ESTABLISHING A RETAIL ONLINE

BUSINESS SHOP/BOUTIQUE
 I. Executive Summary

1.1 INTRODUCTION

E-business is one of the fastest growing fields of business in the world. You can almost

buy anything you want through online selling, which provides easier and faster choosing of what

customers likes in easier and faster way. One of the most likeable thing to buy online are clothes.

Clothing/ Clothes retail stores are an all-time favorite business by businessmen. Because of these

it encourage companies to build websites and to come up with new ways of serving their customers

online with great satisfactory with good quality products that will not disappoint customers.

“Wear It On” is an online ready to wear clothing store that would help customers choose

and pick what they want in the easiest way possible, with the trendiest clothes for men and women.

It is a start-up retail online boutique that will sell fashionable clothing. Its clothing selections and

exclusive personal style services will also include a detailed Style Assessment that will ensure that

our customers are well dressed and will give them the satisfactory that they want. It will be sold to

all millennial who desires to wear trendy clothes according to what they like, it may be inspired

clothing from the 90’s or clothing from the most trendiest designs that it could be. It will be open

to all men and women.

“Wear it on” will be selling blouses, t shirts (for men and women) , shorts (for men and

women) and a lot more trendy clothes also including swimwear. That will give you greater

satisfactory that will bring up your most confidence in the world by your clothing.
 II. INDUSTRY ANALYSIS

II.1 Background information of the industry

E-commerce and E-business In order to understand e-business and this business plan on an online

store, it is good to have a closer look at the background of e-business and the developing of e-

commerce. Defining e commerce, “Ecommerce
 is
 doing
 business
 electronically
 across


 the extended
 enterprise.
 It
 covers
 any
 form
 of
 business
 or
 administrative


transaction
 or
 information
 exchange
 that
 is
 executed
 using
 any information


and
 communication
 technology. “Ebusiness
 is
 a wider
 concept
 that
 embraces


all
 aspects
 of
 the
 use
 of
 information
 technology
 in
 business.
 It
 includes


not
 only
 buying
 and
 selling,
 but
 also
 servicing
 customers
 and
 collaborating


with
 business
 partners,
 and
 often
 involves
 integration
 across
 business
 processes


 and
 communication
 within organization.”

Our business is mainly located at Zamboanga City, this will be our home base where are

all transactions will happen and where all the shipment will came from. This will be operated not

just by one person but many who will be in big help especially when the operation of the said

business will start.

The e-commerce industry is gaining ground as digital marketplaces end 2018 with record

highs to reflect the growing number of Filipinos doing their shopping online.

The Internet World Stats reported that around 67 million Filipinos were active online in January

2018. This was a 12% increase year-on-year.

The country also ranked first in the world in terms of social media use and amount of time spent

online. Businesses believe this makes the country an ideal place for e-commerce to thrive.

A report by Statista said that the Philippine e-commerce market revenue grew to $840 million or

about P44 trillion in 2018 from $688 million or about P36 trillion in 2017. Revenue is expected to

grow about 10.5% annually leading to a market volume of $996 million dollars or about P53

trillion pesos by 2019.

Co-founder and CEO of Zalora Philippines Paulo Campos III said their company has seen

accelerated growth in the last 2 to 3 years, particularly in the 4th quarter of the year where most

transactions happened. He said he expects more growth in 2019 and the years ahead.

According to Campos, about 2% of the overall retail market is done online. E-commerce

penetration is about 2% and he fully expects that to go up to 5-7% in the next few years, which

means the market is growing extremely fast.

11-11 and 12-12 online shopping festivals.

The Lazada group saw 1.3 billion visits during their 11-11 and 12-12 sale days. 12-12 sales reached

more than 30 times their normal day gross merchandise value in various locations, including the

Philippines.

The consistent growth of e-commerce in the country can be attributed to the convenience sought

by digital-savvy shoppers.

The government also sees a big potential for e-commerce. The Trade department launched its e-

commerce roadmap up to 2020. It targets to have e-commerce contribute 25% to the gross domestic

product by 2020 from 10 percent in 2015. The agency believes going digital will also help micro,

small and medium enterprises compete globally.

