Summary: Key Points and Details - Khazanay Case Study

Introduction:

Khazanay is an online store selling shoes.

Cash on Delivery (COD) is the preferred method of payment.

Leopard's courier services are used for deliveries.

Courier Services:

Courier charges are based on weight and zones (A, B, and C).

Charges for a half kg package: Rs. 150 (Zone A), Rs. 200 (Zone B), Rs. 250 (Zone C).

Additional weight is charged at Rs. 50 for each extra half kg.

Customers cannot check the product before making payment.

If an order is canceled or payment is refused, the packet is returned to Khazanay, incurring double
charges.

Website Development and Marketing:

Khazanay's website developed by a tech start-up.

Positive response and feedback received from the market.

Soft launch and marketing through Facebook and word of mouth.

Inventory and Sales:

Shipment distribution: 20% to Zone A, 30% to Zone B, 50% to Zone C.

Bulk of shipments (80%) weigh half kg, 15% between half and one kg, 5% between one and one and
a half kg.

Some customers insist on opening packages before paying or refuse to acknowledge the product,
leading to returns.

Shoes of below-average quality are not selling well.

Procurement and Credit:

Initially, one lot purchased on cash, followed by two lots per month.

Supplier started giving credit to Khazanay from July 2016.

Payment must be made before the 5th of the next month.

Financial Considerations:

Average selling prices: Rs. 3,000 (excellent quality), Rs. 2,500 (good quality), Rs. 2,000 (average
quality).

Miscellaneous expenses estimated at Rs. 75,000 (packaging, traveling, staff lunch, etc.).

Furniture purchased for Rs. 50,000 (expected to last five years).

Laptops and additional mobile phones bought for Rs. 150,000.

Invoice from courier company on 31 December 2016: Rs. 395,000 collections receivable, Rs. 47,775
payable as courier charges.

Accounting and Loans:

Usman and Farid suspect personal funds were invested, treated as a loan if confirmed.

$1 treated as Rs. 105 for ease of accounting.

Note: This summary covers the main points and details from the Khazanay case study. It is advisable
to review the complete case study for a comprehensive understanding.