Constance ADAMOPOULOS ROUVIERE

Andrea PALOMINO FLORES

Tsiorisoa RAKOTONDRABE

ACCT211

Professor Emily SONG

20 January 2022

Case Study : Foxy

1. Of course, when looking at both distribution strategies : the trade shows vs. online sales,
you will find benefits but also risks and disadvantages.

Trade shows is currently Foxy’s first distribution channel. Retailers get to meet the
founders in person and be attracted to their personality and the vision they have for their
brand. It is not just about looking at an item and deciding whether it’s worth the money or not.
Plus, they can check the quality of the jewelry they are about to buy. This distribution channel
goes even further ; because then, customers will be able to try different models, sizes, in the
boutiques of those retailers, they will have the whole buying experience. And this means
building profitable relationship with both the retailers and the customers. If the brand is
distributed in well-known marketplaces, the trust will build up.
However, the downside is that it means only targeting customers coming from the US
and Canada. Plus, even if marketing expenses would not be as high as online distribution, the
amount of effort it requires from the founders and the travel expenses, the rent, etc. are to be
considered. With a new family on the way, this distribution channel is going to be very tiring
and maintaining a great life balance is a challenge.

Online sales allow Foxy to sell to customers all around the world. But this also means
that customers are not used to the brand, and don’t really know the quality of the products.
They could be afraid to buy especially if they are first time customers. Plus, marketing and
advertising expenses would be huge. However, this means attracting new clients through social
medias, websites, giving out free samples, etc. It also allows to have a much better work life
balance and be a lot freer with the handling of your business.

2. Answered in Excel

3. Answered in Excel ; the online marketing campaign would increase by $93,000 because
we can’t include depreciation. However, we could think about the investment costs of
$4,000 for the booth and say that the increase in the budget could even go up to
$97,000.
4. The variable costs for both products between trade shows and online order do not
change. Different quantities will be sold between the two but variable costs for
necklaces and earrings will stay the same.

5. Answered in Excel

6. Answered in Excel

7. Answered in Excel

8. In 2015, online sales are projected to be more profitable than trade shows. Simply
because net income is more important with this distribution strategy, in both the
optimistic and the pessimistic scenario (3%). Moreover, choosing this distribution
strategy is less risky, therefore more beneficial and a better solution.

9. We believe that Ger and Chemel should focus more on the online distribution strategy.
First, because it is more profitable than trade shows, but also because it will allow them
to have a much better work life balance. They will be able to take care of their young
kids and they will not be forced to travel to go to trade shows. Also, they will
considerably increase their group of customers and their reputation from only US and
Canada to the whole world. It is non negligeable for the expansion of a brand.
Of course, online sales have disadvantages as mentioned before and one of them can be
the hesitation of first-time customers to trust a brand they don’t know, and buy
products they have never seen. Jewelry is a domain where people like to try products on
and feel them.
Apart from the fact that selling online allows a much bigger contribution margin, and
numbers are better, shifting from trade shows to online sales will save Ger and Chemel a
lot of energy, time, and effort. They had to work 9hours/day during more than a week
for each event ! Plus, the travel, the fatigue, etc. This could be converted into
developing more and more the website, advertisements, marketing, and the online
expansion of the Foxy brand.
They must work hard to be able to attain their goal of a net income of $100,00. It will be
possible with online sales ; they have to sold the volume required and put all efforts in
this direction.