1. No category

AUGMENTATIONALTERNATIVES.COM:
A BUSINESS PLAN FOR AN HERBAL SUPPLEMENT E-COMMERCE
COMPANY
by
Dennis J. Humble
A SENIOR THESIS
tn
GENERAL STUDIES
Submitted to the General Studies Council
in the College of Arts and Sciences
at Texas Tech University in
Partial fulfillment of
the Requirements for
the Degree of
BACHELOR OF GENERAL STUDIES
Approve;;
CQ\
DR DEBRA
VERIE
Department of Marketing
Co-Chairperson of Thesis Committee
"<7
- -- - -
DR. JOHN DURRETT
Department of ISQS
Co-Chairperson of Thesis Committee
DR. GLENN BROWNE
Department of ISQS
Co-Chairperson of Thesis Committee
Accepted
DR.MICHAELSCHOENECKE
Director of General Studies
DECEfvffiER 2000
f :^
ACKNOWLEDGEMENTS
d ^^^ .
. ^if
The cooperation of many people has gone into the completion of this work. I would
> ^ ^ ^ like to thank personally my thesis committee, Dr. Laverie, Dr. Durrett, and Dr. Browne
for their patience, expertise, and guidance. Without them, the creation of this thesis
would not have been possible. I would also like to thank the loving support of my fiance
Melissa De Pinto. 1 appreciate Dr. Shoenecke and his direction and patience with me
while completing this work as well.
11
TABLE OF CONTENTS
ACKNOWLEDGEMENTS
"
CHAPTER
I.
11.
THE E-COMMERCE BUSINESS PLAN
1
THE COMPANY: AUGMENTATI0NALTERNATIVES.COM
3
m.
COMPANY VISION AND GOALS
8
IV.
PRODUCTS, COMPETITION, PLACE OF PURCHASE
11
V.
MARKET ANALYSIS
14
VI.
MARKETING PLAN
17
MANAGEMENT
22
VIIL
OPERATIONS
24
LX.
CONCLUSION
29
Vn.
BIBLIOGRAPHY
30
111
CHAPTER I
THE E-COMMERCE BUSLNESS PLAN
E-commerce is becoming more and more common place in conversations among
Americans today. It seems that everyone with a product is getting in on the "on-line
craze." Even though, lately, the news bombards the public with negative stories of
bankrupt or near bankrupt e-commerce companies, there are some that have become
very lucrative. One of the most successful types of businesses on the web today is an
Herbal Supplement Company. However, riches cannot be made overnight. There has to
be planning and preparations made before a company can become profitable on the
Internet. A business plan must be created just as it would for any other business. To
create such a plan three distinct areas of study should be taken into consideration: 1)
Business 2) Natural Science and 3) Behavioral Science.
Business knowledge is the backbone of any company. A background in
business and business operations is crucial to creating a plan that will be effective on
the Internet. There must be an understanding of what an e-business is. The different
legal structures of business and which is best in a particular circumstance must be
understood. An awareness of start-up costs and financial organization is needed.
Foresight and market knowledge is needed to establish the company's goals and vision.
A general knowledge of how to market and promote a product on the Internet is needed
as well. Management comprehension is the last aspect provided by business and is used
in designing operations and personnel issues. Such skills can be gained in courses
dealing with buyer behavior, marketing, and promotions.
In order to sell a product effectively there must be a thorough understanding of
the product. The knowledge of natural science gives one the ability to understand
herbal supplements. There must be an understanding of basic chemistries and anatomy.
This will provide an understanding of what the product will do for the customer and
how it does it. This is imperative to creating a business that will persuade the public to
purchase the product. Such knowledge can be found in courses pertaining to chemistry,
physics, and anatomy.
The last area of study needed for creating an e-commerce business plan is one in
behavioral sciences. This will be important to detemiining a target market. It will also
be useful in dealing with personnel issues. Courses such as psychology supply
information and knowledge needed in order to maintain customer satisfaction as well.
Using these three areas of study one can create a successful e-business plan.
One such company that has combined these areas in writing its e-business plan is
AugmentationAltematives.com. The following chapters contain this company's
business plan along with the steps and processes used to create it.
