Liquidation Dealz

Business Development Plan

Contract
3988 Alum Creek Dr.
Columbus, OH 43207
614-333-3306
Liquidationdealz.com

Company mission is to provide quality products for half

the price
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Table of Contents
1. Executive Summary............................................................................................................................................
2. Company Summary............................................................................................................................................
2.1 Introduction....................................................................................................................................................
2.2 Objective........................................................................................................................................................
2.3 Mission...........................................................................................................................................................
2.4 Operational Plan.............................................................................................................................................
2.4.1 Products.......................................................................................................................................................
2.4.2 Ideal Customer............................................................................................................................................
2.4.3 Market Penetration Strategies......................................................................................................................
2.4.4 Pricing strategy............................................................................................................................................
2.4.5 High Quality Products Strategy...................................................................................................................
2.4.6 Leading Technology..................................................................................................................................
2.4.7 Opening Schedule......................................................................................................................................
2.4.8 Company Ownership.................................................................................................................................
2.4.9 Revenue Streams.......................................................................................................................................
2.5 Expansion Plan.............................................................................................................................................
2.6 Start-Up Cost................................................................................................................................................
2.6.1 Summary of Startup Cost..........................................................................................................................
2.7 Management Team.......................................................................................................................................
3.0 Market Analysis..............................................................................................................................................
3.1 Target Market Demographics.......................................................................................................................
3.2 Types of Liquidation Inventory....................................................................................................................
3.3 Liquidation Market Analysis........................................................................................................................
3.3.1 Where Does Liquidation Stock Come From?...........................................................................................
3.3.2 Large Liquidation Companies...................................................................................................................
3.3.3 Experienced Liquidation Buyers...............................................................................................................
3.3.4 Smaller Liquidation Buyers......................................................................................................................
3.3.5 What’s a shelf pull?..................................................................................................................................
3.3.6 What is bankrupt stock?............................................................................................................................
3.3.7 How to buy Liquidation Stock?................................................................................................................
3.3.8 Why are retailers so desperate to clear these products out?......................................................................
3.3.9 Techniques to Buy Liquidation Stock.......................................................................................................
3.4 Trends in the Liquidation Business..............................................................................................................
3.5 US Retail Sales Forecast to Grow by 3.8% to 4.4%.....................................................................................
3.6 Resale Market Trends...................................................................................................................................
3.7 Secondhand Sales Expected to Double.........................................................................................................
3.8 Traditional Retailers Trying Resale..............................................................................................................
4. Competitor Analysis.........................................................................................................................................
4.1 Competitive Landscape................................................................................................................................
4.2 Liquidation Auctions in Columbus, OH.......................................................................................................
4.3 Barriers to Entry...........................................................................................................................................
4.4 Major Direct Competitors.............................................................................................................................
4.5 Competitive Edges.......................................................................................................................................

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5.0 Sales Strategy..................................................................................................................................................
5.1 Marketing Initiatives....................................................................................................................................
5.2 Pricing Strategy............................................................................................................................................
5.3 Internet Marketing Strategy..........................................................................................................................
5.4 Print and Electronic Media Marketing..........................................................................................................
5.5 Mobile Marketing.........................................................................................................................................
5.6 Marketing Budget.........................................................................................................................................
6. SWOT Analysis.................................................................................................................................................
7.0 Financial Plan.................................................................................................................................................
7.1 Financial Assumptions.................................................................................................................................
7.2 Revenue Projections.....................................................................................................................................
7.2.1 Monthly Revenue Projection First Year....................................................................................................
7.2.2 Five Year Revenue Projections.................................................................................................................
7.2.3 Revenue Projections by Products..............................................................................................................
7.3 Five Years Profit & Loss Projections...........................................................................................................
7.4 Projected Cash Flows...................................................................................................................................
7.5 Break-Even Analysis....................................................................................................................................
7.6 Scenario Analysis.........................................................................................................................................
7.7 Investment Analysis.....................................................................................................................................
7.8 Loan Amortization Schedule........................................................................................................................
8. Appendix...........................................................................................................................................................
8.1 Monthly Profit and Loss Projections............................................................................................................
8.2 Quarterly Profit and Loss Projection Year 2 & 3..........................................................................................
8.3 Quarterly Profit and Loss Projection Year 4 & 5..........................................................................................

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1. Executive Summary
Liquidation Dealz is a resale business located at
3899 Alum Creek Dr, Columbus, OH, 43207.
Having well maintained storefront covering
2,500 sq.ft space which providing variety of
liquidation products to its targeted customers.
Liquidation Dealz sells name brand liquidation
products from big box retailers like Walmart
and Amazon. Liquidation products can be overstock, refurbished, or customer returns.
Liquidation Dealz buy truckloads of merchandise from big box retailers when they go out
of business. We resell liquidated merchandise to our customers at a deep discount of 25%-
Introduction 75% off MSRP. Mr. Bennett holding (100%) share of the Company. Mr. Bennett will
occupy the position of Chief Executive Officer. Liquidation Dealz will beat any retail or
online price. It has a large selection of electronics and appliances, like smart TV's, smart
phones, laptops, tablets, game consoles, air fryers, electric pressure cookers, air purifiers,
and more. Company 25% of Products are Brand-New, 50% are Like-New and 25% are
Used products. It was founded in 2020 by a single member LLC. Its mission is to provide
effective and affordable products to residents of Columbus Ohio at cheapest rate and
enrich the development of the community. Keys to success of Liquidation Dealz are: Fast
reliable service, affordable costs, quality and price are our number one priority.
Liquidation resale business industry is a narrow industry which is expanding surprisingly
because of the high demands. The Products provided in this type of business are Home
Goods, Electronics, Kitchen Housewares, Appliances, and Toys.

• Overstock: These are products with brand new condition. This is when a company like
Walmart has too much of product and they need to get rid of it fast, in order to make
Liquidation
more room for new inventory.
Products
• Refurbished: These are products like new conditions. This is when a product has been
restored to original condition.
• Customer Returns: These are new and used products. This is when a customer returns
item to store for any reason. Some boxes have never been opened and some items

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 people use one time then return it.
Strategic
 To sell everything between 25-75% off retail price
 To offer quality products at affordable prices.
 Save customer money
 To sell the product on retail store, company website, Mobile App Auctions, and third-
party websites and apps.
Objective
 To utilize online marketing and advertising tactics to keep the competition at bay
 To earn good reputation in the market.
Financial
 To turn into a profit generating company from first operating year.
 To recoup initial investment within the first year.
 To secure net profit upto 26.62% of gross revenue.
 Affordable price for quality products
 Extensive assortment of general merchandise, a product for everyone
 Knowledge and understanding of liquidation market and customer needs
 Working closely with customers to build relationships and alliances satisfying the high

Keys to Success standards of world-wide consumers

 Work with trusted liquidation wholesalers
 Best use of leading technology
 Develop skilled and self-motivated team
 Use effective and efficient marketing strategy.
Days Timings Description
Friday 10:00 AM to 6:00 PM 8 Hrs
Opening Saturday 10:00 AM to 6:00 PM 8 Hrs
Schedule
Sunday 10:00 AM to 6:00 PM 8 Hrs
Monday 10:00 AM to 6:00 PM 8 Hrs
Total startup funds required are in order of US $68,600. The funds US $30,000 will be
raised and geared from the owner as equity financing and remaining US $38,600 will be
Capital Cost
raised through loan (debt financing).

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 Description FY-1 FY-2 FY-3 FY-4 FY-5
Gross Revenue $150,000 $241,500 $320,820 $351,702 $392,610
Direct Cost $75,000 $120,750 $160,410 $175,851 $196,305
5 Years
Operational Expenses $26,540 $61,740 $61,740 $61,740 $61,740
Financial
Interest Expenses $2,702 $2,232 $1,729 $1,191 $616
Projections
Sales Taxes $11,250 $18,113 $24,062 $26,378 $29,446
N et Profit $34,508 $38,665 $72,879 $86,542 $104,503

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2. Company Summary
2.1 Introduction

Liquidation Dealz is a resale business located at 3899 Alum Creek Dr,

Columbus, OH, 43207. Having well maintained storefront covering 2,500
sq.ft space which providing variety of liquidation products to its targeted
customers. Liquidation Dealz sells name brand liquidation products from big
box retailers like Walmart and Amazon. Liquidation products can be
overstock, refurbished, or customer returns. Liquidation Dealz buy truckloads of merchandise from big box
retailers when they go out of business. We resell liquidated merchandise to our customers at a deep discount
of 25%-75% off MSRP. Mr. Bennett holding (100%) share of the Company. Mr. Bennett will occupy the
position of Chief Executive Officer. Liquidation Dealz will beat any retail or online price. It has a large
selection of electronics and appliances, like smart TV's, smart phones, laptops, tablets, game consoles, air
fryers, electric pressure cookers, air purifiers, and more. Company 25% of Products are Brand-New, 50%
are Like-New and 25% are Used products. It was founded in 2020 by a single member LLC. Its mission is
to provide effective and affordable products to residents of Columbus Ohio at cheapest rate and enrich the
development of the community. Keys to success of Liquidation Dealz are: Fast reliable service, affordable
costs, quality and price are our number one priority. Liquidation resale business industry is a narrow
industry which is expanding surprisingly because of the high demands. The Products provided in this type
of business are: Home Goods, Electronics, Kitchen Housewares, Appliances, and Toys.

2.2 Objective
Liquidation Dealz objective is to save customer money through providing quality products.
2.3 Mission

Liquidation Dealz mission is to sale quality products at half price .

2.4 Operational Plan

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Liquidation Dealz will be established at 3988 Alum Creek Dr. Columbus, Oh 43207 and will be registered
as Liquidation Resell Business. The company will focus to resale appliances, electronics, tools, toys, home,
bedding, etc. We believe that people do not want to pay expensive prices for name brand products at stores
like Walmart. We will make products affordable to most people. We will only charge 50% or less and will
save money of our customer. The community or people with demographics want to save money will be our
target market. The other target market includes impulse buyers and middle class. We will buy liquidated
inventory by the truckload/pallet from big box retailers like Walmart and Amazon and resell this inventory
for deep discount of 50% off retail price. Right from the establishment company will be frown
exponentially and will serves to millions of customers. Liquidation Dealz will resale following three types
of liquidation products:

• Overstock: These are products with brand new

condition. This is when a company like Walmart
has too much of product and they need to get rid
of it fast, in order to make more room for new
inventory. This is also when a business goes out
of business and sells all of its leftover inventory.
• Refurbished: These are products like new
conditions. This is when a product has been
restored to original condition.
• Customer Returns: These are new and used
products. This is when a customer returns item to
store for any reason. Some boxes have never
been opened and some items people use one time
then return it.
2.4.1 Products

Liquidation Dealz will offer following products:

 Small Appliances  Kitchen Housewares
 Electronics  Power Tools
 Smart Phones  Hand Tools
 Laptops  Home Goods
 Tablets  Home Decor
 Smart TV  Toys
 Gaming Console

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2.4.2 Ideal Customer

Following will be the ideal customers of Liquidation Deals.

