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Rafes Institution (Junior College) One Rafes Institution Lane Singapore 575954 T (65) 6419 9888 F (65) 6419 9898 rjc@moe.edu.sg www.rjc.edu.sg
ABSTRACT
The Idea
We live in a world that constantly seeks individual expression and customization. To ll this need, we see (shoe), accurately read as Shoe Brackets, coming in as a largely untapped wearable footwear accessory. We see a need for this product as consumers do not only want to see new shoes being designed, but also trendy shoe accessories that will dene their footwear and ultimately their personality. With our shoe accessories, consumers will also be able to customize their own shoes and they can choose to look different each time they wear their shoe. We uphold a rm philosophy of providing our customers with a voice in what they wear; we believe fashion should be self-determined and a reection of ones creativity and personality. Thus, (shoe)TM accessories are largely kept as consumer-directed products. A signicant portion of the accessories that eventually end up on the shelves are produced in accordance to the designs that the customers have voted for. Shoe brackets and accessories will thus become an avenue in expressing community creativity, and our consumers will be empowered to be the ultimate designers of their perfect outts, down to the accessories of their shoes. Tapping into the consumers ideas and innovation opens us up to a whole range of possibilities, and (shoe)TM hopes to progress towards a greater cause that our accessories can also give our consumers an opportunity to advocate or demonstrate their support for social causes. This will also form part of our CSR practices, launched after our rm reaches SME status.
Table of Contents
Product Information
Overview
Products Breakdown
(shoe) Platforms
Customization and Personalization
(shoe) Accessories
5 5 6 6 6 7 8 8 8 8 10 10 10 10 10 10 10 10 11 11 11 11 11
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Market Research
CUSTOMER PROFILING
Male Youths (Aged 14 - 25)
Female Youths (Aged 15-34)
Environmental Analysis
Internal Analysis
Strengths
Advantageous Access to Key Distribution Channels
Low Startup Cost
High Prot Margin
Transferability
Timelessness
Weaknesses
Lack of Patent Protection
Constant Innovation and Market Research Required
Limited Initial Manufacturing Capacity
Low Customer Awareness
External Analysis Opportunities Strategic Alliances with Up-market Brands Increasing Purchasing Power of Target Consumer Groups Ease of Expansion of Target Consumer Group Novelty - First Movers Advantage Threats Economic Downturn Surge of New Entrants and Competitors Shift in Consumers Tastes From Firms Products Strategies Developed - SWOT Matrix Strength-Opportunity Strategies Weakness-Opportunity Strategies Strength-Threat Strategies Weakness-Threat Strategies
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Marketing Strategies
Price Breakdown
Pricing of Products and Sales Breakdown
Unique Selling Points (USPs)
Consumer-directed products
Novelty (First Movers Advantage)
Marketing Strategies
Online Marketing
Telemarketing
Catalogue Marketing
Maximize Outreach
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Sustainability Plan
Timeframe
Year 1
Year 3
Measurable Key Performance Indicators (KPIs)
Consumer Written and Verbal Feedback
Market Survey
Quantitative Reviews of Sales Volume
Risk Assessment
Commercial Viability
Overview
Market Survey Statistics
Product Viability
Product Potential
Price Range
Financials: Statement of Forecasted Cash Flows
Product Information
Overview
(shoe), accurately read as Shoe Brackets, is a footwear accessory. It is an innovative product intended for initial launch in the youth market. Given current market trends that suggest a growing desire to customize ones apparel, we have identied shoes as a largely untapped wearable that we can customize. (shoe) is adjustable. (shoe) is removable. (shoe) is customizable. The (shoe) platform will allow limitless creativity to ow in deciding what accessory to hang from the platform, what colours to use to complement the shoes and what forms of customization are desirable. We see a need for this product as consumers do not only want to see new shoes being designed, but also trendy shoe accessories that will dene their shoe and ultimately their personality. With our shoe accessories, consumers will also be able to customize their own shoes and they can choose to look different each time they wear their shoe.
Products Breakdown
(shoe) Platforms
The (shoe) platform will be a molded structure designed to clip onto ones shoes: its designed features aimed at complementing the overall shape of the shoe. A range of ofcial accessories could be produced on a quarteryear basis. The framework for such community-designed accessories would include a regular design competition where submission is done through an online platform, much similar to Apparel Sites like.com.
(shoe) Accessories
Our designers will design shoe accessories for both sexes. We will take into account the preferences of each sex and come up with trendy designs that will attract potential customers into buying our products. Through consumers feedback, we will also be able to have a clearer idea of what customers want and hope to see in our new designs. The First Movers Advantage will allow us to establish a market for shoe accessories and we will be able to focus on establishing our brand, build a strong rapport with our customers. Feedback from customers will also be taken into account when we develop new products. Our rst movers advantage, solid marketing plans and product differentiation will ensure that our business plan will be a success. Range of Shoe Accessories Mens Shoe Accessories Theme Metallic: Recently the fad among teenage males is to wear lots of metal accessories, as it portrays a punk outlook and a sense of identity. As such, one of our products will include shoe chains that can be attached to the brackets. Unisex Functionality Theme Womens Shoe Accessories Theme
For consumers 3D Paste-On: Jewellery: Through market rewho go for practi- Cartoon charac- search we found out that many pairs cality rather than ters, symbols and of women shoes are designed with design, our icons can be made accessories that are permanently product range will into accessories attached to it. However our accesoffer shoe acces- and be attached to sories for womens shoes will include sories such as a the shoe. a greater array of jewellery beads, Distance Tracker, Consumers can shoe straps. where joggers can also change the keep track of the type of Paste-On distance and time they want anytime. they have ran, as As customers will well as minihave an array of (shoe)TM designs to choose pockets to keep from and given the money, house or exibility of such a car keys, etc. product, customer satisfaction can be guaranteed.