CHAPTER II
THE COMPANY: AUGMENTATI0NALTERNAT1VES.COM
Before the company could be created several business criteria had to be
established. First, the company needed a name. The name of a company should be
straightforward and descriptive. It should be a similar to the headline of an article, an
attention grabber (Covello & Hazelgren, 1994). The purpose of the business and how it
plans to distinguish itself from the competition needs to be established as well. A target
market needs to be established. A qualified leader needs to be picked to head the
company. The start-up costs and how they will be met needs to be established A
location for the company needs to be decided. Lastly, the legal structure of the
company needs to be established.
The descriptive name ofAugmentationAltematives.com was decided on for the
company. AugmentationAltematives.com was formed for the purpose of providing a
safe, affordable, and effective altemative to, and detailed information about the
hazardous and expensive surgical breast augmentation procedure. As a company that
operates primarily on the Internet, AugmentationAtlematives.com provides the herbal
breast enhancement formula. Figure Plus, for sale around the world via its electronic
commerce website. Additional products, such as firming creams and ointments, will be
added to the company's product line at a later date. AugmentationAtlematives.com
decided not only to provide Figure Plus as an altemative to surgery, but also to
distinguish itself from the competition by supplying information pertaining to the risks
and drawbacks that surgery carries. The website contains up-to-date information taken
from the FDA about Breast Augmentation Surgery.
AugmenationAtlematives.com decided to target the adult female population
ages 18 to 50, average income of $30,000-$90,000 per year, with an interest in breast
enhancement. Dennis Humble, a young entrepreneur with experience selling herbal
supplements and a background in customer service, was chosen to head the company.
He has over a year of experience dealing with retailing, wholesaling, and promoting
herbal supplements. As an independent distributor for Herbalife Intemational, Dennis
Humble gained experience in the herbal supplement industry. He was responsible for
both wholesale and retail sales of herbal supplements. During the time spent with the
company he gained knowledge about the laws and regulations pertaining to the
advertisement and sale of an herbal supplement. He also was trained to promote
effectively herbal supplements to both the public and to potential distributors. During
this time he was able to eam supervisor status in his first month of employment. He was
able to eam world team status by selling 10,000 volume points in his second month of
employment. He has worked in the customer service field for over eight years in the
restaurant and bar industry. In this industry there is significant customer contact which
requires notable customer service. Eight years worth of face to face contact with
customers in a restaurant and bar atmosphere has given Dennis the experience necessary
to provide the customer service required for a business to succeed. During his
employment he was granted employee of the month and trainer status in both the bar
staff and wait staff He has also demonstrated excellent customer service via electronic
commerce. He currently has accumulated 93 positive and 0 negative feedback remarks
on his E-bay account where he sells Figure Plus. Customers compliment his kindness
and good service regularly.
Dennis Humble currently is completing his Bachelor of Science at Texas Tech
University. He will be obtaining an undergraduate degree of General Studies with an
emphasis in pharmaceutical marketing in December of 2000. The curriculum required
for such a degree will be a great asset for him as leader of this company. This degree
requires focus in business, natural sciences, and behavioral science. . The business area
of focus will fumish the education needed to mn a business effectively. Behavioral
sciences provide him with the background to understand and leam about the chemical
composition of herbal supplements and how they react within the body. Behavioral
sciences will provide essential skills regarding management and customer service.
Skills related to web-design, legal services, and accounting will be fumished by
contracted services.
Financial History
Before business could begin at AugmentationAltematives.com, the company
first 1) created a clean, efficient, persuasive website and 2) acquired needed equipment,
software, and services for automation and record keeping.
AugmentationAltematives.com was formed with $700 cash and $3000
from Figure Plus sales generated on E-Bay for start-up costs (Figure 1). A credit line of
$7000 will be provided by a credit card to afford the remaining $3057 of start-up cost.
any unforeseen expenses, and possible equipment or supply purchases. Wells Fargo
Bank will provide a low cost checking account for the business.
Figure 1. Start-Up Cost Distribution
Office Supplies (12.2%)
Merchant Account (4.2%)
Advisors ( 1 3 . 3 % ) ^ ^ ^ -~. \ Website (29.4%)
Office Equip. (34.8%)
—-- Products (6.1%)
Start-Up Cost Distribution
Metrhant Account
$287
Office SuppKes
Website
$1,987
Products
$410
Office Equip.
Advisors
$823
$2,350
$900
Location and Facilities
Business is operated from the home of Dennis Humble in Lubbock, TX. This
reduces total expenses by more than $1000 per month by reducing overhead and
providing a tax write-off Since 90%) of all transactions and services will be done via
computer the home office is perfect for the business. Any business activity that this
space cannot accommodate is contracted out to the lowest bidder.