 People having age of 35-55
 Middle class-Upper class
 People of local Communities
 Primarily Females
 Bargain Hunters
 People who like to save money
 Customers residing in Columbus, Ohio &
surrounding suburbs
 People who want cheapest price point
 Customers who value our expertise

2.4.3 Market Penetration Strategies

Liquidation Dealz will adopt following strategies to make the business run successfully:

• At Liquidation Dealz we will work with trusted liquidation wholesalers.

• For best return on investment, it will be imperative to keep up with the current market situations
and determine what will be sold quickly.
• We would sale products on physical store as well as online. We will create a Mobile App where
customers can bid for purchasing liquidation products.
• Partnership is always a good idea in order to expand the business. In long run we may develop
partnership with wholesale liquidators.
• We will develop a competitive strong team of employees and will hire employees for long term
who will reflect on the quality of services and expand reliable customer support.
• In order to be successful, we will be lucrative in terms of operations, sales, marketing, finance and
administration. We understand that we need to be as comprehensive as possible and inculcate each
aspect of venture to make business successful.
• We will build an amicable network, good behavior and long-lasting relationships as this is the key
to building a successful clientele network. Our aim is to build long term relationships with clients
and create long term income generating relationships.
• We will use a lucrative marketing strategy as it is it is hard to increase clientele base without proper
marketing.

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 • In order to track our progress, we will use a meticulous record keeping, accounting and
bookkeeping system. We will track everything from new contacts to number to shipments and
number of sales made etc.
2.4.4 Pricing strategy

Liquidation Dealz will adopt efficient and cost effective pricing strategy. Our pricing strategy will include
50% off normal retail price at Walmart. We believe that biggest advantage of retail liquidation is the price.
For instance, wholesale pallets can be purchased for well below wholesale if people buy from a liquidation
enterprise. Moreover, while most liquidation companies do primarily sell bankruptcy stock, surplus
inventory, and refurbished merchandise, the demand for wholesale pallets has increased substantially over
the last few years.
2.4.5 High Quality Products Strategy

Liquidation Dealz will offer high quality products. Many of the products that are available are surplus
inventory, bankruptcy stock, and refurbished items with original high quality. This is because the reputation
of the top liquidators in the market is of the utmost importance in order for them to stay at the top of the
liquidation hierarchy. Moreover, we will have very strict quality control guidelines to ensure that only top
quality products are available for sale. Liquidation Dealz may sign exclusive contracts with top liquidators
for guarantee to provide high quality products or otherwise we will prefer to purchase products from such
liquidators have exclusive contracts on quality with manufacturers of the products.

2.4.6 Leading Technology

Liquidation Dealz will involve the use leading technology and techniques to put its business ahead from its
competitors. Company will create a Mobile App where customers can bid on liquidation products. The
bidder who will quote price will win the products. This App will be operative on Android and iPhone as
well.
2.4.7 Opening Schedule

Liquidation Dealz Retail warehouse center/store will be opened at 3988 Alum Creek Dr. Columbus, Oh
43207 as per the following schedule:

Days Timings Description

Friday 10:00 AM to 6:00 PM 8 Hrs
Saturday 10:00 AM to 6:00 PM 8 Hrs
Sunday 10:00 AM to 6:00 PM 8 Hrs
Monday 10:00 AM to 6:00 PM 8 Hrs

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The administration office is also built at the same location so the management or employees can have easy
access across the departments.

2.4.8 Company Ownership

The company will be fully owned by Nick Bennett, who is USA citizen. The founder and owner of the
company will invest US $30,000 and US $38,600 will be raised through debt. However, the ownership will
be 100% with Nick Bennett.

Shareholder Name: Gender Ownership Investment Citizenship

Nick Bennett Male 100% USD 30,000 USA

2.4.9 Revenue Streams

Current revenue streams of the company will be Retail and Online Selling. From 2 nd year, company will
start Auctions Selling and from 3rd year Third Party selling will be started. Third party selling include Pallet
Sales, Truckload Broker, Exporter etc.

Revenue Stream FY 1 FY 2 FY 3 FY 4 FY 5
Retail Sale
Online Sale
Auction App Sale
Third Party Sale

2.5 Expansion Plan

In the 1st phase Liquidation Dealz will be launched in South Columbus (Obetz). Once the desired market
penetration and growth rates achieved, company will move to next phases for expanding the business and
catering the markets. In 2nd phase we will operate in East Columbus (Reynoldsburg). In 3rd phase business
will be expanded to North Columbus (Westerville). In 4th phase West Columbus (Hilliard) will be included
as part of target market. In 5th phase Central (Downtown) will be added. The exact time spam for moving
one phase to other depends on the market scenario, overall performance of the company and willingness of
the stakeholders.

Location 1: South Columbus(Obetz)

Location 2: East Columbus(Reynoldsburg)

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 Location 4: West Columbus(Hilliard)

Location 5: Central(Downtown)

2.6 Start-Up Cost

The table below outlines the start-up needs of the Liquidation Dealz. The total funds required for
establishing the business are in order of USD 68,600. The funds will be raised and geared from the owners
as equity financing and debt financing. Liquidation business is a capital as well as labor intensive. Capital
required for purchasing of furniture and fixture, computer & other IT equipment, legal expenses, accounting
services, marketing and promotional, maintenance expenses, acquisition of building, utilities, inventory and
payroll. Following table and graph walks through the different requirements and describes how start-up
needs are decomposed among various expenses. It is important to note that most of the funds will be used
for purchasing the fixed assets and inventory.

Summary of Startup Expenses Amount in USD

Fixes Assets  
Furniture & Fixture $2,500
Computer & Other IT Equipment $500
POS System and Signage $2,000
Total Fixed Assets Cost $5,000
Operational Expenses  
Legal Expenses $2,400
Bookkeeper/Accountant Expenses $2,400
Marketing & Advertising $6,000
Maintenance Expenses $1,200
Rent $21,600
Utilities Expenses $6,000
Total Operational Cost $39,600
Salary  
Payroll $13,500

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 Total Salary $13,500
Current Assets  
Cash On Hand Required $500
On Hand Inventory Requirements $10,000
Total $10,500
Total Funds Requirement 68,600

2.6.1 Summary of Startup Cost

Startup Cost Amount in USD (%)

Fixed Assets $5,000 7.29%
Operational Expenses $39,600 57.73%
Salary $13,500 19.68%
Current Assets $10,500 15.31%
Total $68,600 100.00%
Capital    
Equity Financing $30,000 43.73%
Loan Financing $38,600 56.27%

2.7 Management Team

Nick Bennett is the owner and founder of Liquidation Dealz. He has extensive exposure of liquidation sales
and market. He is with distinctive concept of business having exceptional work ethics. The core strength of

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Nick Bennett includes his unparalleled local knowledge and understanding of the liquidation industry. He is
fully aware about the problems and challenges of this business and has planned a comprehensive
operational strategy to run the business successfully. One of the reasons behind the success of this business
is that he has done cavernous analysis of the market. It has been planed to engage the staff depicted in the
following Organogram.

CEO will oversee all the administration work. Two Sales Associates will be engaged one for full time and
other for part time. Full time Sales Associate will be engages for 128 hours per month at $10 per hour and
Part Time Sales Associate will be engages for 64 hours per month at $10 per hour.

Description FY 1 FY 2 FY 3 FY 4 FY 5
Sale Associate 1 (full time)          
Monthly Hours 128 128 128 128 128
Hourly Rate $10 $10 $10 $10 $10
Annual Wage $15,360 $15,360 $15,360 $15,360 $15,360
Sale Associate 1 (part time)          
Monthly Hours 64 64 64 64 64
Hourly Rate $10 $10 $10 $10 $10
Annual Wage $7,680 $7,680 $7,680 $7,680 $7,680
Total Payment $23,040 $23,040 $23,040 $23,040 $23,040

3.0 Market Analysis

3.1 Target Market Demographics

The success of any business heavily depends on the market

demographics. The market demographics show how much potential is
there to boost the business. Moreover, market demographics are also
critical for long term growth and sustainability of the business.

The target market of Liquidation Dealz is Columbus, Ohio, in the first phase services will be offered in the
Columbus city, however, at later stage business may be extended to other cities and states of USA.
Columbus is the state capital and the most populous city in the U.S. state of Ohio. In 2018, Columbus, OH

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had a population of 896k people with a median age of 32.3 and a median household income of $52,971.
Between 2017 and 2018 the population of Columbus, OH grew from 881,901 to 895,877, a 1.58% increase
and its median household income grew from $51,708 to $52,971, a 2.44% increase. The population of
Columbus, OH is 54.3% White Alone, 29% Black or African American Alone, and 6.13% Asian Alone.
N/A% of the people in Columbus, OH speak a non-English language, and 92.4% are U.S. citizens.
Columbus is the second most populous city in the Midwest, after Chicago, Illinois. It is the core city of
the Columbus, OH Metropolitan Statistical Area, which encompasses ten counties with a population of
2,106,541, it is Ohio's second-largest metropolitan area. Columbus is the county seat of Franklin
County. The municipality has also annexed portions of adjoining Delaware and Fairfield counties. Named
for explorer Christopher Columbus, the city was founded in 1812, at the confluence of
the Scioto and Olentangy rivers, and assumed the functions of state capital in 1816.