Campos said he believes the Philippines can be number 1 in terms of online shopping given the

amount of time Filipinos spend online and the ecosystem converging to make e-commerce thrive

in the country.

“The beautiful thing about e-commerce is somehow it's a very democratizing force that anyone

can really sell online and that you no longer need big investment to put up a store or offline

presence to be able to sell,” said Campos in an interview.

“There's something about the power of unleashing the digital Filipino into the global economy that

is quite exciting and that any type of business that emerges online, whether it be e-commerce or
even some of the other digital businesses like ride-hailing, will be particularly strong here in the

Philippines than in other countries,” he added.

While Campos believes internet access and the payments space can be improved, he said the

country has crossed over to a point where e-commerce can only grow and become a major

contributor to the retail sector.

This prospect encourages entrepreneurs to take their businesses online as they enter 2019.

https://cnnphilippines.com/business/2019/01/04/philippine-e-commerce-2019.html

2.3 Advantages and Challenges of E-Business

E-Business has a various number of advantages compared to traditional business, but with

advantages also come the challenges. Often when thinking of e-business people come up with

thoughts of security, convenience and low costs. For an online store it is essential to go over these

issues to minimize the risk and maximize the benefits of online shopping. Advantages of E-

Business Global promotion: E-commerce offers you a chance to promote your products globally

through the Internet. E-business has made it possible for companies to globalize their business

much faster than before.

The Internet provides a chance for users around the world to access your web site, even if

your business operations are only local. The web page is visible online to anyone, anywhere, which

provides your business the reach that wasn’t possible before. In addition, it gives smaller
businesses to compete with other companies on the same ground locally and internationally, which

is huge advantage, but also a threat.

2.4 Low costs

The costs of running an e-business are relatively smaller than in running a regular business.

First of all, the operating costs of an e-business are low. An online business does not need large

offices and warehouses and it is not tied to a certain location, thus reducing infrastructural costs.

Also the inventory costs and labor costs are minimal, because there is no need for a large staff. Not

only does the e-business save money, but it also saves time. An online store is functioning on its’

own without you being behind the counter all the time. Also since all the action happens through

the Internet, the transactions between the buyer and the seller happen faster. Marketing costs are

also reduced in e-businesses. Direct marketing to the customer can be done via e-mail. Many online

shops have a loyalty program, which encourages the customer to shop at the same place again by

rewarding the customer with, for example, discount coupons/codes.

This can be as well done via e-mail. Convenience: Convenience is a great advantage that

comes with online shopping. For example, an online store is open 24/7 and is accessible from any

location with and Internet connection. In other words, e-business removes the restrictions of

availability and location. It also allows the customer to shop without leaving home which saves

him the effort of dressing up and physically moving from a place to another just for the possibility

to go shopping. E-business also provides the customer with the option to keep their product in the

electronic shopping cart if they don’t feel like purchasing the product right away.
 In our online business we don’t need to invest much money for this doesn’t have any

physical store yet that’s why e-commerce is considered as low cost businesses. We only need to

prepare payments for our suppliers and also our way of delivering it may be via LBC, JRS or J&T

Express. Where it doesn’t really cause that much for we could include it in their order and that’s

what we call “SHIPPING FEE”

2.5 DISADVANTAGE OF E COMMERCE

The possibility of comparing similar products in different web stores is also a matter of

convenience. There is no need to walk to the other store wince it is one click away. This is also a

threat for the online shops, because it is extremely easy for the customer to buy the product from

another store.

2.6 Customer service:

Customer service is one of the key elements and one of the best advantages that an e-

business can offer. The customer service is better and more personal when the customer can be in

touch with the company through the Internet, without having to leave home. Also updating the

web site with new information on products, prices and availability is easy and fast.

2.7 Challenges Security:

One of the biggest problems in e-business and online shopping is the security issues. The reason

why security is challenge is in e-business, because the transactions happen through the Internet

and because of the TCP/IP (Transmission Control Protocol / Internet Protocol) protocol that

governs the communication. These protocols are open protocols, which means that when the data
is transmitted from a computer to another, a third party can intercept it. This brings us to the reason

why we have encryption.