Legal Status and Ownership
AugmentationAltematives.com is formed as a Limited Liability Company
(LLC). Dennis Humble has 100% ownership of the company. The LLC was chosen
over the Sole Proprietorship and Corporation entities for the following reasons:
1) Owner is not personally liable for business debts and actions.
2) It is less complicated and more flexible.
3) Income and expenses flow through to the owner and are included on
personal income tax.
4) Does not have double taxation; taxes are not paid on profits.
Source: Small Business Development Center of Lubbock
CHAPTER III
COMPANY VISIONS AND GOALS
Now that the company has a basic infrastructure, the next step in the plan is to
determine the company's vision and goals. The vision of the company is a more
specific restatement of the company's purpose. The goals of the company are concrete
accomplishments that the company will attain through the execufion of the marketing
plan, which will be discussed in detail in chapter VI. The goals of an e-commerce
company should include the number of hits on the webstie per day, purchase rate,
product revenue, and other output rated achievements that will define the company's
progress.
Vision
The vision ofAugmentationAtlematives.com is to increase the awareness of the
surgical risks of breast augmentation surgery and to provide an altemative that will
enhance the self-esteem and thus the quality of life for its customers through natural
means. The Company will achieve the vision through the implementation of the
following values:
.
Customer's 100% safisfaction
.
Empathefic, quality service
.
Honesty and integrity
.
Confinuing education of employees
Providing the highest quality products
The consummation of this vision will result in AugmentationAltematives.com
becoming the number one choice of women across the cyber-community for herbal
breast enhancement.
Goals
The following goals are achievements that define AugmentationAtlematives.com's future. These goals will provide the roadwork for attaining success and are
congmous with its vision.
Intermediate Goals: 1-10 Years
Increase website traffic to 1000 hits per day
Increase purchase rate one half of a point to 2%
Hire a team of live customer service providers
Increase product revenue to $500,000 per year
Obtain an advertising market for other herbal supplement companies and feminine
needs providers
Increase the number of "brick and mortar" retail distributors to 20
Expand to 3 different intemational markets
Become debt free
Short Term Goals: within a year
Finish the website with complete automafion by January 1, 2001
Add one "back end" product
Establish a banner ad on 200 related sites
Become a member of 50 related newsletters
Have a listing on all major search engines
Increase website hits to 900 per day
Have a purchase rate of 1.5%
AugmentationAtlematives.com plans to receive more than 900 website hits per day by
the year 2002. If the sales rate is consistent with the current average of 1%, 900 hits
will translate to 9 sales per day (Trepper, 2000). An average purchase of Figure Plus is
a one-month supply which costs $39. This will translate to $130,000 in revenue. Each
year AugmentationAltematives.com intends to increase its yearly revenue by 4% by
adding more products, increasing the number of banner ads by 1% per year, improving
on the quality of free information available on the site, and by increasing the reorder
rate by 10% each year.
10
CHAPTER IV
PRODUCTS, COMPETITION, AND PLACE OF PURCHASE
The next step in the e-business plan is to advertise the product to be sold in
detail. The competition's product should be mentioned in this secfion as well. The
ingredients of the product need to stated and described. The strengths and weaknesses
of the product compared to the competition should be explained in this section. How the
product is packaged for sale will also be mentioned, along with possible side effects. A
brief description of additional mediums, other than the Intemet, that the product will be
sold on should be mentioned here also. This section is where a strong natural science
background proves imperative. Below is the description of the product. Figure Plus, the
competition, and other mediums of purchase.
Products
Figure Plus is a 100% natural herbal supplement that has been proven to
enhance the breasts of women. The active ingredients of Figure Plus are Ascorbic Acid
and Serenoa repens. Ascorbic Acid is a powerful antioxidant named one of the
essential daily vitamins by the FDA. Its role is to deter the destmction of tissue. It
helps to prevent the breast tissue from breaking down, preventing the breast from
sagging and looking old. Serenoa repens is an herb grown on the south east coast
predominantly in Florida. It helps to increase the net amount of free estrogen in the
body without stimulating an actual increase of estrogen production. It does this by
freeing up bound esfrogen to be utilized by the body. This boost of free estrogen
11
recommended that two capsules be taken three times per day. At this dosage one bottle
will last exactly 17 days. Figure Plus is streamlined to include only ingredients that
provide breast enhancement. This allows it to be provided to the public at the most
affordable cost. This is unlike the majority of the competition that offers "herbal
cocktails" containing a myriad of unnecessary herbs that do nothing for breast
enhancement. Figure Plus has no reactions with any known prescriptions. The side
effects of the product are very slight and are similar to sugar pills. A slight percentage
of women experienced a stomachache and/or headache while taking the product.