The city has a diverse economy based on education, government, insurance, banking, defense, aviation,
food, clothes, logistics, steel, energy, medical research, health care, hospitality, retail, and technology. The

metropolitan area is home to the Battelle Memorial Institute, the world's largest private research and
development foundation; Chemical Abstracts Service, the world's largest clearinghouse of chemical
information; NetJets, the world's largest fractional ownership jet aircraft fleet; and Ohio State University,
one of the largest universities in the United States. As of 2018, the city has the headquarters of five
corporations in the U.S. Fortune 500 American Electric Power, Cardinal Health, L
Brands, Nationwide, and Big Lots, just out of the top 500. Columbus is an excellent location for business.
1

The local economy is not dominated by any single industry; and as a result is more stable than other
locations.  The Columbus economy is balanced by a combination of education, technology, government,
research, insurance and health care as major employers in the region .2

1
https://en.wikipedia.org/wiki/Columbus,_Ohio#/media/File:Columbus_Pano_2.jpg
2
https://www.columbus.gov/development/economic-development/Business-Assistance/

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3.2 Types of Liquidation Inventory

Companies liquidate a wide variety of things, including inventory and fixed, capital assets.  In terms of
inventory, you can generally classify liquidation inventory into several categories:

1) Overstock:  Overstock inventory is brand new inventory that a company has determined it must
sell for one reason or another.  Typically, this is because they have either over-bought or under-sold
their projected volume.  At some point, companies must move out the old overstock product to
make room on store shelves and warehouse shelves for new products.  It might be the newest
models of electronics or next season's apparel.  The price of overstock liquidation product is
typically the highest because it is in brand new condition and can immediately and easily be resold
by the buyers.
2) Customer Returns:  Retailers and manufacturers receive customer returns all the time.  With more
and more liberal return policies at retailers like Costco and Walmart, consumers take the liberty of
returning products for virtually any reason.
3) Refurbished Returns:  Some returns will be refurbished by the retailer before being liquidated.
Depending on the product and the amount of repair needed to put it back into 'like new' condition,
retailers have figured out that they can invest $x/unit but then resell for $x+$y/unit because the
products are in resalable condition.
4) Un-refurbished Returns:  As the name implies, these are returns that have not been refurbished.
Also known as raw returns, often these loads will be palletized as they came back to the retailer.
Typically, the retailer will want to 'touch' the units as few times as possible if they don't intend to
refurbish them.  Every touch adds cost to the product and increases the loss they will incur on the
inventory.  Un-refurbished returns will always be less expensive.
5) End of Life:  This inventory category consists of products that a manufacturer is phasing out of
production.  Most likely, they have introduced a new model.  It is similar to overstock inventory in
that the product is typically in new condition, however, it is likely older and it is almost certain to
have been made obsolete by the introduction of the next generation model.
3.3 Liquidation Market Analysis
When people start out selling online, their biggest challenge is often which products to buy and where to
buy them from. There are a number of easily accessible products sources that many online sellers start with
flea markets, arbitrage, used books and so on. Liquidation or clearance stock is only a little harder to access,
you just need a resale certificate and there’s a lot of potential for profit. But people need to do their research
before they jump into the world of liquidation. A lot of sellers start completely blind and with very high
expectations. They’ve seen prices up to 95% off retail, so think that they’re going to invest a thousand
dollars and make a million. That’s just not the case. So here’s everything you need to know before you

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start sourcing clearance products. I’ll explain how the liquidation business works, including all the industry
jargon.
3.3.1 Where Does Liquidation Stock Come From?
Retailers and internet sellers across the industry liquidate stock for a number of reasons. There are customer
returns, “shelf pulls” and “warehouse pulls” of products that for different reasons come back into their
warehouse. It’s essentially a “reverse logistics” issue passing products back up the supply chain to
warehouses and distribution centers, instead of down the supply chain into stores. When these products
come back, they need to be accounted for then they need to be resold or liquidated. Retailers like Walmart,
for example, have a tremendous amount of reverse logistics products that come into the Walmart returns
center. These products need to be moved on. Walmart and other large retailers have a system of selling
them by the truckload. They call it a “load” in the industry, which is typically 24 pallets. The peak season
for liquidation stock usually comes in the first quarter of the year January through March. A lot of
Christmas returns are coming back then, such as unwanted gifts and buyer remorse returns. The more
liberal return policies that the large retailers have, the more returns that come back, and the more products
that float into secondary markets – the various outlets where clearance stock is sold.

3.3.2 Large Liquidation Companies

The big liquidation companies buy products in bulk 30 to 40 truckloads and then resell it to smaller
liquidation players. The retailers often agree contracts with the big liquidators. They’ll say, “Hey, you won
the contract to buy all our liquidation product for the next year.” The contract will be at a specific rate, such
as 10 cents on the dollar, meaning that the liquidator will pay 10% of the value for everything that comes
from that retailer. Whether they get 100 truckloads, two truckloads or one truckload, they have to take all
the product that comes in based on their contract. The contracts switch every year, with different players
winning different contracts. That’s the way the larger liquidators buy the product. Other than information
from previous purchases, a lot of the buying is completely blind. Every retailer works the liquidation
business differently. Taking Walmart as an example again, they sell “unmanifested” loads at a cost
anywhere between $5,000 to $10,000. A manifest is a document that tells in detail every single unit that’s
on a pallet or in a truckload, so with an unmanifested load you just do not know what you’re getting. For a
consumer or somebody that’s just trying to break into the liquidation business this is not a smart way to buy
liquidation products, you need to have a lot more detail.
3.3.3 Experienced Liquidation Buyers
Some retailers and online sellers will buy whole truckloads of clearance stock, either direct from retailers or
from large liquidation companies. In this case, the buyer will come in and agree to take a load with a brief
description, then go and pick up the trailer full of product 24 pallets. Some of these buyers have retail
stores, some are online sellers that sell it on eBay or other platforms, some sell on flea markets or garage

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sales. There are a lot of different venues to sell these types of product. They’ll document all the units they
have, then go and sell it for a profit. Depending on the load that they get, there can be a lot of profit to be
made. It all depends on the products in the load, and the best channel to sell that load through. Every retailer
out there from Macy’s to Staples to Amazon has products that they need to dispose of, so there’s a huge
variety and volume of liquidation stock. Smaller sellers can get overwhelmed by the sheer volume if they
buy an entire truckload. It’s also a large investment of capital, and a considerable risk. Successful buyers at
this scale have normally gained a lot of experience by buying smaller lots over a number of years.
3.3.4 Smaller Liquidation Buyers
Some of the larger liquidation companies will break down the stock they receive, grade it, categorize it,
group it into lots, and create a detailed manifest so they can sell it on to smaller retailers, online sellers and
other businesses. There’s a lot of labor involved in that process, and these businesses need to add their own
markup, so the price of liquidation stock bought this way is higher. However, the lot sizes are much smaller
and there is a detailed manifest listing the exact products included in the lot, along with their condition or
grade. There is much lower capital investment and risk involved in buying this way.
3.3.5 What’s a shelf pull?
Shelf pulls are a major reason for goods going to liquidation. A shelf pull is a product that was on the shelf
in a retail store, but was never sold to a customer. They are typically brand new products that might show
minor wear and tear they’ve often been on the shelf for a while, and might have been moved around several
times. Why didn’t the product sell? It might have been in the wrong section of the store, or they couldn’t
identify what it was, or it could be a seasonal product such as Christmas lights. They’ll pull those off the
shelf, return them to the warehouse, and liquidate the stock. It can be a real profit center if someone is
willing to buy all the Christmas lights and then wait until October or November of the following year to sell
them.
3.3.6 What is bankrupt stock?
When people think of liquidation they often think of bankruptcies. There are some very big players in
bankruptcy auctions, yet most of the goods from failed businesses don’t end up in the liquidation market.
The biggest player in the US is a company by the name of Gordon Brothers. They go to the courts and
acquire the stock of bankrupt companies. When Circuit City filed for Chapter 11 bankruptcy, for example,
their inventory would have gone to a company like Gordon Brothers. The typical methodology for bankrupt
stock is to liquidate it at the store level, rather than through the wholesale liquidation business. They tend to
get a higher rate of return selling it in the retail store, as a “going out of business” sale. Some odds and ends
might hit the liquidation channel, but it’s not usually the most desirable products.
3.3.7 How to buy Liquidation Stock?

19
So you’re buying goods at a very low price and selling it on at market value. It’s got to be too good to be
true, right? First of all, it’s a lot of work and definitely not easy money. You have to buy the products,
receive the products, process the products. The starting point for price in the industry is MSRP the
Manufacturer’s Suggested Retail Price. Typically, those prices are very high. When people tell you 80%
off, 90% off, 95% off MSRP, it’s an industry standard that everybody uses but it’s not the true value of the
product. The true value of the product is the lowest price that a consumer can find it for sale, not the
suggested retail price. Sellers get their hopes up because they base their calculations on MSRP, and think
75% off means they’re going to quadruple their money. The reality is quite different. There’s a lot of work
in processing, there are a lot of fees if you’re going to sell it online, and there’s a lot of overhead to sell it in
a retail store. There are profits to be made from selling liquidation stock, but it’s most definitely not a get-
rich-quick scheme. It is believed that the right amount of profit to make on liquidated product is 30% to
60%. A lot of buyers in the marketplace don’t want to touch the product unless they can make a 100% to
300% profit on it. That’s very hard to do when you factor in all of the various expenses involved.
3.3.8 Why are retailers so desperate to clear these products out?
Big retailers normally only sell new products in their retail stores. Processing returns and shelf pulls is a
difficult and time-consuming process. They just want to write off the problem, take the loss, and let a
liquidator handle all the logistics. That’s way they get it out of their warehouses to make space for more
profitable new products. They don’t have to pay the cost of labor to sort through all the returns, grade them,
and re-categorize them. Even if they did go to all that trouble, only a small fraction of the stock would be in
good enough condition to be sent back to stores and sold as new.
3.3.9 Techniques to Buy Liquidation Stock
1) Get a Resale Certificate: A resale certificate is something that you need in order to
purchase from many liquidation companies. My company, for example, will not do
business with you unless you have one. Some liquidation companies will allow you to
purchase without a resale certificate, but generally you do need to have one. A resale
certificate registers with your state that you are a business, and do not need to pay sales tax
on the products that you buy. Most larger liquidation companies only want to deal with
people with resale certificates, because it says, “Hey, I’m serious about my business, I want
to build my business. I am registered with the state and I intend to buy product at a
wholesale level.” It takes a few days to register, and every state has its own process. Some
people don’t want to register for a resale certificate because they don’t want to pay their
taxes. But if you’re serious about building your business, there’s no way around that one.
2) Analyze the Manifest: If you are a newcomer to the liquidation business, it is
recommended that you only buy manifested product. Manifests really reduce the amount of
risk that you have in purchasing liquidation, because you’re able to see exactly what’s