In addition there are there are the trust issues. Online shopping is still considered to be a bit shady

by some people, because of trust. The customer may think: Will I ever get my products? Where

does my money go? How is my information used? These are all questions that make the gap

between ordering and not ordering. We should always ensure to tell people how you are using their

information, allow people to view the information that you are keeping on them, allow people to

change this information, tell people how you will use the information and with whom you will

share it, Embed all of the above points in a privacy policy and display its trust mark on the website.

2.7 Competition:

Competition is a difficult one, because it is both an advantage and a threat. This is why I

put it last in the list of challenges. For a small start-up business the Internet provides competitive

advantage, because on the Internet, the store is almost on an equal level with the online stores of

big corporate chains. It is also a challenge, because the costs of putting up an online store are very

low, which means that the entry barrier is extremely low for new companies. Shortly, everyone

are almost in the same position, but the competition is tough.

A lot of business man and women are entering online businesses since it is the fastest way

to reach our customer. Wider opportunities are mostly given to people who are in the online

business world though there are a lot of competitors that you may encounter. Example Shopee,

Zalora, Lazada and a lot more. These are just few of the big competitors that we have around e

world.
 III. COMPANY DESCRIPTION

Wear it ON Fashion Boutique, is an online boutique who offers fashionable and trendy

clothes for men and women to wear, from formal to daily use and beach wear that is likable and

being sell at the most affordable price. You’re go to place, your buying place when you don’t want

to take time going to mall and waiting in line which will save you time and effort. We will be

offering trendy clothes and all millennial will like and could afford. Our main business site will be

here in Zamboanga City. Shipment will come from here and we will also address it here at

Zamboanga city.

3.1 The Mission and Vision of our online clothing boutique

Mission

The company’s mission is to offer stylish, great, affordable brand name clothing and clothing

accessories to our customers. Promising to offer our customers options and choices to solve their

fashion problems. My inventory will not require any alteration before or after a customer

purchases any clothing item. My customers will now have an online outlet to shop for all their

apparel needs with great and affordable price.

Vision
Our vision is to help individuals and prospective customers have an online boutique store and

eventually a store front that will offer varieties of quality brand name clothing with affordable

price. With that we hope to save our customers money from not alteration their new outfits before

and after purchased.

Also we want to offer an internet outlet dedicated to their shopping needs. WEAR IT ON boutique

online store will provide customers worry free, safe and secure shopping environment and

shopping online means customers will shop at their own convenient time without having to wait

in line at the checkout lane. Customers will be offer varieties of options in clothing and clothing

accessories for their fashion needs.

3.2 Goals and Objectives

One of the goals of Wear it On fashion boutique is to give our customers a hassle free

environment where they could shop anywhere and anytime buy just clicking and visiting our online

shop that will be posted in all social media networks that is accessible to everyone. By just using

their mobile phones and internet they could easily access and reach our shop. One of our goals is

to provide customer with wide variety of options that we could offer that they will surely comeback

and give them good customer services. To surely entertain all their questions and all their needs

and to always ensure their privacy at all cost. To always take care of the trust and satisfactory that

our customer is needing.

3.3 FEATURES & BENEFITS

One key feature that separates Wear it ON from all other local boutiques and chain online

stores in the area is our commitment to providing women and men’s generation stylish, quality
clothing options. Because our primary concern will be ensuring our consumers are happy with the

fit and style of their purchase, we will provide products tailored to all shapes and sizes of women

and men. In addition, we will make every effort to have petite and plus size versions of our

merchandise in stock. If they are not in stock, ordering them will be easy, cheap and efficient.

Further, WEAR IT ON will not just be a online store that sells clothes. Our clientele will

benefit from an experienced, knowledgeable sales staff. Out of the gate, our goal is to implement

a superior customer service system. Beyond our friendly reception and an inviting atmosphere, we

will also offer customers fashion information and advice. The service is like a beautician who

offers advice on what hair styles best complement his/her client’s face. Our hip and qualified

fashion-industry expertise will ensure our customers walk away with the perfect outfit.

