How to Start a Business and Write a Business Plan: Entrepreneurship
I. Executive Summary
A. Company Description MBNY Media, Inc. is an online for-profit business, formed on July 3, 2017, to partner with Amazon and their Fulfillment by Amazon reseller program (Amazon). MBNY Media, Inc. will use the resources of Berkeley College-Professors, career advisors, academic advisors, staff, students- to accomplish its goal. MBNY Media, Inc. will serve as a learning tool while studying Business Management & Entrepreneurship in the undergraduate program at Berkeley College. “Students who do major in entrepreneurship or take entrepreneurship courses are three times more likely to start their own business” (Louis E. Boone). Profits from media sales will go towards paying for college tuition, and reinvested into the company. MBNY Media, Inc. also strives to assist other students, entrepreneurs, and business owners with creating online businesses that operate entirely online.
B. Company Objective MBNY Media, Inc., strives to rapidly purchase used media in various online marketplaces to resell to Amazon (Prime) customers. We aim to procure media at 70% to 100%, below the fair market value after Fulfillment by Amazon fees, and taxes. These products are in ‘new’, ‘like-new’, ‘very good’, or ‘good’, conditions to be resold ranging from 100% to 300% + profit margins. Our research covering the past 12 months of sales history on the Amazon Marketplace, has shown that we can produce consistent net profit margins of 150% or better.
C. Ownership & Management Daniyel B. Bingham will serve as Chief Executive Officer, while also assuming all responsibility for daily operations. Shipping, customer service, and marketing will be outsourced through Amazon and their Fulfillment by Amazon service. Accounting and legal counsel will meet with company officials annually or on a needs basis.
D. Start-up Summary & Key Initiatives MBNY Media, Inc. projects to have 50 high-end media items in our inventory, ready to be picked, prepped, and shipped by Amazon, no later than August 1, 2017. Once MBNY Media, Inc. is fully operational with a working concept that nets a profit of $1,000 or more a month, we will have reached our initial goal. The start-up and operational capital for this entrepreneurial project has been contributed by its principal shareholder, Daniyel B. Bingham, in the form of capital contribution towards equipment, cash flow, market analysis software, and FBA fees.
II. Business Overview
A. Business History MBNY Media, Inc. is a personal project by Daniyel Bingham to truly hone his skills and understanding of entrepreneurship. Being a student at Berkeley College studying Business Management and entrepreneurship, this business creates a new way to apply business principles of leadership, management, and marketing, and expands the opportunities to learn in a highly-focused way that results in experience and profit as an entrepreneur and student. MBNY Media, Inc.’s inventory of media will consist primarily of high-end products that sell year-round, with an end of the year focus on Black Friday and holiday shoppers.
B. Vision MBNY Media, Inc. is competing for Amazon Prime subscribers and Amazon non-prime customers, wanting to take advantage of free Super Saver Shipping. Amazon marketplace buyers are willing to pay more to purchase from sellers who are backed by Amazon’s trusted fulfillment service, and this gives us a competitive advantage in a marketplace full of merchants who fulfill their own orders. They are not able to offer free second day shipping, a no question asked return policy, free tacking, and the trust and reliability consumers expect from Amazon fulfilled orders. Those are the main determining factor between why a customer will choose our product over other sellers in the marketplace.
C. Mission Statement MBNY Media, Inc. is a learning vessel that will grow and expand as my skills, knowledge and experience as a student and entrepreneur continues through graduation.
D. Products and Services MBNY Media, will initially focus on used media including art/photography books, textbooks, philosophy, mathematics, religion, occult, esoterica, new age, critical theory, music, literary fiction, and any scholarly subject for the first 6 months. While studying at Berkeley College and utilizing the schools’ resources, curriculum, and professors, MBNY Media, Inc. will find a void within the marketplace and manufacture a product based on consumer demand and profitability potential.
