We have determined beyond doubt that high quality bioethanol fuel based furniture can be made for relatively cheap and that existing models are routinely marked up triple digit figures by percentage of profit margin.
We have also identified a substantial portion of urban dwelling millennials have demand for such a product if only it were in their average price range.
T he following is how we envision a traditional end-to-end operating cycle:
- Request by quantity for manufacturing is made to Chinese manufacturer and cash for cost of manufacturing as well as shipping is held in escrow by Alibaba.
- Orders are fulfilled and shipped via sea freight approximately 1 month after they are received by the manufacturer and sent to nearest US port.
- Once receipt is confirmed, cash is released to the manufacturer and port shipments are distributed to Amazon fulfillment centers within 1 (one) week where they are made available to the public.
Even with an ideal order fulfillment process there are always known and unknown factors which may impact operating cycles. Known factors include things such as national holidays in which manufacturers or shippers may not be working. Unknown factors include things such as trade embargoes, currency fluctuations, political instability, or a drastic increase in production costs as the price of raw materials rise for any number of reasons.
Point Of Sale Decline.
Brick and mortars retail stores, while once on the cutting edge of convenience, have since suffered considerably in sales thanks in large part to big box ecomms like Amazon which have cut delivery times to a minimum. Its for that reason we wont be fulfilling from any brick and mortar, or other point of sale locations, and all sales to end users are envisioned to be made via Amazon.
Out-competing The Competition.
The furniture industry is notorious for some of the worlds worst nearly markups, generally in the 200-400% range. If salespersons are involved, they usually drive it up another 15-20% on top of an inflated MSRP. In addition to this their is MAP (Manufacturer’s Advertised Price). This lower price is the minimum at which most retailers are allowed to sell the item. Salespeople resist consumers who ask for this price as they only receive about 7% commission on MAP sales. We have none of this.
Millennials constitute 21% of all discretionary purchases...
We believe the pursuit of such a device to be a profitable course of action not only based on circumstantial evidence but as well as an existing demand for bio ethanol units, even at drastically higher price points.
We therefore conclude that in accordance with general marketplace principles lowering the cost will necessarily make it more accessible to broader segments of the population – particularly millennials.
Millennials are defined as anyone born between 1977-2000 (16-38 as of 2016) and they represent 25% of total us pop or about 75 million persons with a combined spending power that constitutes 21% of all discretionary purchase in the overall marketplace = approximately 1 Trillion USD.
Of them all, 3 in 4 aren’t parents yet, and about 1 in 4 who aren’t yet parents are too young to lie on their own, meaning about 2 in 4, or half of overall millennials fall within our ideal demographic. Together this specific segment represents $500 billion of discretionary income.
Given that we are targeting urban dwelling young professionals, we go on to further identify who isn’t in a home yet – home ownership remains near an all-time low among millennials. Many are choosing to rent in urban areas instead of buying homes on the outskirts of town or in suburbs.
Accordingly, furniture sales to Millennials has more than doubled—from $11 billion in 2012 to $22 billion in 2014 according to a recent Furniture Today Buying Trends report. As of 2015, according to Furniture/Today’s 2015 Consumer Buying Trends Survey, millennials are the number one buyer of furniture constituting $27 billion on furniture and bedding.
An applied ratio of 2 in 4 for our specific marketplace means about $13.5 billion segment.
If only 1/10 of 1% buys our product that’s $13,500,000 in market share to capture.
Further research has indicated grey is their top purchase color while an accent color of blue is their second choice overall.