3.5 DEVELOPMENT

As our company grows and our online boutique earns a positive reputation, several

opportunities will open to us. And we are considering some options already. Should we choose to

remain a small local boutique, we will develop and grow our company by increasing existing

clothing lines and expanding our selection to include additional products such as swim wear,

lingerie, or sportswear. Within five years, we will assess the potential of building our physical

stores in select location.

The power and ease of an online storefront is obvious to us, and we plan to develop one

quickly and efficiently. We also see the potential for regional and/or national expansion at some

point. Our online clothing store will help to spread awareness of our product line and brand to a

wider community. And more access to our customers.

4.1 Market Segmentation

The purpose of this section is to establish the division of different market groups with

similar needs and wants to a market segment, which is suitable for “WEAR IT ON”. For the

concept of an online store selling different clothing line for men and women, the key elements in

this market segmentation are: gender and interests. In short the target market is: boys and men of

all ages, with an interest towards clothing line.

Gender because our shop mainly sells clothes that are not just trendy for women but also

for men, they will be the main target group. “Wear It On” is going with wide clothing apparel, for

teenagers or so called millennial with also range options for sizes respecting everyone’s body

feature. With them being the target group of this store, also the marketing will be targeted towards

teenagers.

Interests. The other key element is interests, which in this case, is being fashionably

presentable at the most affordable price. It is clear that the products of this store are targeted to

people who share fashion interest. Here in the Philippines, we are more likely to be fashionable to

show who we truly are by dressing up and wearing clothes in the most comfortable way and where

we feel most likely ourselves.

In short, WEAR IT ON is focusing on men and women who share same interest about

fashion. We focus on people of all ages, so it doesn’t matter if a person is just starting to play with

her clothing or a student who wants to wear nice and likeable clothes that she/he could be

comfortable. Wear it on sells quality fashion trendy clothes that everyone could use since it is also

offering wide range of sizes in respect to our customer’s body feature and that is why the store is

suitable for people at all levels.

The store also provides comfy clothes, so #FRIEDSHIPGOALS or

#RELATIONSHIPGOALS can buy their friendship clothes and relationship clothes from the same

place. In addition to selling new styles, we might do a section on the web site. If we decide to put

this plan in action, it of course means that we should always pay attention to what is more likely

to be sell in our online boutique. This way we can access a larger market, because new designs

will be offered but still is sell in the most affordable price as it could be that will be “PATOK SA

MASA”. Through this we could make the target market larger.

4.3 Marketing strategy

marketing strategy is a plan that will measure the resources of the company and apply it to increase

the sales and gain a competitive advantage among the competitors. It involves several market

analyses, which will provide information for the actual strategy. There are many ways of executing

a marketing strategy, but this is the way that in my opinion is the most suitable for this type of a

company. A marketing strategy consists of SWOT analysis, which concentrates on the internal and

external environments, in which the company is operating. The strategy also has an internal

environment scan, a marketing mix, which consists of the four P’s. There will also be an external

environment analysis, which contains a competitor analysis. After these analyses, the actual

strategic plan will be made, which will be the final marketing strategy.

Wear it On is simple, we will introduce wide variety of designs of clothes that are wearable

by anybody and this will be one of their power to influence and be more confident about their

selves.

Usually marketing strategies are done for several years ahead and are very detailed and

tactical plans. However, since Wear it ON is a startup business, I will do the marketing strategy

for only the first year, which is the most crucial year, because it is the year that the company has

to penetrate the market. There is no telling in how the first year will go in reality, so there is no

point of making a multi-year marketing strategy straight from the beginning. The marketing

strategy for the upcoming years can be done later on when the company has experienced the first

year of operation.

Online marketing offers an enormous amount of possibilities for companies. It is an

evolving world which is why constant development of strategies is necessary. It is much easier for

customers to find substitutes from competitors on the internet because of the minimal effort a
person has to make to get to another website. Every internet page is full of different kinds of touch

points as advertisements and offers which makes it hard for companies to guide potential buyers

to a certain website without “losing” them through their way of the internet. This is exactly why

the fundamental understanding of consumers’ behavior is so important.