20
 there. The manifest is extremely important because it allows you to analyze the contents of
the lot that you are thinking about buying. Every manifest has a different structure of how
it’s laid out, and they can be a little difficult to read, but it is very important that you are
able to analyze the pricing in some way. Without the manifest you’re just gambling, you
won’t have a clue of what you’re getting. Maybe the title will say “cosmetics”, but the
contents could be almost anything within that very broad category. Even if you purchase a
manifested lot, you will still have to take a detailed inventory yourself before you sell it, go
through and scan every single barcode to find out exactly what the contents are. Only then
will you know how good the supplier’s manifest really was.
3) Understand Manifest Variance: Secondary markets, the channels through which
clearance stock and other unwanted goods are bought and sold are growing at an estimated
35% per year to over $400 billion annually in the United States. So the market is absolutely
huge. Retailers are getting massive quantities of product filling their returns centers and
they need to clear it out fast. Half the time they don’t even know what they have, and they
liquidate it by the truckload to move it quickly. That’s why they often only sell
unmanifested truckloads. As the stock moves down the chain, some liquidators take the
time to manifest it to list out exactly what’s in the load. You pay a higher price for
manifested loads, because it requires a lot of labor. But even then, they all state that there’s
a variance. Some companies state that their manifest variance is plus or minus 5%, for
example. So even though it’s manifested there’s a margin of error built in, typically
between 2% and 10%. We have a variance in our own business of 3%, and only very rarely
will you find manifests that are 100% accurate. So always read the fine print before
purchasing any liquidation product. If the liquidator claims 97% manifest accuracy and you
found it was only 90% accurate, you should be entitled to 7% of your money back.
4) Know All Your Costs: A lot of our customers miss various costs. They might miscalculate
marketplace fees, or shipping costs, or the cost of processing the inventory. Another one
that happens all the time is that people don’t factor in the “cost of money”. They’ll invest a
lot of their money into a truckload of product, but then it takes them six months to process
and sell it. That’s a very long time to move a trailer-load of product. In that time, they
might lose out on other opportunities, because their funds are tied up in this one truckload.
The time-value of money is probably one of the biggest factors that even experienced
sellers neglect. There are a number of auction driven platforms for liquidated stock, and
these charge a “buyer’s premium”. It’s usually a percentage of the value, between 3% and
5%. A lot of people get very excited in the auction atmosphere, the winning concept
becomes a very big deal for them. They get outbid by $10, then want to get the high bid

21
 back, and gradually the price goes up. After they finally win the auction, they have to pay
the buyer’s premium on top of their winning bid, plus logistics costs. All that can easily get
forgotten in the excitement of the auction. It is recommended that auction buyers decide
their highest bid, allowing for all costs and fees, in advance of the auction and do not go
any higher, no matter what.
5) Consider Quality and Grading: In most cases you cannot rely solely on the manifest to
determine the quality of the contents. Just because a product is on the manifest doesn’t
mean that the box is going to be in a good condition, or the product inside is going to be
brand new. Even with the manifest, it’s very hard to tell the condition of the product that
you have. Many liquidation businesses don’t guarantee quality and will just give you a
generalization of the products’ condition. When they do grade products, there’s a whole
range of classifications that you will see, such as:
 Visible box damage
 New, never opened
 Open and resealed.
 Scratch and dent.
Liquidation products might be classified in other ways, such as ecommerce returns and
retail returns. There’s a lot of different segments, terminology and acronyms that you could
see and should understand before buying. Even when liquidators do provide a grade, the
accuracy of the grading will vary very widely. If you haven’t used a company before, it is
recommended that you buy the smallest amount possible to test them out. If you can,
inspect the goods in person. Some liquidators have live auctions, so you can look at the
pallets yourself and bid on a specific one that you like.
6) Plan the Logistics: You have to make sure that you factor in the shipping costs when you
purchase a pallet. Shipping costs per pallet run anywhere between $100 and $300 based on
the weight, size and the location within the country. It’s not like shipping a parcel. If you
cannot get a good rate, a lot of liquidation companies can help you move the product. They
all have good relationships with trucking companies. Find out their rates beforehand and
factor it into the cost of the product.
7) Specialize: If you specialize in a specific category, the likelihood of getting a higher return
on investment will be a lot better. Every liquidation company has contracts with different
retailers. For example, one might have a contract with a major pharmacy like Rite Aid or
CVS, so they’ll get loads of products that you see within those stores. Or they might get
Best Buy liquidations, so you’ll see a lot of electronics. By building up your knowledge in

22
 a specific category, you’ll be able to make good decisions more quickly, build relationships
with liquidation companies, and improve your strategy on the marketplaces.
8) Watch Out for Expiration Dates: Clearance products can be in the supply chain for a
long time in warehouses, retail stores, returns centers, liquidators and so on. The likelihood
that they are close or even past their expiration date is much higher than a regular store-
bought product. You might be surprised by the variety of products that have expiration
dates. Food expiration dates are easy to spot, but products like ink toner, baby wipes,
diapers and make-up also have expiration dates. If you carry the inventory for too long,
time can run out on you and then you’re looking at a total loss. If you’re selling online,
they’ll be a lot of customer complaints if you sell a product past its expiration date.
9) Build up slowly: Make sure you don’t spend your full working capital that you have on
hand. Let’s say you have $10,000 in working capital. You should probably invest no more
than $500 in your first liquidation lot, and look at it as an educated gamble a calculated
risk. Do your best to account for all of the costs involved, purchase $500 of liquidation
product, receive it, work it, organize it, and see if you can make a profit. If you can, go
back to the same liquidator and buy a little bit more. Build it up in a nice slow style, where
your risks are all calculated. Don’t jump in quickly and invest all of your working capital
into liquidation stock, because you might get very disappointed and lose all of your funds.
It is also recommended that diversifying your sources. So you might buy 30% of your
inventory via liquidation, and work on finding the best sources, products and channels to
sell that stock. While you build that piece, look into other segments like online arbitrage,
retail arbitrage and standard wholesale. If you combine all those different segments then
you’ll have a very diversified purchasing platform.

3.4 Trends in the Liquidation Business

The world of liquidation is changing very rapidly. One thing we’re seeing is retailers jumping from
liquidator to try to get a higher recovery rate. As the big retailers squeeze liquidation companies to get a
better return, those companies will also try to get a better price from the small retailers and online sellers
who buy from them. Ecommerce is still a young industry, and online sales are growing in more and more
product categories. Ten years ago, far fewer people were purchasing clothing online than there are today.
You can’t try a shirt on before buying, so what happens if it doesn’t fit? You return it. Things like that are
going to change the nature of the liquidation business over the coming years. The amount of product
coming through is going to grow, and the quality of the product is going to change. We’re in a big
experimental phase right now. Best Buy opened up a website called CowBoom to sell a lot of their
clearance stock directly to consumers, although they have now backtracked and closed the site down. Other

23
retailers and e-tailers are also starting to resell returned products themselves. Some are trying to liquidate
returns via auction sites. The model is going to change constantly until they figure out the sweet spot.

It’s a multi-part problem that retailers have to look into, and try to maximize their recovery rate in every
segment possible. That might be through retail, liquidation companies, auction sites, warehouse auctions,
outlet stores or other channels. There will be a lot of trial and error until they really figure it out. Even when
they do, the game will change again as consumers’ purchasing habits evolve. It’s a moving target. 3 The
retail and ecommerce landscape has shifted rapidly over the last few years. Companies have competed
fiercely by streamlining their operations in the hopes of enhancing margins and providing the most
consumer friendly shopping experiences possible. Many of the largest and most sophisticated retail and
ecommerce companies are paying increased attention to the tremendous value they’ve left on the table in
their liquidation practices and turning to B-Stock. B-Stock helps the world’s leading manufacturers,
wholesalers, and retailers including nine of the top ten retailers in the US liquidate billions of dollars of bulk
inventory.4

3.5 US Retail Sales Forecast to Grow by 3.8% to 4.4%

Although Sears filed for bankruptcy in 2018, retail giant being bought out and the liquidation prevented.
National Retail Federation’s 2019 forecast predicts that the industry will indeed see growth. The figures,
which are estimated in part by using Commerce Department data from January through November 2018,
forecast growth of between 3.8% and 4.4% in 2019, which would see retail sales of between $3.82 trillion
and $3.84 trillion. These numbers exclude automobiles, gas stations and restaurants. The continued growth
is buoyed by an expected fall in the overall unemployment rate in the US, along with the expectation that
inflation and interest rates will remain low. Online sales are expected to grow by 10-12% this year, which
would represent a total between $751.1 billion and $764.8 billion, which is included in the overall forecast
figures. The level of expected growth is the same as the NRF’s prediction for 2018, but behind the actual
estimated growth rate of 4.6%. It’s believed that total retail sales reached $3.68 trillion by the end of last
year.5

3.6 Resale Market Trends

Dozens of digital startups are fueling ‘recommerce,’ the fastest-growing category in fashion retail, as
traditional merchants are looking at the potential of the pre-owned market. Second hand clothes and
accessories, from $1,000 designer handbags to $11 tank tops, are the fastest growing category in clothing
retail. Resale, an upscale subset of the second hand market is driving the growth. Resale is a more curated,
3
https://www.webretailer.com/b/sourcing-products-liquidation/
4
https://www.spectrumequity.com/news/b-stock-the-transformation-of-the-liquidation-industry
5
https://www.marketingcharts.com/industries/retail-and-e-commerce-107442

24
or merchandised, selection of goods, picked for their ability to retain value after being resold repeatedly.
Resale, previously limited to brick-and-mortar consignment stores, has exploded as online resellers have
taken the category to a new level. Digital marketplaces can post thousands of new items daily, and
consumers can find the clothes and buy them in seconds on their phones. Resale is growing so rapidly that
traditional retailers are eyeing it as a possible savior. The resale customer is no longer somebody else’s
customer, they are everybody’s customer.6
3.7 Secondhand Sales Expected to Double
The $29 billion secondhand apparel market will nearly double to $51 billion by 2023 according to the
ThredUp report, which uses research and data from retail analytics firm GlobalData. Resale currently
accounts for $7 billion of the secondhand clothing market, while traditional secondhand, thrift stores and
donations make up $21 billion, the report states. By 2023, resale is expected to make up close to half of the
secondhand market and grow to $23 billion. Secondhand sales are forecast to outpace fast fashion sales by
global giants like H&M, Uniqlo and Zara within the next decade, and reach $64 billion by 2028, or $20
billion more than the estimated fast fashion sales for that year of $44 billion, according to ThredUp. The
growing shift to online has prompted the grand dame of secondhand, 117-year-old Goodwill Industries
International Inc., to expand its online presence. This year, Goodwill stores in seven states began
a partnership with online marketplace OfferUp. The online resale field is becoming increasingly crowded,
with a growing number of sites vying for sales.
3.8 Traditional Retailers Trying Resale
Traditional retailers and brands are seeing new opportunities in secondhand sales. Neiman Marcus in April
2019 bought a minority stake in Fashionphile, which resells secondhand designer accessories. It plans to
begin letting its customers sell items to Fashionphile in select Neiman Marcus stores beginning this fall.
Luxury brand Mark Cross in July 2019 said it was launching a resale online shop where customers can trade
in or buy pre-owned Mark Cross products. The online resale sites could end up helping brick-and-mortar
resale stores by raising awareness of the resale market, Eileen Potrock, owner of  E Designer Resale in
Cliffside Park, New Jersey, told CO. “When The RealReal first started, the resale stores were a little bit
afraid of it,” Potrock said. But she said it hasn’t significantly affected the number of consigners or buyers
who visit her store, and her sales are trending upward this year. “More and more people are comfortable
with consignment now,” she said, and that’s good for her business. Resale still makes up only a small
portion of the average American’s closet. In 2018, about 6% of clothes were secondhand, according to the
ThredUp report. That is projected to grow to 13% within 10 years and reach one-third by 2033. While
resellers have been reporting dramatic growth, it’s important to remember that business is growing from a

