

required,   a   quick   survey   of   library   users  
indicated   that   around   90%   would   be  
interested  in  such  a  service.

Considering   the   number   of   students   at  

university   and   the   daily   usage   of   the   library;  
this  model  should  be  successful.

On   top   of   this,   the   risks   are   limited   in   this  

proposal.  The  only  initial  expenditure  required  
would   be   the   purchase   of   the   vending  
machine  and  the  first  batch  of  stock.
A Bit About Us
Daniel Dineen
22  year  old  Aerospace  Student
Business  Director
Tel:  07842  616  788   Email:  0602320d@student.gla.ac.uk

“I   would   not   put   such   a   proposal   forward   unless   I   was   100%  

behind  it.   I   feel  that   this   idea  fills  a  real   void  in  the  market   and  
would  be  highly  popular  with  the  student  body.  I  have  been  very  
encouraged   by   the   enthusiasm   I’ve   encountered   when  
discussing  the  idea  with  other  students.”

Ross Donnelly
22  year  old  Aerospace  Student
Creative  Director
Tel:  07842  616  788   Email:  0602308d@student.gla.ac.uk

“Whilst   on  a  late  night   library  session  I   noticed   someone  run  

out   of  paper  which  forced  them  to  abandon  their  study  for  the  
night.   I   thought   of   this   and   realised   it   must   be   a   fairly  
common   occurrence   in     the   library   and   dreamt   up   the  
stationery   vending   machine   that   night.   On   discussion   with  
Daniel   I   was   encouraged   by   the   enthusiasm   he   had   for   the    
idea  and  together  we  have  decided  to  pursue  it  further.“

The Machine
Although   rare,   stationery   vending   machines   are   in   existence.   In   fact  UK   firm,  
Intelligent   Vending,   have   developed   such   a   system,   although   it   is   not   yet   in   mass  
production.  The   sourcing  of   such   as   system,  therefore,   would  not  be  a  problem  and   the  
first  vending  machine  could  be  purchased  for  less  than  £4000.
Since   we   are   a   student   friendly  
organisation,   we   would   hope   to  
obtain   space   for   the   first   vending  
machine  in  the  library  rent-­‐free  or   on  
a   profit   share   basis.   Whereby,   a  
percentage   of   net   profits   are   either  
paid   directly   to   the   University   or  
invested  in  student  services.

This   reduces   the   set   up   cost   of   the  

business   and   will   allow   us   to   keep  
prices  to  a  minimum  for  our  end  user.
The Products
We  feel  that  the   major  selling   point  of  our  stationery   will  be  price,  although   convenience  
will  also  drive  sales.

In   order   to   maintain   low   prices  we   will   not   remain   faithful   to   individual   suppliers   and  
products,  initially,  and  will  buy  stock  based,  primarily,  on  cost.

However,  it  is  important  that  our  range  accurately  reflects  student  needs.  As  such,  
we  will  produce  a  list  of  lines  we  aim  to  stock  at  all  times.  This  will  include  expected  
quality  standards  and  cost.

Must Have Lines....

Premium  Notepad
  ~£3.50
Budget  Notepad
  ~£1.50
Project  Book
Report  Covers
Single  Pens
  ~£0.15
Multipack  Pens
Premium  Pens
  ~£3.00
Highlighter
Whiteboard  Markers
Sticky  Notes
USB  Flash  Drive
Pencil
Rubber
Ruler
Sharpener
Calculators
Correction  Fluid

The Figures
Let’s  look  at  our  Premium  Notepad  range.

An  example  of  s  suitable  product  is  the  Pukka  Jotta  (200  pages).

We  can  buy  150  for  £307.50  (£2.05  each)  from  a  wholesaler.

They  retail  at  approximately  £3.99  (at  Ryman).

If  we  sell  them  for  £3  we  make  £142.95  gross  profit  (46.3%  gross  
margin).This  should  easily  cover  operating  costs  and  provide  a  small  net  
profit.  We  also  have  scope  to  increase  the  retail  price  slightly  to  improve  
margin.
The Future
Greater   Glasgow   is   home   to   4   universities   and   a   number   of   higher  
education   colleges,   with   a   total   student   population   in   excess   of  
168,000.  This  means  it  is  feasible  to   start  a  small   distribution  network  
to  machines  located  in  each  of  these  establishments.

By   expanding   organically,   it  means   that  initial   investment   capital   is  

kept  to   a  minimum  as   more  machines  are   added  to  the   network   only  
when  a  successful,   profitable  formula  has  been   established.  Company  
profits   can   then   be   used   for   the   outright   purchase   of   new   vending  
equipment.

Economies   of   scale   means   that   as   the   customer   base   increases,  

greater   discounts   can   be   obtained   from   suppliers   and   costs   to   end  
users  are  reduced  further.

Distribution   can   be   done   by   regular   deliveries   to   each   site.   Or   sites  

can   be   supplied   with   products   in   bulk   and   paid   to   maintain   stock  
levels.   Equipment   servicing   will   be   the   responsibly   of   the   machine  
manufacturer.

Further   to  this,   even,   there   is   currently   no  major   stationery   vending  

companies   in   the   UK.   If   a   successful   model   can   be   established   in  
Glasgow  there  is  no  obvious  reason  it  cannot  be  rolled  out  nationally.