Taking the product with food alleviated these problems in some women.
Figure Plus is an herbal supplement and does not produce stand alone results.
"Stand alone" meaning that the product must continue to be taken indefinitely in order
to maintain the results that are acquired. This is good for most women, however,
because of the Ascorbic Acid content. Figure Plus is not effective on men or
transsexuals, even those currently taking hormone therapy.
The Competition
Similar products within the market include Perfect Woman, All Natural Curves,
Grobust, and Erdic. Perfect Woman and All Natural Curves are a breast enhancementcombo pack that offers a cream along with an oral product. Grobust and Erdic are oral
tablets. All of these products are offered to the public at 2-5 times the retail price that
Figure Plus is. This is because a large amount of production cost goes into purchasing
urmecessary herbs to put in their product. This is referred to as an "herbal cocktail"
12
above. None of the websites that these products are being offered on provide or have a
link to free information about breast augmentation surgery. Perfect Woman and All
Natural Curves offer a money back guarantee while Grobust and Erdic do not. Products
like ointments and creams will be sold in conjunction with Figure Plus in the future.
Place of Purchase
Presently all sales are made over the Intemet. This is currenfly the most feasible
avenue due to the infancy and lack of financing for the company. Two auction listings
in the herbal supplement category of E-bay supply the majority of Figure Plus sales.
The website that will be complete in January will surpass the auctions shortly there
after. In the future, AugmenationAtlematives.com will be expanding to the "brick and
mortar" sector and to intemational markets.
Currently Figure Plus is sold in a small locally owned boutique in Lubbock, TX,
Silhouettes. They currently purchase 1 case, or 12 bottles, of Figure Plus a quarter.
Plans are being made to place the product in 20 more retail outlets in the next ten years.
Negotiations are presently in the works for completing an exclusive contract for
an independent distributor of Figure Plus in the nation of Iran. These negotiations will
be complete and the contract will be finalized by January 2001. Two additional
intemational markets will be pursued within the next ten years.
13
CHAPTER V
MARKET ANALYSIS
This chapter in the business plan deals with the market analysis. The market
analysis should consist of three different sub-topics. The first sub-topic is the industry
overview. In this section the herbal supplement industry should be described. The
growth rate of the industry should be given here. The business opportunity that herbal
supplements provide and its projected continuation needs to be listed. The next subtopic is a detailed description of the target market. Here the demographics of ecompany's customer base should be given. The last sub-topic should deal with the risks
of operating within the herbal supplement industry.
Industrv Overview
The Herbal Supplement industry is a large, growing market in the United States
today; in 1998 it pegged out at $10 billion. Only 0.5% of thosefransactionswere made
on the Intemet in 1998 (American Demographics, 1998). Intemet retailing is growing at
an exponential rate across the world, however (Emst & Young, 2000). Half of the
consumers online have joined the online shoppers (Trepper, 2000). By the year 2002
33% of the goods purchased by Americans will be purchased online (Trepper, 2000).
Online purchases are not only increasing in America but worldwide. Countries like
Italy will double their purchases online in two years and countries like the United
Kingdom, Canada, Australia, and France will triple their online purchases in two years
(Trepper, 2000). With the growing number of Intemet purchases, the herbal
14
supplement market is expected to grow exponentially. One of the reasons for the
growth of this already large market is the expansion of new herbal alternatives and
remedies. Herbal Breast Enhancement is among the fastest growing of all the new
natural remedies.
The Herbal Breast Enhancement industry is in its infancy stage. With the first
product emerging less than five years ago, the market is wide open and ready to be
taken. There is yet to be a company or a product to emerge as a leader in this brand
new industry.
The products that are available are being sold on three different types of media.
