Business Plan - Online Merchant

Online Merchant

BUSINESS PLAN

E-RETURN SOLUTIONS
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43600 Wonderland Boulevard
Kansas City, Missouri 64105
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E-Return Solutions offers a unique and proprietary solution to managing the receipt, handling, and resale of returned merchandise for electronic commerce and multi-channel retailers. E-Return provides these retailers with the opportunity to entirely outsource the burdensome, complex, and costly chore of managing product returns. This plan was provided by Jason Sears and Esther Schuller and was compiled in conjunction with the MOOT CORP® competition sponsored by the University of Texas at Austin.
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• EXECUTIVE SUMMARY
• THE OPPORTUNITY
• SOLUTION & VALUE
• TECHNICAL INFRASTRUCTURE OVERVIEW
• MARKETING & SALES STRATEGY
• COMPETITION & RISKS
• GROWTH & HARVEST
• MANAGEMENT TEAM & BOARD OF ADVISORS
• FINANCIALS
• APPENDICES
  

EXECUTIVE SUMMARY

"There's going to be a fallout this holiday season. Most online merchants don't preserve customer relationships."

It is common knowledge that the next evolution of online commerce involves developing sustainable customer relationships, but what exactly does that mean for retailers? Many sophisticated online retailers have initiated customized delivery solutions using consumer profiles developed from an online shoppers' clicks and purchases, but that is only the beginning. It is imperative that retailers ensure that the online experience provides comparable customer service as that provided in the traditional brick-and-mortar channel. In fact, 87 percent of shoppers who spent at least $2,000 online during the past six months will abandon a website if they encounter bad customer service. E-Return Solutions addresses a traditionally neglected aspect of this customer service-managing the return process.

E-commerce companies, hoping to grow market share, are feverishly pursuing customer acquisition and brand recognition strategies. These companies are in a relentless race to become the recognized online leader; however, lost amid their frantic efforts to drive sales, many of these companies have failed to address a critical aspect of their business-logistics, and in particular reverse logistics. Reverse logistics is the process of managing the receipt, handling, and disposition of returned merchandise.

With return rates for the online apparel industry ranging from 18-50 percent, an estimated $3.6 to $10.1 billion in returns will be generated by 2003. With online apparel sales expected to increase 13 times in the next five years, the handling of returned merchandise-typically handled by most companies as an exception process-will become extremely cost-intensive and disruptive. E-Return manages the receipt, handling, and resale of returned merchandise for e-commerce and multi-channel apparel manufacturers and retailers, and allows companies to remain focused on driving sales.

While the handling of returned merchandise has contributed to retailer frustration for many years, the explosion in e-commerce has presented a new set of challenges to the retail industry. Multi-channel retailing (the practice of selling merchandise through numerous channels such as brick-and-mortar, online, and/or mail-order catalogs) involves managing multiple forward distribution and....