6
https://www.uschamber.com/co/good-company/launch-pad/retailers-fuel-resale-trend

25
pretty small base, Alex Fitzgerald, manager in the consumer retail practice of A.T. Kearney, a global
strategy and management consulting firm, told CO.7

4. Competitor Analysis
4.1 Competitive Landscape

Liquidation industry is highly competitive in USA. Liquidation companies need to maintain a

stalwart reputation to remain competitive. Therefore, products will often undergo rigorous testing
to ensure that they work as well as brand new merchandise, which will not only help boost a
manufacturer’s reputation, but also reduce the number of annual returns. In fact, some liquidators,
who conduct the refurbishing of their merchandise in house, will offer an ironclad, 90-day, no
questions asked money back guarantee in order to ensure that buyers can buy in confidence. Both
big and small businesses will occasionally have trouble moving products via conventional e-
commerce websites or through retail stores. Markets can also be highly competitive, regardless of
the industry or product, and certain brands may opt to replenish via the liquidation of their present
inventory levels. Indeed, many marketers and manufacturers choose liquidation as their first choice
when they determine that their inventory must move as soon as possible.

In the United States alone, the liquidation market is worth nearly 150 billion dollars. Moreover,
many flea markets, auction sites, big-box retailers, and online retailers source their products from
liquidation companies. Interestingly, even within liquidators, many resellers will purchase products
from bigger liquidators and then refurbish, sort, or repair the merchandise in order to increase its
value. Then, they will try and reap large profits by re-selling the products to B2C sellers.

4.2 Liquidation Auctions in Columbus, OH

7
https://www.uschamber.com/co/good-company/launch-pad/retailers-fuel-resale-trend

26
Columbus is considered as hub of liquidation. In Columbus auction lots available via the largest network of
B2B liquidation marketplaces. Buyers can easily bid on bulk quantities directly from top Inventory From
Columbus, OH retailers, manufacturers, and trade-in companies. Conditions range from new to light use to
salvage. OH auctions available across B-Stock’s network of B2B marketplaces including Essendant
Liquidation Auctions, B-Stock Supply Liquidation Auctions, Lowe's Liquidation Auctions, Amazon EU
Liquidation Auctions (EU), QVC Liquidation Auctions, Unilever Liquidation Auctions, Target Auction
Liquidations, Walmart Liquidation Auctions, Woot Liquidation Auctions, HSN Liquidation
Auctions, Gildan Liquidation Auctions, Home Depot Liquidation Auctions, Hanesbrands
Closeouts, Contemporary Fashion Auctions, JCPenney Liquidation Auctions, Zulily Liquidation
Auctions, DICK'S Sporting Goods Liquidations, Meijer Liquidation Auctions, B-Stock Supply EU
Liquidation Auctions, Best Buy Liquidation Auctions, Sears Kmart Overstock Auctions, GE Appliances
Liquidation Auctions, Amazon Liquidation Auctions (US), Last Chance Discount Shoes &
Apparel, Signature Hardware Liquidation Auctions, Carrier Direct Auctions, Clover Wireless
Auctions, Wayfair Liquidation Auctions, Hudson's Bay Liquidation Auctions, GameStop
Wholesale, Wireless Network Marketplace, Lowe's Canada Liquidation, Select Mobile Auctions, Wayfair
EU Liquidation Auctions, Groupon Goods Liquidation Auctions, Superior Wireless Auctions, Sam's B2B
Wholesale Auctions, European Automotive Auctions, RB Health Liquidation Auctions, Early Upgrade
Auctions and Almo Liquidation Auctions.

4.3 Barriers to Entry

Barriers to Entry in Liquidation market is moderate. Any person having adequate financial resources and
understanding of liquidation industry can enter in the market subject to necessary registrations and falling
state licensing requirements. Moreover, liquidation market is both labor and capita intensive at some extent.

4.4 Major Direct Competitors

There are a large number of competitors in the market. Some of the examples of our direct competitors are
presented below:
 Bargain Galore- 2845 Brice Rd, Reynoldsburg, OH 43068, United States
 Home Buys-4395 Clime Rd, Columbus, OH 43228
 Bargain Hunt-3574 Soldano Boulevard, Columbus, OH 43228
 Awesome Dealz - 3150 S Hamilton Rd, Columbus, OH 43232, United States
 Golden Dealz- 785 Frebis Avenue, Columbus, Ohio
 Bargain Best-3528 W. Dublin Granville Rd, Columbus, OH 43235
 Better Buy Liquidation Center-Northland Plaza Shopping Center, Columbus, OH 43231
 Big Lots-6300 E. Livingston Avenue, Reynoldsburg, OH 43068
4.5 Competitive Edges

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The Liquidation Deals is with following distinctive competitive edges over its competitors:
 Competitive pricing.
 New Inventory weekly bases.
 Name brand merchandise.
 Large base of new and repeat customers.
 Overstock, Refurbished , and Returned products
 Technical Expertise and Yearly trainings.
 One-stop facility.
 25-75% off MSRP
 Beautiful store; great location.
 Liquidation sale on weekends.
 Smartphone and Electronics repair services

5.0 Sales Strategy

As with any business, marketing is essential for the success of Liquidation Retail business. Marketing does
not just happen at the startup phase, but it is a continuous
process even for the most successful businesses. Liquidation
Dealz business is not different from other businesses in a
sense it requires commitment of best quality products and
services over the long haul with continuous marketing and
promotional campaign for attracting new customers and
retaining the existing one.

5.1 Marketing Initiatives

Liquidation Dealz will combine a set of international and latest advertising technologies to effectively
market its business. The aim of the marketing strategy is to generate highest level of revenue using lowest
financial resources. One of the key responsibilities of marketing team will be lead generation for selling the
products. The methods will be used for lead generation include targeted sales and customer referrals.
Liquidation Dealz set a local and latest advertising technologies to effectively market its business. The aim
of the company marketing is to generate the highest level of awareness to the local community for saving
the money through purchasing from Liquidation Dealz platform. The basic marketing activities that will be
done to sell the products and increase the sale are listed below.

28
  25-75% Off Retail Price: Liquidation Dealz will offer 25-75% discount on retail price. Most of
the products will be 50% off. Offering such a big discount will be a big marketing punch for
attracting the customers.
 Special Promotion: Liquidation Dealz will offer special promotion on different items and will
advertise it on the retail store, website, and on social media.
 Liquidation Dealz will by the Right Pallet: In liquidation retail business buying right pallet is
very important for boosting the sale. We will buy right pallet of quality products.
 Product Bundles: We will create products bundles on slow selling items. This is a great way to sell
products with less demand by bunching them with a high demand product. high demand inventory
items will help to boost the sales of those other products. We will ensure that our produce bundles
would have great sense i.e. products will be related to one another and work well together.
 Motivated Sales Staff: We will engage very trained and motivated staff. We will give special
incentives to employees on achieving sales target. It will eencourage staff members to act quickly
and work with responsibility.
 Inspection of Goods before Selling: We will do adequate inspection of goods before selling, so
that if there is any fault in the product it could be separated and not to sold any customer. This
strategy will increase the customer base and their trust on Liquidation Dealz.
 Trained Marketing Team: We will engage highly trained and specialized market sales and
marketing team. We will also intend to work closely with marketing professionals to ensure that it
is on the cutting edge of advertising technology.
 Trade Shows: We will fully participate in the Trade Shows pertaining to retail sale items.
 Timely Customer Support: Effective and timely Customer Support is one of the best marketing
tolls. The management team will go a long way toward providing a timely professional response to
calls, emails, and online queries and other orders.
 Maximum Output from Minimum Resources: Liquidation Dealz is with potential opportunities
to expand which can be tapped with the right team of marketing personnel. Risk is only with
resources. Our strategy is to have maximum output from highly paid minimum resources.
5.2 Pricing Strategy

Liquidation Dealz pricing strategy is 50% off normal retail price of products at Walmart. We will keep
in mind the competition prices but with much better quality of products.

5.3 Internet Marketing Strategy

Since studies have proved that the most effective marketing channels to market retail store business is
internet. It is important to highlight that the majority of the most effective marketing channels are internet-
based. We will make full use of available internet marketing channels. “Online” or “Internet” marketing is

29
comparatively cost-effective than the traditional “Local and Print Media” marketing campaigns. The
following is a complete breakdown of the company internet marketing strategy.
 Website Development: Liquidation Dealz website is at development stage and will be fully
functional very soon. The website will be updated regularly and will be full with information
regarding products. We will set up sale pages on website.
 Listing in Online Directories and Magazines: The efforts will be made to list the name of
website in all local and international online directories related to retail sale. Online directories and
magazines playing a critical role of Internet marketing.
 Search Engine Optimization (SEO): Liquidation Dealz will look into hiring a part time SEO
specialist to work on improving the visibility of the website on all major search engines such as:
Google, Bing, Ask, Yahoo, etc.
 Paid Advertisement (Google AdSense, Facebook, etc.): Organic SEO takes longer time to show
results. It could take from 3 months to as long as 1 year or 2 to be more fruitful. Therefore, along
with traditional search engine techniques, the company may consider paid advertisements to gain a
quick customer base. Initially, this will mean paid advertisements with Google and Facebook to
display company website ads on all major search results and Facebook pages. The paid advertising
campaign will last as the traditional SEO start showing some results.
 Social Media Marketing: Social Media has proven itself as the most cost-effective and efficient
medium to communicate with the
potential clients. Liquidation Dealz
Website
hopes to make full use of all popular Developm
ent
Social Media channels such as RSS and
SEO
Newsletters
Facebook, Twitter, YouTube, and
Google+, etc. Advertisement will also be
placed on the Social Media sites to
Blog Paid Ads
entice more and more customers. Internet
 YouTube Commercials: Another Marketing
important channel to market the website
Professiona Social
effectively to a selected range of target
l Media
audience is through YouTube Networking
commercials. The company may place Listing in
Youtube Online
promo videos on YouTube. This will be Commerci Directori
als es
a cost-effective and customer focused
marketing strategy.

