Pre-Feasibility Study

Online Daraz Store

(For Door Seals)

Prepared by:

Nabeel Ahmed Khan (20201-27355)

Syed Naqi Mohsin (20201- 27772)
Muhammad Saqib (20201-27475)
 Table of Contents

1. Executive Summary

2. Brief Description of Project and Product

2.1 Proposed Product Mix

2.2 Installed and Operational Capacities

3. Critical Factors

4. Geographical Potential for Investment

5. Potential Target Customers/Markets

6. Project Summaries

6.1 Project Economic

6.2 Project Financing
6.3 Project Cost
6.4 Revenue Generation

7. Contact Details

8. Key Assumptions

8.1 Operating Cost Assumptions

8.2 Revenue Assumptions
8.3 Financial Assumptions
1 EXECUTIVE SUMMARY

This Small Business Enterprise venture involves setting up an online door seal store
on Pakistan’s biggest e-commerce platform daraz.pk. The store is being set up to
cater the demands of people looking to make their rooms isothermal. The store will
cater the needs of middle class who will be using air conditioner in summer and are
fed up with all the leakages. The store is supposed to provide heat insulation solution
at a very affordable price.
Global warming is creating a great impact on the sales of air conditioners. Air
conditioner which was a luxury back then has now become a necessity for every
household, especially in Pakistan. With that, the need of insulating the rooms has
also become necessary. This store will cater the needs of its customer who are
looking to insulate their rooms by using a very low cost but effective door seals.

The total initial project cost for setting up a store on Daraz is PKR 150000. The
project is proposed to be financed through 100% equity. It is proposed to open a
single Daraz store with a single product initially and after successful launching and
ranking of product, will move towards multiple variants.

The proposed yearly sale estimated from Daraz hunting techniques is 6205 units of
one product. It is proposed to launch more products after successful launching of first
product and make this store an asset not the products through organic sales and
VVROs.

2 BRIEF DESCRIPTION OF PROJECT & PRODUCT

This report provides an overview of how to set up an online store, what should be
your product and how you should market your product.
The proposed start up involves sourcing of door seals from local whole seller in the
beginning and in future if the product’s demand increased then sourcing could be
done from China and selling it through an online store on Daraz. The online shop will
be accessible to all 24 hours a day.

2.1 Proposed Product Mix

The product mix would include products from different niche but just to be start with, door
seals is the first product. However, plans are under way to hunt and introduce more
products and make this store a one-stop shop for products from variety of niches.
2.2 Installed and Operational Capacities
The initial cost to start this store is calculated to be PKR 150000 since setting up
store is free; this amount will be used for inventory building. It is proposed to sale
6205 units of this one product in first year.

3 CRITICAL FACTORS

The most critical factors are mentioned below:

• Continuous sourcing of low-priced product as the competition for any

product will get intense with time in terms of unit price.
• Employ correct marketing strategies at correct platform for the
targeted audience.
• Proper handling of online store; learn new tricks and new ways to rank
your product on first page and top position.

4 GEOGRAPHICAL POTENTIAL FOR INVESTMENT

This online store will be accessible to everyone across Pakistan. Pakistan being a
country where summer season prevails over any other season, this product will be
proved to be a potential game changer if right marketing strategies were implied.

5 POTENTIAL TARGET CUSTOMERS / MARKETS

Target customer for the proposed online store would be men and women above age
of 16 because mostly they have the idea or have the access to online stores. These
above 16-year-old are proposed to be belonged to middle and upper middle-class
stratum.
6 PROJECT COST SUMMARIES

6.1 Project Economics

The sourcing cost at the beginning is finalized at PKR 80 per unit and the selling price
would be PKR 200 with a return of around 40%.

Description PKR
Sourcing Price 80
Selling Price 200
Commission (12.90%) 25.8
Delivery Charges (paid by customer) 49
Flyer Cost 8
Referral Fee (1.25% on selling price) 2.5
VAT (Commission + Referral Fee) x 13% 3.67
Total Cost (Sourcing + Commission + Flyer + Referral Fee +
VAT)
120
Profit per Unit 80
Profit % per Unit 40%

6.2 Project Financing

The mode of financing for this project will be 100% on equity basis. No loan will
be taken from any lending source at initial stages.

6.3 Project Cost

Fixed Cost:
Following has been identified as Fixed Cost

Laptop 25000
Bike 15000
Cell Phone 20000
Working Capital Cost:
Following has been identified as Working Capital Cost

Opening Inventory 40800

Marketing and Ads 3000
Electricity 5000
Stationery 1000
Bike Maintenance 1500
Internet Connection 750
Mobile Allowance 1000
Fuel Allowance 1500
Rider’s Delivery Charges 5000
Graphic Design Team; 1 person 5000
Storage (own House) 7500
Rent for office (Own House) 10000

6.4 Revenue Generation

The sourcing cost of the product is PKR 80 and the selling price is PKR 200 with a return of 40%.
The projected sales of one product for the first month is forecasted to remain at 510 units. Business
has a cash balance of Rs 113,797 at the end of 1 st month.

Unit Quantity Revenue

Price (PKR)
First Month 200 510 102000
2nd Month at 5% growth 200 513 102600
3rd Month at 5% growth 200 515 103000
4th Month at 5% growth 200 518 103600
5th Month at 5% growth 200 520 104000
6th Month at 5% growth 200 523 104600
7th Month at 5% growth 200 525 105000
8th Month at 5% growth 200 528 105600
9th Month at 5% growth 200 531 106200
10th Month at 5% growth 200 533 106600
11th Month at 5% growth 200 536 107200
12th Month at 5% growth 200 539 107800
Total 6291 1258200

7 CONTACT DETAILS

The contact detail of our main service provider is mentioned below:

Al Noor Plastics Jurriya Bazar, Saddar karachi