Blog #5

The revenue model strategy for our business includes pricing for customers on the web. Our bottles of shampoo or conditioner will have the same size. As a startup company we agreed on keeping the size of the bottle steady, and later on we will offer a variety of sizes to the customers. Our pricing tactics is as follow:

  • Bottle of shampoo or conditioner:  22 Fl.oz./650 mL⇒ $ 23
  • A set of shampoo and conditioner ⇒ $ 40
  • Gift cards purchase  ⇒ $25- $500
  • Holiday gift sets $ 30

Our 2 year revenue plan is as follows:

  • Assuming we sell our products to 500 customers/month (17customers/day)
  • 425 customers decide to spend money on a set of shampoo and conditioner ⇒ $40×425 = $17,000
  • 75 customers decide buy either a bottle of shampoo, or conditioner ⇒ $23×75=$1725
  • Monthly sales = $18725
  • 2 year gross annual sales = $224,700

Our 5 year revenue plan is as follows:

  • Assuming that our website attracts about 100 customers and we sell our products to 70 customers on a daily basis:
  • 60 customers decide to spend money on a set of shampoo and conditioner ⇒ $40×60 = $2,400
  • 10 customers decide buy either a bottle of shampoo, or conditioner ⇒ $23×10=230
  • Estimated daily sales( with 3 gift cards purchase with a minimum of $25)= $ 2,705
  • Assuming that the daily sales and number of customers will stay constant :weekly sales = $ 18,935
  • Monthly sales = $75,740
  • 5 year gross annual sales = $908,880

⇒During the holidays seasons we will be expecting a peak in our daily sales so we can roughly estimate our annual sales to be $913,880 ( $908880 + $5000= $913,880)

Metrics that matter for our business model include customer satisfaction, productivity, net income, and cash flow.

Here’s a table of our various costs

Of course this is an optimistic business model, but we believe that by marketing on Facebook and black beauty blogs, offering worldwide shipping, and pivoting as we go, we will reach our five year goal.

Here is our latest Business Model Canvas

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s