30
  Professional Networking: Liquidation Dealz would build a professional network of industry
experts mainly through online efforts such as LinkedIn etc.
 Blog: A dedicated blog to educate website visitors about the important information and latest
happening in the liquidation industry in the area will be useful.
 RSS and Newsletters: Really Simple Syndication (RSS) and Newsletters will be the main features
of the website. This strategy will keep the customers glued to the website.

5.4 Print and Electronic Media Marketing

The most effective marketing channels are taken into consideration while preparing the local and print
media marketing strategies. The company intends to work closely with marketing professionals to ensure
that it is on the cutting edge of advertising technology. It is important to highlight that the majority of the
most effective marketing channels are internet-based. Given this fact, marketing cost of advertising
company will be relatively low compared to the companies leveraging more traditional local and print
media campaigns. However, we will not ignore local and print media marketing at all. If social media
marketing will not show the desire results, print & electronic media marketing may be considered. The
following is a complete breakdown of local and print media marketing strategy.

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 o Fliers and brochures: Liquidation Dealz may use fliers and brochures to create the awareness in
the general public. Color fliers with full information regarding product description, percentage of
discount prices will be distributed to the customers.
o Newspapers and Magazines
Campaign: Liquidation retail sale Newspaper
s/
is not a time to cut back on Magazines

advertising expenses. A full-page

color advertisement in local
newspapers will grab people's Local and
Print
attention and draw a significant TV Adds
Media
Posters
amount of foot traffic to the store. Marketing

Company plans to place some

small ads in the selective
newspapers and magazines. We
believe print media campaign also Fliers
has the potential to deliver the
essence of the company plans
benefits to the target customers.
o Posters: Posters may be placed at the businesses hubs and commercial plazas the printed broachers
and leaf let will be distributed within the target markets.
o TV Ads: Liquidation Dealz may give ads on selected local TV channels and cable network.

5.5 Mobile Marketing

Liquidation Dealz may also consider Mobile as part of its marketing campaign. The company may use the
following Mobile Marketing tools:
 SMS Marketing- SMS marketing is one of the most popular forms of mobile marketing. It has
been noticed that marketing done through SMS have fetched more positive and immediate response
as compared to TV ads or advertisement through print medium. This is because the customers get a
clear idea of the product or service directly from the organization to their handset. Liquidation
Dealz may uses SMS marketing within the city of Columbus.
 SMS coupons marketing- Mobile Coupons is the latest technology which has been popular from
last few years to send location based, discount and offer based text messaging to the potential
customers. Text messaging based mobile coupons has shown great result in instant improve in
sales. The website may also consider using SMS coupons marketing.
5.6 Marketing Budget

32
Liquidation Dealz has planned to set a side adequate budget for marketing and advertising campaign. The
company need about USD 68,600 for setting up the business out of that 8.75% will be used on marketing
campaign. In year 1, $8000 will be used for marketing i.e. $600 will be used from start-up and $2000 from
revenue. In retail business marketing is very critical for expanding the business and attracting the
customers. The company will US $6000 on marketing campaign throughout the next five-year projected
period starting from year 2.
Marketing Budget Startup
Year 1 Year 2 Year 3 Year 4 Year 5
(USD) Funding
68,600 $150,000 $241,500 $320,820 $351,702 $392,610
Revenue
Marketing Expenses
8.75% 1.33% 2.48% 1.87% 1.71% 1.53%
(%)
Total Marketing $6,000 $2,000 $6,000 $6,000 $6,000 $6,000
Budget

33
6. SWOT Analysis

Liquidation retail business promises significant growth opportunities if quality products are provided at
affordable prices. The above market research and analysis reveals that there is tremendous growth potential
in the market for liquidation retail business. The market analysis indicates that Liquidation Dealz business
is very secure and profitable investment. To determine a strategic planning that would best benefit to the
Liquidation Dealz, a SWOT Analysis has been done to have an in-depth study on the various aspects of the
business. More importantly, this analysis will serve as the groundwork to back up and steer the marketing
efforts valuable to the business.
INTERNAL
Strengths Weaknesses
 Liquidation Dealz is going to setup its retail store in  New Liquidation retail store will take
Columbus which is hub of the liquidation market and time to survive and penetrate in the
there is tremendous demand of liquidation products. market.
 The owner and founder of the company is very skilled  Heavy marketing and advertising
and has extensive understanding of liquidation industry. expenditures and efforts are required in
 Liquidation Deals will offer between 25-75% off retail the beginning.
price. Most products are 50% off.  Liquidation retail is a capital and lab our
 Liquidation Deals will provide quality products at more intensive business, so heavy investment
than 50% discounted price. is required for setting up the business.
 Liquidation Deals going to sell through four different
sources i.e. Sale on Retail Store, Website Sale, Action
(Mobile App), Third party selling.
EXTERNAL
Opportunities Threats
 Columbus is the state capital and the most populous  Market is already tending towards
city in the U.S. state of Ohio. There are great intense competition and on the other
opportunities for liquidation retail business. side new entrance is always welcome.
 It is believed that the right amount of profit to make on The existing big companies may also
liquidated product is 30% to 60%. similar business model at much lower
 A lot of buyers in the marketplace don’t want to touch prices. If this situation prevails it may
the product unless they can make a 100% to 300% profit lead to the stiffer competition.
on it.  The number of Liquidation retail
 The world of liquidation is changing very rapidly and selling companies are increasing with
creating more and more opportunities. fast pace in Columbus. This increasing
 US Retail Sales Forecast to Grow by 3.8% to 4.4% in trend may decrease the market share
2019 which would see retail sales of between $3.82 of Liquidation Dealz.
trillion and $3.84 trillion, steady growth creating
tremendous business opportunities.
 Online sales are expected to grow by 10-12% this year,
which indicate there is also great opportunity of online
selling.

34
 The $29 billion secondhand apparel market will nearly
double to $51 billion by 2023
 By 2023, resale is expected to make up close to half of
the secondhand market and grow to $23 billion
 Traditional retailers and brands are seeing new
opportunities in secondhand and liquidation retail sale.

35
7.0 Financial Plan

All information presented up to this point was mainly focused on the company
description, target market, market potential, marketing strategies, and the
management team. In this and subsequent sections, the business plan presents
the results of the company’s financial analysis and projections. Financial
analysis of the Liquidatio Dealz has been done after analyzing the market
analysis, market trends, overall liquidation inventory business scenario,
competitive analysis and marketing strategies.

7.1 Financial Assumptions

The preparation of the financial statements in conformity with US GAAP requires management to make
estimates and assumptions that affect the reported amounts of revenue and expenses and disclosure of contingent
revenue and expenses at the date of the financial statements during the reporting periods. Estimates may include
those pertaining to accruals and going concern assumptions. Actual results could materially differ from those
estimates. Following table presents financial assumption over the next five years projected period:

The table below presents the major assumptions made in the course of this business plan that are important to
highlight. According to tradeeconomics.com annual inflation rate in the US increased to 1.4% in December of
2020, from 1.2 percent in November and slightly higher than market forecasts of 1.3%. In the course of this
business plan we have assumed 1.4% inflation rate. As per the Bank of America Home loan and mortgage rate
vary 2% to 2.65%8. In this business plan 2.65% internet rate has been assumed for calculating the return on
investment. The average business loan interest rate for a small business loan in 2020 ranges from as low as 2%
or 3% to as high as 100% or more. With so many different types of business loans available for borrowers across
a broad credit spectrum, the answer isn’t entirely clear.

Loan type Annual interest rate (AIR)

Traditional bank loan 2% to 13%

SBA loan 7.75% to 10.25%

Online loan 7% to 100%

Merchant cash advance 20% to 250%

Invoice financing 13% to 60%

8
https://www.bankofamerica.com/mortgage/

36
Description FY 1 FY 2 FY 3 FY 4 FY 5
Retail Sale Projection          
Retail Sale transaction per month 100 105 113 125 140
Annual Growth   5% 8% 10% 12%
Annual Transactions 1,200 1,260 1,361 1,497 1,677
Average per transaction value $100 $100 $100 $100 $100
$120,00 $126,00 $136,08 $149,68 $167,65
Annual Gross Retail Sale
0 0 0 8 1
Online Sale Projections          
Online Sale transaction per month 50 53 57 62 70
Annual Growth   5% 8% 10% 12%
Annual Transactions 600 630 680 748 838
Average per transaction value $50 $50 $50 $50 $50
Annual Gross Online Sale $30,000 $31,500 $34,020 $37,422 $41,913
Auction App Sale          
Action App transaction per month   70 76 83 93
Annual Growth     8% 10% 12%
Annual Transactions   840 907 998 1,118
Average per transaction value   $100 $100 $100 $100
$111,76
Annual Gross Auction App Sale   $84,000 $90,720 $99,792
7
Other Sale (Pallet Sales,
Truckload Broker, Exporter)          
Transaction per month     50 54 59
Annual Growth       8% 10%
Annual Transactions     600 648 713
Average per transaction value     $100 $100 $100
Annual Gross Sale     $60,000 $64,800 $71,280
Item-wise Sale          
Electronics Items 33.33% 33.33% 33.33% 33.33% 33.33%
Appliances 16.67% 16.67% 16.67% 16.67% 16.67%
Home Goods 33.33% 33.33% 33.33% 33.33% 33.33%
Toys 16.67% 16.67% 16.67% 16.67% 16.67%
Opening Timings          
Opening days in a week (Friday,
4 days 4 days 4 days 4 days 4 days
Saturday, Sunday, and Monday)
Opening Hours in a day 8 hours 8 hours 8 hours 8 hours 8 hours
Expenses          
Inventory Cost (% of gross sale) 50.00% 50.00% 50.00% 50.00% 50.00%
Gross Profit Margin 50.00% 50.00% 50.00% 50.00% 50.00%
Operational Expenses (% of gross
17.69% 25.57% 19.24% 17.55% 15.73%
revenue)
Sale Tax 7.50% 7.50% 7.50% 7.50% 7.50%
Net Profit Margin 23.01% 16.01% 22.72% 24.61% 26.62%
HR Expenses          
Sale Associate 1 (full time)          

37
 Monthly Hours 128 128 128 128 128
Hourly Rate $10 $10 $10 $10 $10
Annual Wage $15,360 $15,360 $15,360 $15,360 $15,360
Sale Associate 1 (part time)          
Monthly Hours 64 64 64 64 64
Hourly Rate $10 $10 $10 $10 $10
Annual Wage $7,680 $7,680 $7,680 $7,680 $7,680
Economic Assumptions          
Interest Rate 3.00% 3.00% 3.00% 3.00% 3.00%
Business Loan 7.00% 7.00% 7.00% 7.00% 7.00%
Inflation Rate 1.40% 1.40% 1.40% 1.40% 1.40%

7.2 Revenue Projections

7.2.1 Monthly Revenue Projection First Year
Liquidation Dealz will generate revenue from major two sources i.e. Retail Sale and Online Sale. We
are hoping to get $12,500 revenue per month to start. It is projected that during year 1, $150,000
revenue will be generated i.e. $120,000 from retail sale and $30,000 from online sale. The monthly
revenue breakup of year 1 is depicted in the following Table and graph.
Revenue Sources
Description Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total
Retail Sale $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $120,000
Online Sale $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $30,000
Total Gross Revenue $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $150,000

38
7.2.2 Five Year Revenue Projections
Liquidation Dealz will generate $150,000 revenue during year 1. In year 2, company will also start Action
Selling. It is projected that during Year 2, $241,500 revenue will be generated. Up to year 5, it is projected that
$392,610 revenue will be generated. Following table and graph outline five-year revenue projects.

