E-Commerce Retailer Business Plan Example

E-Commerce Retailer Business Plan

The modern world brings knowledge about the human body and the convenience of having things sent to one’s home. We will ensure that everyone has the option of health and convenience.

Solution

Nature’s Candy’s mission is to provide natural supplements at a lower cost using the Internet. We exist to attract and maintain customers. Our services will exceed customer expectations.

Market

The nutritional supplement market is characterized by high-growth rates, medium barriers to entry, and a few large competitors. Many companies have reported annual growth levels of 30%. The market leaders are:

– GNC (General Nutritional Companies, Inc.): A nationwide specialty retailer of vitamins, minerals, and sports nutrition supplements with over 3,000 stores. Generated $1.19 billion in 2000.

– Nature’s Sunshine Products, Inc.: Manufactures and markets a variety of health supplements. Had 2000 revenues of approximately $370 million.

– Rexall Sundown, Inc.: Develops, manufactures, markets, and sells vitamins, nutritional supplements, and consumer health products. Had 2000 revenues of approximately $370 million.

– International Vitamin Company, Inc.: Manufactures, packages, sells, and distributes private label vitamins and nutritional supplements. Had revenues of $107 million in 2000.

The primary distribution channels in this market are mass market retailers, direct sales organizations, health food stores, mail order catalogs, and the Internet.

Competition

Within the mass market retailer channel, the three main primary vitamin and supplement product categories are national brands, broad-line brands, and private label brands. The national and broad line brands consist of 60% of the domestic market, while the private label brands account for the remaining 40%.

Why Us?

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Nature’s Candy’s mission is to provide natural supplements at a lower cost using the Internet. We exist to attract and maintain customers. Our services will exceed customer expectations.

Expectations

Forecast

In the next three years, Nature’s Candy intends to create an e-commerce brand through laser-focused marketing and will grow and eventually make a profit by the second year.

Financial Highlights by Year

Financing Needed

We will be starting with $80,000 from founders.

Opportunity

Problem & Solution

The modern world brings knowledge about the human body and the convenience of having things sent to one’s home. We will ensure that everyone has the option of health and convenience.

Target Market

Market Size & Segments

The market for vitamins and nutritional supplements has grown to over $6.5 billion annually. Herbal sales alone are growing by 20% per year. This market is led by the aging Baby Boomer who is concerned with mortality. There has been a paradigm shift of perception of nutritional supplements. Homeopathic and naturopathic products are seen as normal. Positive medical results from major studies have further legitimized these products.

4.1 Market Segmentation

A significant trend is that people are taking a proactive interest in their health. People are looking to avoid invasive surgery and powerful pharmaceuticals. Naturopathic medicine promotes the diagnosis, treatment, and prevention of human disorders through non-invasive, non-pharmaceutical products and practices. The aging of the American population is a significant trend driving the use of naturopathic and homeopathic health supplements. The Baby Boomers represent over 50% of our county’s discretionary income. This wealthy market segment will continue to grow the sales of naturopathic products.

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Another global trend is the emergence and popularity of e-commerce. Brand-focused Web retailers that can provide quality products, customer service, information, and emotional buy-in by the customer are becoming hugely successful. E-commerce retailers have an advantage in that they are not slowed by the friction of store growth and local marketing. E-commerce companies do not have the excessive overhead of a traditional brick and mortar retailer. Consumers are comfortable buying online and will pay for convenience. Experts predict Web sales to grow to $12 billion by 2003.

This enthusiasm about the Internet is grounded in reality in light of the recent market crash of Internet retailers. The recent Internet crash was based on too-easy access to capital invested into retailers and other dot-coms without reasonable business plans or revenue models. Regardless of the recent fallout, the Internet is a very efficient marketing and distribution model. Nature’s Candy will harness these efficiencies and will grow intelligently unlike other dot-coms that became dot-bombs.

Competition

Current Alternatives

Within the mass market retailer channel, the three main primary vitamin and supplement product categories are national brands, broad-line brands, and private label brands. The national and broad line brands consist of 60% of the domestic market, while the private label brands account for the remaining 40%.

National Brands Examples: Centrum, One-A-Day. Generally do not provide a full line of vitamins or other supplements. The product formulas are conservative and generic in nature.

Broad-line Brands Examples: Rexall Sundown, GNC’s Nature’s Fingerprint, Country Life. Full lines of produce under one brand. Manufactured by company. Stronger potencies and cutting-edge ingredients. Highest price.

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Private Label Products Examples: NatureMed. Under retailer’s name. Smaller line of products than broad-line brands. Manufactured by a third party. More conservative potencies than broad line. Tend to be the cheapest.

Our Advantages

Nature’s Candy’s competitive edge will be their easy-to-use website and superior customer service. The website design will be a competitive advantage because research indicates that an easy-to-use website significantly increases sales. The design of Nature’s site will encourage purchases because it is so easy and quick. Sales are often lost due to complex websites.

Nature’s Candy’s other competitive edge is superior customer service. The mantra of the customer service department is to serve the customer in any way required. Customers that call in with problem/issues will receive personal attention and speedy resolution. This will be a powerful asset.

Keys to Success

Nature’s Candy’s keys to success are marketing, web design, product quality, and service.

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