Regardless in which world – online or offline – customers nearly behave the same way.

First step is always to catch customers’ attention. There are just different types of strategies which

are used to get in touch with a certain target group. Which strategies are used at the end depends

on the way potential buyers do behave and how a company is able to understand these actions.

Nowadays it seems to be indispensable running a business without any online presence

because figures show that the trend from consuming in shops goes in the direction of online

consuming.

4.4 TRENDS

The retail fashion industry is a solid business with ever-changing styles and ever-present

consumer demand more and more consumers are looking for change. They’re searching for a more

serene and customer-friendly shopping easier and faster experience. This is true especially for

those nearing retirement age. In reality, this market decrease will not occur for at least twenty

years. Even then, clothing will always be in high demand. The fashion industry in has been thriving

since the advent of moving pictures.

Strengths

 Experience and understanding of the fashion industry

 Unique shopping experience with exceptional customer service

 Great online services

 Large and growing consumer base

Weaknesses

 Untested market in Zamboanga City

 Internet Connection

Opportunities

 Outstanding shopping experience will lead to repeat business

 Growing online clothing store

 Establish our very own Wear it ON clothing line

Threats

 Cost and effectiveness of marketing to women and men “Baby Boomers”

 New retail shops that may or may not open in the future onine or physically.
  Bogus buyer or scammer.

 Online shops with the same product.

 People who are not that use in using technology.

4.6 STRATEGY & IMPLEMENTATION

Wear it ON recognizes the importance of marketing. And to that end, we plan to promote

our retail business with an ambitious, targeted marketing campaign, local media coverage, print

advertising and a direct-mail campaign. Our goal is to keep our marketing budget to no more than

5% of our gross annual sales. Our competitive edge is its focus on the process than on product. The

website is just the endpoint of an entire marketing program to drive customers' interest. Though

we have confidence in the quality and attractiveness of our products, we know that building the

road to the website is our most important job.

4.7 INTERNET STRATEGY

As the Internet has become a staple in life and retail merchandising. These platforms allow

us to create an online storefront quickly and will manage all aspects of it including creating

shipping labels, accepting payment, and monitoring inventory. Customers will also be able to

create wish lists for items they want to purchase later.

Having this online presence will allow us to build our email marketing list and send regular

promotions to customers with new product announcements, discounts, specials, birthday coupons,

and fashion ideas.

to purchase items online. Eventually, we hope to establish and nurture an online social community

where women and men can gather and discuss topics of the day, network and share clothing secrets.

4.8 SALES STRATEGY

WEAR IT ON plans to generate sales via strategic marketing efforts. These concentrated

efforts will be targeting new and returning customers as well as single-visit tourist consumers. We

will also implement a referral program rewarding customers who refer new customers with

discount coupons. We will offer promotional discounts and seasonal and clearance sales

throughout the year.

WEAR IT ON will accept cash and payment via major credit and debit cards or through bank to

bank payment ml Palawan Cebuana western union etc.

4.9 OPERATIONS

As a retail online shop, WEAR IT ON will conduct business seven days a week from 10

a.m. to 6 p.m. Monday through Thursday, from 10 a.m. to 8 p.m. Friday and Saturday, and 12 p.m.

to 6 p.m. on Sunday. During the holiday seasons and during special events, we will extend store

hours. At this point, the retail ONLINE store will take require approximately 2/3 of the available

space. We will use the remaining space for stock and administrative purposes. In addition to the

two full-time co-owners, we will hire three part-time employees to serve customers.
 We will also attend relevant pre-season fashion trade shows and ensure we are at the

trendiest line on.

4.10 UNIQUE SELLING PROPOSITION

Sometimes the best advocate for online shop and product are our customers. Our product

descriptions – something we’ll cover late – can only do so much to convince folks to part with

their money. Allowing our customers to review products they’ve bought lets them express how

they felt about the overall experience and the product itself. Plus it’s the perfect way to get your

products validated by a third party. Honestly, who buys anything online without viewing a picture

of it first? Fortunately with today’s smartphones packing some very capable cameras, almost

anybody can shoot quality product photos. And there’s really no excuse for not displaying your

products. Your checkout page is the final stop on people’s shopping journey. And one of the best

ways to increase conversions and sales is to make it hilariously easy for folks to pay you.