There are advertisements emerging in magazine ads. These ads are placed in magazines
targeted to women. They are often featured on a one half to a full-page ad displaying a
short description of the product and a toll free number to call to order. Ads on
television are also emerging in selected areas. Figure Plus is manufactured in the
Houston area by Pharm-Med Inc. Pharm-Med runs a small, low-budget ad on cable
television in this area with limited success. The majority of Herbal Breast Enhancement
advertising and marketing is done on the Intemet. The products are offered on retail
websites, which operate on an impulse purchase. All of these sites are owned and
operated by an independent distributor or marketer of the product that they are selling.
There are no known sites that incorporate free information on breast augmentation into
their web page. This will be an advantage and incentive to view AugmentationAlternatives.com.
15
Target Market
AugmentationAltematives.com's target customer will be a female Intemet user
between the ages of 18-50 years old. This woman is will be seeking out information
regarding methods to increasing her bust-line. This woman is conscious to the dangers
of surgery and is open to altematives. This woman is also interested in altemative
medicines and herbal remedies.
The target market of AugmentationAltematives.com's customer base has a small
amount of discretionary income. They are familiar with the Intemet and how to
purchase products on retail websites. They are concemed with their appearance but not
willing to risk the dangers of surgery to improve it.
Market Risks
AugmentationAltematives.com mns the risk of being overmn by companies that
already have a foothold in the market. Other companies have been mass marketing and
growing their customer base. The company also could have a problem with the efficacy
of the product. Research shows that the product works on 80% of the women who use
it. This means that potential 20% of all customers who purchase the product will want
to use the 100% money back guarantee.
16
CHAPTER VI
MARKTflslG PLAN
This is the most important chapter in terms of a creating a successful plan. In
this chapter, the marketing research, goals and message, and programs are listed. The
marketing research section should explain what test market was done on the product. It
should tell about the results of the test as well. The marketing goals and message
section state the message that is to be received by the marketing plan. The last section
of the chapter, marketing programs, explains how things like price and advertising will
be used.
The company intends to adopt an aggressive marketing plan that will both
increase traffic to the website and promote awareness of altematives to breast
augmentation surgery. This will be modeled after the highly successful plan of Corey
Rudl. Coery Rudl's marketing plan has proven to be successful by making his e-book.
Car Secrets Revealed a best seller on the Intemet. By modeling this plan, banner ads
will be placed on related, high traffic, websites, and listed on a variety of newsletters
and e-zines. The web address will be placed in numerous Intemet Classifieds.
Promotions will be ran through online providers like AOL and Hotmail. E-Bay
auctions will be used to increase sales and website traffic. Newsgroups or UseNet will
be used as well.
17
Marketing Research
Test markets were provided through the sale of Figure Plus on E-Bay auctions.
These tests proved the efficacy of the product; there were only 2 refunds provided out
of a customer base of over 300. They also revealed that the product sold best in an
altemative medicine category; the wedding related category sales were next. This
information is will be used in determining advertisement placement.
Marketing Goals and Message
The following are the marketing goals for AugmentationAltematives.com to be
accomplished in the first year of operation.
•
Create an awareness of the existence ofAugmentationAtlematives.com and its
products within the female Intemet community
•
Educate the public of the risks involved with breast augmentation surgery by having
the free FDA pamphlet downloaded off the webstie by over 1000 people.
•
Make safe, natural, altematives to the breast augmentation surgery known to women
in the Intemet community.
The marketing message will be that there are safe, natural, affordable, and effective
altematives to breast augmentation surgery. This company plans to be the leader in
providing such high quality altematives.
18
Marketing Programs
Pricing
The price of Figure Plus will match the lowest price available at $19.95 for 100
herbal breast enhancement capsules. This price can be offered without sacrificing
quality due to the streamlining of the herbal ingredients in Figure Plus. This price will
provide a 57%» or $11.45 profit from every sale. The profit margin will increase as the
cumulafive number of bottles purchased increases. After 1000 bottles have been sold
the wholesale purchase price will lower by $1 per bottle increasing the margin to 62%
or $12.45 per bottle.
Customer Service
Because of the profit potential found in retained customers and the
competition's lack of customer service, AugmentationAltematives.com will put great
priority in providing excellent customer service. This will be offered through a toll free
customer service hotline. This hotline will be a place to voice concems and find
answers to transaction problems. Refunds will be mailed promptly and taken care of
with a "no questions asked" attitude in order to create and maintain a good reputation.
Because of the sensitivity of the breast enhancement issue, customer confidentiality will
be maintained at all times. This includes shipment of the product in discrete packaging.