E. Fulfillment by Amazon MBNY Media, Inc.’s customers will have access to customer support by phone or email. This service will be an outsourced service to Fulfillment by Amazon. Fulfillment by Amazon was created by parent company Amazon, Inc. to provide the most advanced fulfillment center in the world. It’s also important to MBNY Media, Inc. that we outsource near-shore, employing American citizens. Fulfilment by Amazon allows us to store our inventory of new and used media in an Amazon warehouse, and then Amazon picks, packs, and ships our media to the customer. They then provide customer service for those products.
F. Fulfillment by Amazon Customer Support MBNY Media, Inc. will focus on growing our inventory and business, rather than taking time managing customer service. Amazon’s trusted customer service department will handle all client returns and provide our customers with necessary help and details to address their concerns. If a customer wants a refund, MBNY Media, Inc. directs them to our adjacent Online Returns Center (Amazon).
G. Fulfillment by Amazon Shipping Amazon Prime members love to take advantage of free two-day shipping, and all the ease and convenience of shopping on Amazon.com. When MBNY Media, Inc.’s products are eligible for our customers to select free shipping as well. As MBNY Media, Inc. will be able to establish a competitive edge, while relying on Amazon’s trust and marketing to win the sale, even at a higher price than other sellers in the marketplace.
H. Fulfillment by Amazon International Business MBNY Media, Inc. will achieve more customers globally by accessing customer bases in Amazon’s international marketplaces in Canada and Mexico.
III. Industry Overview
A. Marketing Research MBNY Media, Inc. assumes the Amazon Marketplace will continue to grow. We will purchase and resell media on Amazon Marketplace by also sourcing products to sell seasonally during end of the year holiday shopping and Black Friday. MBNY Media, Inc. has international access to marketplaces in Canada and Mexico thorough affiliation with Fulfillment by Amazon.
B. Size of the Amazon Marketplace In 2014, Amazon reported that their number of Amazon Prime subscribers was 20 million. In 2017 that number spiked to 80 million. Every one of those Prime subscribers is MBNY, Media’s potential customer. Amazon sells over 100 million books per year and has surpassed google for being the go to place, shoppers make their purchases online. Amazon Prime members will be our primary customer base. Prime subscribers go straight to Amazon's homepage to begin a product search and trust Amazon so much, they do not price-compare with competing websites. “Less than 1% of Prime users visited competing retail sites while shopping on Amazon, versus 12% and 8% at Walmart and Target for non-Prime Amazon users” (D'Onfro).
C. SWOT Analysis
i. Strengths MBNY Media, Inc. has the potential to fulfill orders on multiple marketplaces, and still have Fulfillment by Amazon complete the purchase order. This includes eBay, Etsy.com, AbeBooks.com, and Buy.com. This allows us to offer Amazon’s world-class customer service across multiple marketplaces, providing customer service and expedited shipping, that other sellers cannot compete with. MBNY Media, Inc. will utilize this strategy and strength, to elevate our product and service within a crowded e-commerce marketplace.
ii. Weaknesses Loss of control over order processing and customer service as those two services will be outsourced to Amazon. Being able to keep up with the speed of any marketplace is challenging and the Amazon marketplace is no different.
iii. Opportunities Amazon Prime customers are the core of the current MBNY Media, Inc. business model and we are leveraging this access and trust. This also provides us low overhead expenses and minimal operating costs, since we rent warehouse space and pay minor fees to Amazon. Intelligent analysis software and statistical data on sales history, price history, and real time pricing information of the amazon marketplace are also readily available 24/7 to make the purchases with the highest margins.
iv. Threats Ten years ago, amazon was tagged, “the biggest bookstore on earth”. Today, Amazon in just about the biggest store on earth”. Merchant Fulfilled 3rd party companies who DO NOT use Amazon to fulfill their orders on the Amazon marketplace are not our competition, Amazon is. We truly want to scour the online marketplace for media that Amazon is either out of stock or does not stock. Reselling media online is a popular and competitive market. Amazon Prime member rely on trust that Amazon has built, spending years sending traffic to their website.
v. Trends Amazon shoppers who choose standard shipping are not Amazon Prime members and they prefer to use what is called, “Super Saving Shipping”. The Amazon shoppers who choose 2nd day shipping is Amazon Prime Members who trust Amazon’s ability to deliver what they anticipate when purchasing, as well as the expedited shipping which is one of many perks for Amazon Prime members.