After all, it’s the place where visitor finally become your customers.

We don’t really think about loading times these days and that’s because a reliable high-

speed internet connection is taken for granted. Although one thing is for sure: People aren’t going

to stick around for long waiting for a page to load! So we always need to ensure that there will no

bugs when it comes to our site. Good quality products should always be ensured and good customer

service. Having good relationship is one of the most important aspect in having a business cause
through this the customer will always remember your hospitality. In a world with big competitive

I guess the edge of our online shop not is that it is not only about gaining money but also gaining

respect and love from our customer and giving them what exactly they want and needed.

4.11 Market Segmentation

Liquid Culture will be focusing on two distinct groups of women that purchase outdoor clothing:

 Women 17-25 years of age: Youth drives the market so this is the important group to attract

to the website. They have less money than the older group so we must give them what they

want for less. The key is to have inexpensive selections in each clothing group that have the

popular cut. The company's logo attractiveness to this group cannot be stressed strongly

enough. The initial small purchases will grow larger over time.

 Women 26-40 years of age: They are the core group that will drive Liquid Culture's

success. This target group is responsible for the growth of outdoor women's wear. They will

be harder to pull into the website. Once there, the key will be promoting the quality,

attractiveness and savings. In addition, we will have to assure that the purchase will fit the

way the customer wants it to. It will be crucial that the return policy is hassle-free and speedy.
 V. PRODUCTION PLAN

Our production system shall strive to attain service excellence in addition to manufacturing

safe, quality products. This shall be undertaken through the engagement of modern production

techniques using up-to-date assembly technology. This will also result in low production costs.

We also intend to ensure that the suppliers we engage are committed and reliable so as not to let

down the final consumer in terms of the quality of the product and time of delivery.

5.1 ADVERTISING

Advertising The advertising will contain Internet advertising on web pages, Facebook and

Internet search engines like Google, Facebook Instagram and etc. Also newspaper advertising is a

possibility and later on, television advertising. Television advertising is left out in the beginning,

because of its high costs. It is very important for an online store to do advertising in order to make

people aware of the store. Also aggressive marketing will help Wear it ON to become a well-known

online boutique.

Facebook and social media . Creating a Facebook page for the company is basically free

of charge and it can spread easily among people on Facebook. Several companies nowadays have

a Facebook page where they announce upcoming events for example information on new product
arrivals. Wear it ON could use this channel to inform people about sales, new products and other

company related news. It is an easy way for the company to be in touch with its customers. Social

media is also a channel where information travels extremely fast from one user to another making

it a very efficient tool in marketing and advertising

5.2 LOGISTICS

Logistics and the delivery of the products is a large challenge in e-business. Delivery is key

service phases, in customer service, in which the customers discover weather the company fulfill

their promises. The customer finds out if the products arrive in the schedule and time, and weather

the products meet the customer’s expectations. The customer also has to have an option to return

the products if it differs from the one they ordered, if the product is damaged or if, for example,

the size is incorrect.

5.3 DELIVERY

The main issues in delivering the product to the consumers are time and money. Delivery

of the products is quite costly and the delivery takes a few days to reach its destination, even if you

keep it inside the country. The main delivery options are digital delivery, postal and courier

services and van delivery. Digital delivery is used in case the products are in a digital form, for

example mp3 files if it is music that is bought from an online store. The cost of this delivery is

near to zero. These delivers are often regular and follow a specific delivery schedule. The cost for

this delivery is quite high because of personalization, potential of spoilage and the speed and the

mode of the delivery. Postal and courier services are used if there is a need to move packages in
different sizes, physically from location A to location B. This type of delivery provides the

customer the option to have the products delivered to a public or a private address in the agreed

time. The cost of this service depends on the weight, bulk, the distance that the product has to

travel in order to reach the specific location and the time that it takes to get there. For example if

the customer wants that the product is delivered by a courier to his home on the next day costs

more than if the product would be delivered by mail, during the next week and to a postal office.