19
Advertising
Advertising will start with the copy on the website. The copy will be both
persuasive and informative. It will include testimonials from customers who have had
success with Figure Plus in order to develop rapport with our target audience.
Highlights will be placed in bold to bring attention and reinforce what the product will
do for the customer. The length will be as short as possible to prevent the potential
customer from losing interest. The information will be clear, concise, effective, and
most importantly, error free. The overall message will be to provide a solution to
achieving breast enhancement without the dangers or cost.
Banners will be posted on high traffic websites that are of interest to the
company's target market. Banners will be designed by Dennis Humble following the
Corey Rudl model, which has been proven to have a 5% click through rate. E-zines and
newsletters will be used to reach the target market instead of the traditional method of
bulk e-mail. Bulk e-mail will be avoided as it is looked upon negatively and will harm
the company's reputation. Intemet Classifieds will be used as an affordable means of
reaching large numbers of Intemet users. These will be placed on strategic locations
where the target market will traffic. Promotions will be placed on the shells of AOL
and MSN's mail server Hotmail. Such advertisements have a high viewing rate and
provide a direct link to AugmentationAltemtives.com. This again is an effective
altemative to the much disliked bulk mail.
20
Sales Strategy
The sale of all products through AugmentationAltematives.com will be done
with the customer in mind first. The company will be empathetic to all the needs of the
customer. This includes needs that will not necessarily result in short term profit for the
company. The attitude of "service first will equal profits later" will be dominant in all
employees.
21
CHAPTER VII
MANAGEMENT
The management chapter of an e-commerce business plan is short. This is due
to the small amount of personnel. More often than not one person can operate a small,
lucrative e-commerce company. This chapter should include the company personnel
and its projected expansion. It should also contain the compensation plan of the
personnel.
Management and Organization
The company personnel will consist of the head of the company, who will be
responsible for all company functions. These include administrative tasks like
answering the phone, responding to e-mail, re-listing auctions, filling and shipping
orders, and record keeping, along with e-Marketing functions, such as link research,
banner, newsletter, and e-zine listing, search engine submission, and webmaster.
Company Personnel
To start there will be only one employee ofAugmentationAltematives.com.
This person will operate all functions of the business with no salary unfil all short-term
goals have been met.
After the short-term goals have been met, the services of a fulfillment house will
be sought. It will be used to take incoming orders from both the telephone and the
website and to ship the product to the customer.
In the long-run a customer service panel of 5 part-time telemarketers will be
hired within the first five years of operation. This panel will be used to take incoming
telephone orders and deal with customer service issues that will arise.
Compensation
There will be no salary given until all short-term goals are met. All profits will
be used to achieve the short-term goals listed in Chapter III.
The fulfillment house will be paid on a commission basis. They will receive a
5% commission for all orders processed through the telephone. They will be paid a flat
fee of $3 per bottle that is shopped from website orders. This is the commensurate
compensation for such services in the continental US.
Telemarketing personnel salaries will depend on the previous experience of the
candidate.
23
CHAPTER VIII
OPERATIONS
The operations portion of the business plan is the last to be discussed. In this
chapter every detail of operation, from the purchase of the product from the
manufacture to the shipment of the product to the customer is mapped out. This secfion
demonstrates a clear, efficient, and logical method to completing a transaction.
At AugmentationAtlematives.com a customer will purchase the product at one
of two locations, 1) the website or 2) an E-Bay auction. The current product to be sold.
Figure Plus, will be purchased and supplied directly from the manufacture Pharm-Med
Inc. based in Houston Texas. Products added in the future will be supplied by a reliable
manufacture offering the highest quality product at the lowest price. All products will
be purchased by an American Express Blue card, which will be paid in full every
month.
The customer will pay for the product by money order, check, or credit card. All
orders will be shipped within 48 hours of payment. Money Orders and checks will be
received by mail. Credit card orders will be fulfilled by either a secure online
transaction or by a paypal transfer. All products will come with a 120-day money back
guarantee. A full refund, minus shipping and handling, will be given to any customer
who is not safisfied with the results produced after 120 days of use. This guarantee has
been implemented to counteract the time it takes for results to be seen.
24
Supply, Sale, Shipping
Figure Plus will be supplied by its manufacture Parm-Med Inc. An inventory of
100 bottles will be kept on hand at all times to meet the requirements of e-bay
auctioning. Once fulfillment service is added the inventory will increase.