5 Years Revenue Projections Summary

Description FY 1 FY 2 FY 3 FY 4 FY 5
$126,00 $149,68
Retail Sale $120,000 $136,080 $167,651
0 8
Online Sale $30,000 $31,500 $34,020 $37,422 $41,913
Auction App Sale   $84,000 $90,720 $99,792 $111,767
Other Sale (Pallet Sales, Truckload
    $60,000 $64,800 $71,280
Broker, Exporter)
$241,50 $351,70
Total Gross Revenue $150,000 $320,820 $392,610
0 2

7.2.3 Revenue Projections by Products

39
Liquidation Dealz will sell four type of items i.e. Electronic Items, Appliances, Home Goods, and Toys. Year
wise revenue projections by product is presented below:

5 Years Revenue Projections Summary by Products

Description FY 1 FY 2 FY 3 FY 4 FY 5
Electronics Items $50,000 $80,500 $106,940 $117,234 $130,870
Appliances $25,000 $40,250 $53,470 $58,617 $65,435
Home Goods $50,000 $80,500 $106,940 $117,234 $130,870
Toys $25,000 $40,250 $53,470 $58,617 $65,435
Total Gross Revenue $149,999 $241,500 $320,820 $351,702 $392,610

7.3 Five Years Profit & Loss Projections

In computing for the profit and loss, certain assumptions have been taken in the first part of this section.
The gross margin in the total sales projections is assumed 50% i.e. inventory cost (direct cost) is
projected 50%. Employment expense are projected $23,040 per year. Marketing expenses are assumed
$6,000 per year, rent of building is projected $21,600, utilities expenses $6,000, maintenance expenses
$1200, professional services of accountant $2400 and other unforeseen expense are projected $1,500.

The total gross profit of the Liquidation Deals will increase progressively on year and year basis
throughout the next five years as well as gross revenue will increase. The chart below highlights

40
bottom line profits, or percentage of profit on gross income. During 2nd Year, company gross revenue
will increase to $241,500 and net profit $38,665. Up to year 5, company gross revenue will cross
$392,600 and net profit $104,500.

Market analysis, competitive analysis and business model of the company reveals that Liquidation
Deals is with solid business model and we believe target market have enough potential to achieve the
company objectives and targets. As presented in the above graph, revenue and net profit of the
company will increase every year. Up to fifth year of expanding the operation, company will be able to
secure more than $392,000 revenue and $104,000 net profit.

It is pertinent to mention that the expenses of Rent, Utilities Expenses, Maintenance Expenses and
Accounting Services of year 1 will be covered from startup loan/investment. However, from year 2,
these expenses will be paid from revenue.

41
The complete 5 years profit and loss projections are resented in the following table and graph. Monthly
Profit and Loss projection are at Annex Table 8.1 and Quarterly Profit and Loss Projections are at
Annex Table 8.2 & 8.3 respectively.

Profit & Loss Projections FY-1 FY-2 FY-3 FY-4 FY-5

Retail Sale $120,000 $126,000 $136,080 $149,688 $167,651
Online Sale $30,000 $31,500 $34,020 $37,422 $41,913
Auction App Sale $0 $84,000 $90,720 $99,792 $111,767
Other Sale $0 $0 $60,000 $64,800 $71,280
Gross Revenue $150,000 $241,500 $320,820 $351,702 $392,610

Direct Cost (50%) $75,000 $120,750 $160,410 $175,851 $196,305

Operating Income $75,000 $120,750 $160,410 $175,851 $196,305
Gross Margin (%) 50.00% 50.00% 50.00% 50.00% 50.00%
Operational Expenses        
Employment Expenses $23,040 $23,040 $23,040 $23,040 $23,040
Marketing & Promotional Expenses $2,000 $6,000 $6,000 $6,000 $6,000
Rent $0 $21,600 $21,600 $21,600 $21,600
Utilities Expenses $0 $6,000 $6,000 $6,000 $6,000
Maintenance Expenses $0 $1,200 $1,200 $1,200 $1,200
Accounting & Bookkeeping $0 $2,400 $2,400 $2,400 $2,400
Other Expenses $1,500 $1,500 $1,500 $1,500 $1,500
Total Operating Cost $26,540 $61,740 $61,740 $61,740 $61,740
EBITDA $48,460 $59,010 $98,670 $114,111 $134,565
EBIT Margin (%) 32.31% 24.43% 30.76% 32.45% 34.27%
Interest Expenses $2,702 $2,232 $1,729 $1,191 $616
Sales Tax (7.5%) $11,250 $18,113 $24,062 $26,378 $29,446
Net Profit/Loss $34,508 $38,665 $72,879 $86,542 $104,503

Net Profit Margin 23.01% 16.01% 22.72% 24.61% 26.62%

42
7.4 Projected Cash Flows

Liquidation Deals retail business will have sufficient cash coming from sales to meet its operational
requirements. It is remarkable that company will generate sufficient cash every year to meet its
operational expenses and would have good margin of net profit. Five-year projected cash flows of the
company are depicted in the below table and graph:

Pro Forma Cash Flow FY-1 FY-2 FY-3 FY-4 FY-5

Cash from operations $150,000 $241,500 $320,820 $351,702 $392,610
Cash from receivables $0 $0 $0 $0 $0
Operating Cash Flows $150,000 $241,500 $320,820 $351,702 $392,610
Other Cash Inflows          
Equity Investment (Owner) $30,000 $0 $0 $0 $0
Debt Financing (Loan) $38,600 $0 $0 $0  
Sales of Business Assets $0 $0 $0 $0 $0
A/P Increases $0 $0 $0 $0 $0
Total Other Cash Inflows $68,600 $0 $0 $0 $0
Total Cash Inflows $218,600 $241,500 $320,820 $351,702 $392,610
Cash Outflows          
Startup Cost $68,600        
Direct Cost (50%) $75,000 $120,750 $160,410 $175,851 $196,305
Total Operating Cost $26,540 $61,740 $61,740 $61,740 $61,740
Payment of Interest and Taxes $13,952 $20,345 $25,791 $27,569 $30,062
Total Cash Outflows $184,092 $202,835 $247,941 $265,160 $288,107
Net Cash Balance $34,508 $38,665 $72,879 $86,542 $104,503
Consolidated Cash Balance $34,508 $73,173 $146,052 $232,594 $337,098

43
7.5 Break-Even Analysis

Break even sales is the dollar amount of revenue at which a business earns a profit of zero. This sales
amount exactly covers the underlying fixed expenses of a business, plus all of the variable expenses
associated with the sales. It is useful to know the breakeven sales level, so that management has a
baseline for the minimum amount of sales that must be generated in each reporting period to avoid
incurring losses. To calculate break even sales, fixes expenses are divided with contribution margin
percentage i.e. Fixed expenses ÷ Contribution margin percentage = Break even sales.

In year 1, breakeven sale will be around $53,080 i.e. minimum revenue required to meet fixed cost of the
company. Breakeven sale is 35% of gross revenue/ expected sale. As well as company will grow breakeven sale
as percentage to gross revenue will decrease.

Breakeven Sale Year 1 Year 2 Year 3 Year 4 Year 5

Expected Sale $150,000 $241,500 $320,820 $351,702 $392,610
Yearly Beak even Sale $53,080 $123,480 $123,480 $123,480 $123,480
Monthly Breakeven Sale $4,423 $10,290 $10,290 $10,290 $10,290
Breakeven (Percentage or
35% 51% 38% 35% 31%
Gross Revenue)

44
The above table and graph indicate that Liquidation Deals has to generate at least around $53,080 sales to cover
the fixed cost. With respect to expected sale it is 35% in year 1, 51% in year 2, 38% in year 3, 35% in year 4 and
31% in year 5.

7.6 Scenario Analysis

Up to this point in the business plan, we have looked into the profitability of the enterprise by considering the
market trends and assumptions. Profitability would be different, of course, if market trends or assumptions
change. Therefore, it is important when assessing the risk of such
investment to understand the fluctuation or volatility of these financial
results with changing circumstances, scenarios, and assumptions. Moreover,
every business is with risks and opportunities depending on the external
factors and ever changing market scenario and demands. Liquidation Deals
have planned and projected all the things considering average scenario
(expected scenario). In case of expected scenario, company will be able to
earn revenue and net profit as we projected in the previous sections of this plan.

If the factors will move towards in the favors of the company, revenue may increase and company attract more
than expected customers. In case of best scenario, we have projected 50% more revenue and company will be
able to secure more than $487,500 in first financial year and more than $2.77 million revenue up to fifth
financial year. But if the factors move against the company, there are chances of losses. In case of worst
scenario, we have assumed 50% less revenue i.e. company may hardly able to generate revenue $162,500 in year
1 and $925,000 till year 5. It is pertinent to mention that this scenario analysis is only for the Columbus based
retail store. In case company will expand its business and established new stores or tap new online selling
channels, business scenario will be completely different. The table and chart below depict how sale will increase
or decrease over time if market scenario changes.