VI. Organizational Plan

6.1 Management Summary

Employees will be encouraged to work within their creative, physical, and intellectual

boundaries. All duties will be divided and delegated according to strengths and weaknesses. At

Mahogany we will expect a high degree of customer service skills and personality as this is

essential to our success.

Our team leader will assess the productivity and perform informal employee’s evaluations of all

employees every six months. These bi-annual evaluations are conducive to the continued growth

of our small business.

6.2 Organizational Structure

Wear it ON is a small business and therefore requires a simple organizational structure.

Our team leader will act as general manager. All decisions are made in-line with the company

objectives. Employee tasks are delegated based upon their level of expertise, creativity, strengths

and weaknesses.
6.3 Management Team

Team Leader, co-owner and general manager will be responsible for all administrative

functions, purchasing, inventory control, and promotions. She will also act as a part-time sales

representative. Finance and operations management. She should have an extensive background

in purchasing, inventory control, and marketing.

6.4 Payment methods

94,5% of online shop owners values the variety of payment methods as an important factor

in a successful online shop. Hence, usually online stores have a variety of payment options to meet

the needs of the customer. There is payment in advance, which can be done through a transaction

in the customer’s online bank or for example credit card payment. In addition there is the “cash on

delivery” payment, which is probably the safest way for the buyer, but it comes with an additional

fee. It is also very important to analyze different payment options in order to find the most suitable

ones for an online store and the most convenient for the customer. Methods of payment

A regular cash payment is when the customer buys the product from the physical store, not

from an online store. It is the most common way of paying in business-to-consumer transactions.

Payment by invoice is used mainly in business-to-business transactions where the seller has full

trust on the customer’s ability to pay. For example if a new design or clothes store orders products

from the importer, there is often an invoice that arrives with the packages. This method demands

trust and good business relationship between the two parties.

not wish for the traditional paper invoices to your home. Cash on delivery is a safe payment option

for the customer. The customer is able to wait for the product to arrive for example at a near by

postal office, from which they will collect the product and pay as they receive it. There is an extra

fee that is charged though with this option, which makes it a more expensive option compared to

for example the option of paying by credit card. It is also not so convenient for the seller, because

the payment is done afterwards.

Credit card is the most common way to pay for online purchases. It is also very safe, but some

people still find it hard to trust this payment option. As we have found out that security is one of

the challenges in e-business, credit card payment is a bigger step for many people to take, mainly

because you have to give your credit card information to someone or something else, in this case

the web store. Good option for the seller too, because the payment is done in advance. Last but not

least, there is the bank’s online payment service. It is a very convenient way for the customer to

pay the service since they are logging in to their own bank by a personal id and a password, which

is already familiar to them. This is also a payment option, which is convenient also for the seller

since the payment is done in advance.

7.1 Financial Plan

The Wear it ON will be moderate and the cash balance will always be positive.

Being a retail environment we will not be selling on credit. We will accept cash, and all

major credit cards. Marketing and advertising will remain at or below 5% of sales. We will

continue to reinvest residual profits into company expansion, and personnel.

7.2 Financial Assumptions

General Assumption: The cost of goods sold will be 48% of sales. The Wear it ON will

support Online until the business is profitable. We will make a decision on hiring support

personnel as the business grows through time since we do not have any infinite assurance of how

well our business will work out through time. The initial focus will be on obtaining customers

and distribution channels, not be on spending money on the operation. Revenues During the

launch of Wear it ON online project we are forecasting 500-1000 new customers through our

website and distribution channels. We plan on increasing this by 10% per month after the first

quarter of this initial partnership model.

This budget is the budget for the first 12 months and it is based on assumptions and

predictions. It is hard to predict the sales of a startup company, because the amount of

variables is large and it will always depend on how we market and attract customers.

Budget will roughly demonstrate on how much sales need to be made in order for Wear

It ON to be profitable after the first 12 months.

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