A potential customer will be exposed to the products on either an auction or the
website. If a customer visits the aucfion, she will read the advertisement then, either
visit the FAQ page of the website or write an email to the company with her questions.
All frequently asked quesfions are outlined on a page of the website. If the FAQ page
satisfies the customers' inquiries then they will be given the option to purchase the
product there. If the customer is not satisfied with this page she is urged to write the
company through a link for e-mail composition or to call the toll free number to the
office for further assistance. An employee will assist the customer by writing a custom
response to the electronic mail or by personal conversation over the phone. If the
customer has called the office then a close will be made on the sale once the question
has been answered. If the customer has made contact via elecfronic mail then she v^ll
retum to the auction to place a bid or to the website for the purchase through a link
provided in the signature of the e-mail response.
The website will contain a secure order form for an instant credit card purchase.
This order form v^ll be used for all orders placed through the website and over the
phone.
For auction orders the transaction will take up to eleven days to complete. On
the auction the customer is given the option to bid on a quantity of bottles less than one
25
hundred. After the auction ends, an end-auction email is automatically sent to the
customer explaining the amount owed and payment protocol.
After a payment is received by one of the two transaction types, the customer is
notified and the shipping process begins. Orders of six bottles or less will be packaged
in a large video priority-mail box. Orders lager than this will be packaged in a plain
brown box to with a size to accommodate the order. The priority mail box has been
chosen for its size and discreteness. This box holds up to a three-month supply of
product. The outside of the box does not indicate in any way the contents of the box.
All orders will be packaged with an instmction letter and a brochure. The instmction
letter congratulates the customer on their purchase, explains, in detail, how the product
should be taken, and gives instmction on how to reorder. The brochure provides more
information about the product and serves as an advertisement for referrals.
The priority mail postage will be purchased via stamp.com. Stamps.com
provides a service that allows postage to be printed by a personal computer printer and
keeps a database of customers and their addresses. All postage purchases will be
debited directly from the business bank account.
The final packaged product will be left on the front porch to be picked up by the
USPS mail-person on the following day. All products will arrive at the customer's
home no more than four business days from the day payment was received.
Customers will be notified automatically via e-mail by an autoresponder when it
is time for them to reorder. This email will contain a link to the order form on the
website and promotional material on a back-end product.
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Customers who are not satisfied with the product will call the toll free number or
wnte an e-mail to the company. The unsatisfied customer will promptly be sent a
refund check via priority mail.
Inventory Management
The company will maintain an inventory of 100 bottles of Figure Plus. The
auction advertisement ran for Figure Plus states that there are 100 bottles for sale. EBay policy states that all the items listed in the auction must be on hand at the time that
the auction is ran. The Inventory will increase with the addition of fulfillment house
services to match the increasing demand.
Research and Development
The Company will continuously be adding new and improved products to it
website in order to maintain the best of reputations. These will be found in herbal
remedy and women's magazines, FDA publications, and women related websites.
Technology and Communications
AugmentationAltematives.com will operate with state-of-the-art computer
systems and hosting services. In the beginning the Company will operate from an IBM
compatible personal computer with a 500mHz processor chip, 56kps modem, 64 mg
RAM, and 10 GB of hard drive space. The computer will be used to access email,
update the website, list auctions, and conduct market research. All bookkeeping and
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inventory records will be kept on the computer hard drive and backed up onfloppydisk
until a zip drive is added to the hardware. Because of the rapidly expanding technology
a computer upgrade will be required every two years. Interland will be used as the
hosting service and Intemet service provider. They offer an affordable hosting package
complete with e-mail service and autoresponders. They also provide a search engine
submission service with a money back guarantee.
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CHAPTER IX
CONCLUSION
As e-commerce grows, the herbal supplement industry will surely grow with it.
Companies need to create and develop a plan that will give them the organization
needed to keep up with the growing Intemet. AugmentationAtlematives.com has
developed an e-business plan utilizing three distinct areas of study that will prove to be
successful. Business was used to define the business itself, create a marketing plan that
will target a specific market, and implementing management and operations. Natural
sciences were integrated in order to describe and understand the herbal supplement
being sold. Behavioral sciences were used to cater to the target market, develop a
company vision, and deal with personnel issues. A company that follows the plan of
AugmentationAltematives.com and implements the use of these three schools of
thought in creating their business plan will have a map to success.
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