Description FY-1 FY-2 FY-3 FY-4 FY-5

$225,00 $362,25 $481,23 $527,55 $588,91
Best Scenario (+50%) 0 0 0 3 5
$150,00 $241,50 $320,82 $351,70 $392,61
Expected Scenario 0 0 0 2 0
Worst Scenario (- $75,000 $120,75 $160,41 $175,85 $196,30

45
 50%) 0 0 1 5

7.7 Investment Analysis

As presented above in the business plan, it is obvious that the Tactica new plan is very attractive and profitable.
We will be able to generate adequate real cash flow after paying the expenses. Net Present Value (NPV) is the
difference between the present value of cash inflows and the present value of cash outflows.  NPV is used in
capital budgeting to analyze the profitability of a projected investment or project. At 8% interest rate NPV value
in 5 years is $729437. Internal Rate of Return (IRR) on investment in five years is 39.13% which shows project
is attractive and profitable. IRR is a discount rate that makes the net present value (NPV) of all cash flows from a
particular project equal to zero. The project payback period is 1.3 year. Payback period in capital budgeting
refers to the period of time required to recoup the funds invested, or to reach the break-even point. The ROI has
been calculated in the above table.
Investment Analysis For 5 years
Revenue Cash Flow
Operating Taxes & Cumulative Cash
Years Investment Direct Cost Operating Cost Real Cash Flow
Income Interest Flow (Real)
- $68,600 ($68,600) ($68,600)
1 $150,000 $75,000 $26,540 $13,952 $34,508 ($34,092)

2 $241,500 $120,750 $61,740 $20,345 $38,665 $4,573

3 $320,820 $160,410 $61,740 $25,791 $72,879 $77,452

4 $351,702 $175,851 $61,740 $27,569 $86,542 $163,994

5 $392,610 $196,305 $61,740 $30,062 $104,503 $268,498

Total $337,098 $268,498

Net Present Value (NPV) $184,528

Internal Rate of Return (IRR) on Invesmtmnet 68%
Pay Back Period of the Project 0.12 year(s)

46
7.8 Loan Amortization Schedule

The funds from Bank are required in order of $68,600 that will be amortized in the following five years. During
first year we will not pay except interest. The loan repayment will be started from year 2. The loan will be
amortized with amount $94,414 (including interest) each year as per the following schedule
Loan Payment Schedule

Year Principal Annual Payment Interest Payment Debt Repayment Closing Balance

Year 1 $38,600 $9,414 $2,702 $6,712 $31,888

Year 2 $31,888 $9,414 $2,232 $7,182 $24,706

Year 3 $24,706 $9,414 $1,729 $7,685 $17,021

Year 4 $17,021 $9,414 $1,191 $8,223 $8,798

Year 5 $8,798 $9,414 $616 $8,798 $0

Total $47,071 $8,471 $38,600

47
8. Appendix
The following information is presented in this plan to illustrate financial details, projections, general assumptions, and
expected results. As in any business plan, success is solely dependent on the business execution and the circumstances
that surround its operations. The objective of these projections is therefore to aid the entrepreneur on understanding the
business model, along with the feasibility of such business development in current market conditions and with the
underlying assumptions considered only as part of this study.
8.1 Monthly Profit and Loss Projections
Description Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Totao Year 1
Retail Sale $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $120,000
Online Sale $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $30,000
Auction App Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Gross Revenue $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $150,000

Direct Cost (50%) $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $75,000

Operating Income $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $75,000
Gross Margin (%) 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50%
Operatioanl Expenses
Employment Expenses $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $23,040
Marketing & Promotional Expenses
$167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $2,000
Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Maintenance Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Accoutning & Bookkeeping $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Expenses $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $1,500
Total Operating Cost $2,212 $2,212 $2,212 $2,212 $2,212 $2,212 $2,212 $2,212 $2,212 $2,212 $2,212 $2,212 $26,540
EBITDA $4,038 $4,038 $4,038 $4,038 $4,038 $4,038 $4,038 $4,038 $4,038 $4,038 $4,038 $4,038 $48,460
EBIT Margin (%) 32.31% 32.31% 32.31% 32.31% 32.31% 32.31% 32.31% 32.31% 32.31% 32.31% 32.31% 32.31% 32.31%
Interest Expenses $225 $225 $225 $225 $225 $225 $225 $225 $225 $225 $225 $225 $2,702
Sales Tax (7.5%) $938 $938 $938 $938 $938 $938 $938 $938 $938 $938 $938 $938 $11,250
N et Profit/ Loss $2,876 $2,876 $2,876 $2,876 $2,876 $2,876 $2,876 $2,876 $2,876 $2,876 $2,876 $2,876 $34,508
N et Profit Margin 23.01% 23.01% 23.01% 23.01% 23.01% 23.01% 23.01% 23.01% 23.01% 23.01% 23.01% 23.01% 23.01%

48
 8.2 Quarterly Profit and Loss Projection Year 2 & 3
Description Q1 Q2 Q3 Q4 Year 2 Q1 Q2 Q3 Q4 Year 3
Retail Sale $31,500 $31,500 $31,500 $31,500 $126,000 $34,020 $34,020 $34,020 $34,020 $136,080
Online Sale $7,875 $7,875 $7,875 $7,875 $31,500 $8,505 $8,505 $8,505 $8,505 $34,020 8
Auction App Sale $21,000 $21,000 $21,000 $21,000 $84,000 $22,680 $22,680 $22,680 $22,680 $90,720
Description
Other Sale
Q1
$0
Q2
$0
Q3
$0
Q4
$0
Year 4
$0
Q1
$15,000
Q2
$15,000
Q3
$15,000
Q4
$15,000
Year 5
$60,000
.
Retail Sale $37,422 $37,422 $37,422 $37,422 $149,688 $41,913 $41,913 $41,913 $41,913 $167,651
Gross Revenue
Online Sale
60,375
$9,356
60,375
$9,356
60,375
$9,356
60,375
$9,356
$241,500
$37,422
$80,205
$10,478
$80,205
$10,478
$80,205
$10,478
$80,205
$10,478
$320,820
$41,913 3
Direct Cost (50%) $30,188 $30,188 $30,188 $30,188 $120,750 $40,103 $40,103 $40,103 $40,103 $160,410
Auction App Sale $24,948 $24,948 $24,948 $24,948 $99,792 $27,942 $27,942 $27,942 $27,942 $111,767
Operating
Other SaleIncome $30,188
$16,200 $30,188
$16,200 $30,188
$16,200 $30,188
$16,200 $120,750
$64,800 $40,103
$17,820 $40,103
$17,820 $40,103
$17,820 $40,103
$17,820 $160,410
$71,280
Gross Margin
Gross Revenue(%) 50%
$87,926 50%
$87,926 50%
$87,926 50%
$87,926 50%
$351,702 50%
$98,153 50%
$98,153 50%
$98,153 50%
$98,153 50%
$392,610
Operatioanl Expenses
Direct Cost (50%) $43,963 $43,963 $43,963 $43,963 $175,851 $49,076 $49,076 $49,076 $49,076 $196,305
Employment Expenses $5,760 $5,760 $5,760 $5,760 $23,040 $5,760 $5,760 $5,760 $5,760 $23,040
Operating Income
Marketing & Promotional Expenses$43,963
$1,500 $43,963
$1,500 $43,963
$1,500 $43,963
$1,500 $175,851
$6,000 $49,076
$1,500 $49,076
$1,500 $49,076
$1,500 $49,076
$1,500 $196,305
$6,000
Gross Margin (%)
Rent 50%
$0 50%
$0 50%
$0 50%
$0 50%
$0 50%
$5,400 50%
$5,400 50%
$5,400 50%
$5,400 50%
$21,600
Operatioanl
Utilities Expenses
Expenses $1,500 $1,500 $1,500 $1,500 $6,000 $1,500 $1,500 $1,500 $1,500 $6,000
Employment
Maintenance Expenses
Expenses $5,760
$300 $5,760
$300 $5,760
$300 $5,760
$300 $23,040
$1,200 $5,760
$300 $5,760
$300 $5,760
$300 $5,760
$300 $23,040
$1,200
Marketing &&Bookkeeping
Accoutning Promotional Expenses
$1,500
$600 $1,500
$600 $1,500
$600 $1,500
$600 $6,000
$2,400 $1,500
$600 $1,500
$600 $1,500
$600 $1,500
$600 $6,000
$2,400
RentExpenses
Other $5,400
$375 $5,400
$375 $5,400
$375 $5,400
$375 $21,600
$1,500 $5,400
$375 $5,400
$375 $5,400
$375 $5,400
$375 $21,600
$1,500
Utilities
Total Expenses
Operating Cost $1,500
$10,035 $1,500
$10,035 $1,500
$10,035 $1,500
$10,035 $6,000
$40,140 $1,500
$15,435 $1,500
$15,435 $1,500
$15,435 $1,500
$15,435 $6,000
$61,740
Maintenance Expenses $300 $300 $300 $300 $1,200 $300 $300 $300 $300 $1,200
EBITDA $20,153 $20,153 $20,153 $20,153 $80,610 $24,668 $24,668 $24,668 $24,668 $98,670
Accoutning & Bookkeeping $600 $600 $600 $600 $2,400 $600 $600 $600 $600 $2,400
EBIT Margin
Other (%)
Expenses 33.38%
$375 33.38%
$375 33.38%
$375 33.38%
$375 33.38%
$1,500 30.76%
$375 30.76%
$375 30.76%
$375 30.76%
$375 30.76%
$1,500
Interest
Total Expenses
Operating Cost $558
$15,435 $558
$15,435 $558
$15,435 $558
$15,435 $2,232
$61,740 $432
$15,435 $432
$15,435 $432
$15,435 $432
$15,435 $1,729
$61,740
Sales Tax (7.5%)
EBITDA $4,528
$28,528 $4,528
$28,528 $4,528
$28,528 $4,528
$28,528 $18,113
$114,111 $6,015
$33,641 $6,015
$33,641 $6,015
$33,641 $6,015
$33,641 $24,062
$134,565
N et Profit/
EBIT Loss (%)
Margin $15,066
32.45% $15,066
32.45% $15,066
32.45% $15,066
32.45% $60,265
32.45% $18,220
34.27% $18,220
34.27% $18,220
34.27% $18,220
34.27% $72,879
34.27%
N etInterest Expenses
Profit Margin $298
24.95% $298
24.95% $298
24.95% $298
24.95% $1,191
24.95% $154
22.72% $154
22.72% $154
22.72% $154
22.72% $616
22.72%
Sales Tax (7.5%) $6,594 $6,594 $6,594 $6,594 $26,378 $7,361 $7,361 $7,361 $7,361 $29,446
N et Profit/ Loss $21,635 $21,635 $21,635 $21,635 $86,542 $26,126 $26,126 $26,126 $26,126 $104,503
N et Profit Margin 24.61% 24.61% 24.61% 24.61% 24.61% 26.62% 26.62% 26.62% 26.62% 26.62%

Quarterly Profit and Loss Projection Year 4 & 5

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