D. Acquisition Strategy We source media through a variety of online sources: Amazon Marketplace, Eflip.com, ZenArbitrage.com, Craigslist.com, Amazon.com, and EBay.
A. Source media on Eflip.com which allows market analysis of over 100 million books in Amazon’s inventory database.
B. Spend $1,000 or less for media worth $3,000 or more. Buy for 10%-100%% below retail average for item.
C. Make sure there's enough profit margin (100%-300%) in the media item
D. List it for $3,000 or more.
E. Send inventory to be fulfilled by Amazon, when sold.
F. Amazon provides ongoing customer service and handles returns.
E. Implementation Plan
A. Operations Officer: Oversee monthly objectives regarding monthly revenue, Cost of Goods Sold. Communication with Fulfillment by Amazon, about returns and cash flow management. Sourcing Inventory: Eflip.com; Zen Arbitrage, Craigslist, Online Book Sales, Local library book sales. Maintain a media inventory of 150 items sourcing (5) $100 and (5) $50 media items a week, then weekly shipping of inventory into FBA warehouse.
B. V.P. Of Marketing: Amazon’s Fulfillment by Amazon service will handle marketing. Amazon will market MBNY Media, Inc. listings by displaying them with an Amazon Prime logo, so customers, and more importantly, Amazon Prime subscribers know that Amazon is handling the packing, delivery, and customer service for the media they are purchasing through MBNY Media, Inc.
C. CFO: QuickBooks Online small business management account connected to a Capital One Spark Business account to manage balance sheet, profit and loss statement, and the financial statement of the company.
F. Projections and Budgets
A. Initial Financial Investment $1200 (Barry L. Reece)
B. Projected Profit and Loss MBNY Media, Inc. has been in business for less than a month and has purchased (30) with a retail value of $3,154.38.
C. Due to Q4 quickly approaching, MBNY Media, Inc. will be sourcing media items that will meet the needs and demand of Black Friday and holiday shoppers. We estimate a 45% increase in revenue during this four-month period.
D. Banking Relationships MBNY Media, Inc. has formed a banking relationship with Capital One Spark Business. We have talked with bankers who understand MBNY Media’s business model and the best way to manage financials, taxes, and expenses. Using Capital One will allow us unlimited cash transactions to purchase goods, while only requiring a $15 monthly fee till we maintain a $2,000 balance. At that point, the $15 monthly fee is waived. We project to meet that minimum balance by November 1, 2017.
E. Exit Strategy MBNY Media, Inc. will address books that do not sell after 10 months of being listed on the Amazon marketplace by liquidating these books on EBay and cutting the price 50%. We will then continue to markdown the book monthly by 10% until the book is sold.
F. Long Term View MBNY Media, Inc. is a learning tool that will pay for college tuition. Within a year, MBNY will be grossing $5,000 to $10,000 monthly by July 3, 2018, reinvesting revenue back into sourcing high-end media. We will continue to innovate a future product that meets market need and demand.
Amazon. Fulfillment by Amazon. 1 Jan 2017. 23 July 2017. <https://services.amazon.com/fulfillment-by-amazon/benefits.htm?ld=SCFBAStriplogin>.
D'Onfro, Jillian. These New Stats about Amazon Should Make Google Very Nervous. 20 Apr. 2015. 23 July 2017.
Kim, Eugene. Amazon Just Made Thousands of Books Free for Its Prime Members. 05 Oct. 2016. 23 July 2017.
Louis E. Boone, David L. Kurtz. Contemporary Business. 16th Edition. Hoeboken: Wiley-Blackwell, 2014.