Market Research
CUSTOMER PROFILING
In our project, we have identied two main groups of customers whose needs we will be catering to.
By marketing our products as must-haves, our target customers - youths and women will be compelled to buy our products. The transferability and eye-catching designs of our products serve to appeal to the spending nature of our customers and the innovative aspect of using our products in any way customers want makes our products all the more attractive and popular. Expanding our business to sell our (shoe) platforms and accessories overseas is highly plausible due to the aforementioned reasons and also because converse shoes are in high demand everywhere and heels are a must for almost every working woman.
Environmental Analysis
Internal Analysis Strengths
Transferability
Since Converse shoes are largely similar in shape and the features of heels are generally similar (straps at the side and occasionally in the front), (shoe)TM accessories can be transferred between shoes, or mixed and matched. This allows consumers space for creativity, which increases the appeal of our products for a Do-itYourself generation like our target consumer group.
Timelessness
Converse shoes have stood the test of time, while heels is likely to stay as a necessity for women. The timelessness of footwear ensures a long market life span and sustainable demand for (shoe)TM accessories.
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Weaknesses
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Threats
Economic Downturn
The recent and still ongoing economic recession may turn customers away from purchasing (shoe)TM accessories due to their increased consciousness of their expenditure and of the need to decrease their spending. The promotional price our rm is launching in the rst quarter will thus hope to attract potential customers and minimise the impact of the economic recession.
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Strength-Opportunity Strategies
One key strategy that our rm will employ is to capitalise on the increasing purchasing power of our target consumer groups and the First Movers Advantage as the novel nature and advantageous position of our product renders it possible for us to enjoy a high prot margin. The transferability of (shoe)TM accessories between shoes and different sizes of shoes also boosts the ability of our rm expanding to include new consumer groups, with children being of greatest likelihood. By positioning our product as transferable and sharable between children and adults, the expansion of our rm will bring in reasonably larger amounts of revenue year-on-year.
Weakness-Opportunity Strategies
To pursue the opportunities ahead of our company, the weaknesses of our product will have to be played down. Thus, a strong and widespread marketing campaign will be introduced since the day of our product launch, in order to capture the maximum amount of attention for (shoe)TM accessories and disallowing awareness to hinder our sales. In addition, when the sales for our products have stabilised and there is enough capital, we will register patents for the products, giving the rm greater negotiation power in tying up with more up-market brands.
Strength-Threat Strategies
Though (shoe)TM accessories are fashion items which can easily uctuate in demand, the timelessness of its complementary good (i.e. Converse shoes and heels) guarantees the sustainability of the demand of our products. Furthermore, the advantageous access to Converse by positioning our products with theirs will reduce the probability of consumers switching to other products.
Weakness-Threat Strategies
A defensive plan will be implemented to prevent the rm's weaknesses from furthering the potential impact of external threats. This plan will include a strategic and careful introduction of different varieties of products to consistently keep our customers interested in our products instead of switching to our rivals products, as well as to invest in Research and Development and a patent as soon as it is viable to retain customers and maintain our competitive advantage.
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Marketing Strategies
Price Breakdown
Shoe platform - S$9.60/piece for Year 1, 1st Quarter; S$12.00/piece for Year 1, 2nd Quarter onwards Shoe accessories - S$9.60/piece for Year 1, 1st Quarter; S$12.00/piece for Year 1, 2nd Quarter onwards
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keep consumers coming and will be sustainable since our products are consumer-directed, and new designs and products are being churned out by the consumers themselves at a consistent rate periodically.
Marketing Strategies
Our company will adopt integrated direct marketing, which involves using carefully coordinated multi-stage campaigns. The different forms that we will be employing include: I. II. III. Online Marketing Telemarketing Catalogue Marketing
Online Marketing
This form of marketing could be done in partnership with the shoe retailers that our company is liaising with (that is, we put up our advertisements on their websites), or we could set up a website of our own. Public awareness of our website will be spread via existing communication networks such as Facebook, Friendster, blogs and email. Besides the usual product information and details, we will also include a unique feature on our websitewhich is an online competition for accessory designs. This is not only our unique selling point, but also serves as an effective mode of marketing at the same time. The incentives of winning the competition will aid us in increasing public awareness of our product as people will be motivated to get their friends together and come up with a winning design. Afliate programs can also be used, which allows us to take advantage of the speed and extent at which our marketing message can be dispersed to people across the globe or country. It also allows our company to track and analyse the effectiveness of our online marketing campaigns and allow us to make changes where necessary. Our company will employ online marketing as its focus in Year 1. This is due to its cheap cost, its speed and its viral characteristics, which aid us in increasing public awareness of our product as much and as fast as possible, on top of the advantage of requiring minimal resources or capital.
Telemarketing
Telemarketing now accounts for more than 39% of all direct-marketing media expenditures and 35% of directmarketing sales. As such, telemarketing is an extremely powerful marketing tool which will help us to understand the wants and needs of our corporate customers. As telemarketing is cost-prohibitive, especially for our company which starts out as a small-scale company, we will only adopt telemarketing in Year 2 onwards. That is when we will have sufcient capital to nance and sustain telemarketing efforts for the consecutive years. If our nances are able to support it, we could even incorporate celebrity branding for our products. The telemarketing could be initiated in co-operation with the shoe retailers that our company is liaising with (that is, we advertise our shoe accessories along with their shoes in one advertisement). Alternatively, our company could launch our own advertisement when we set up our own specialty store.
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Catalogue Marketing
We will include all the necessary information about our shoe accessories in an online catalogue. This information includes illustrations, detailed descriptions, miscellaneous information such as the range of colors offered and the price. If customers should request, we will send them a copy of the catalogue. Otherwise, the existence of the catalogue will be advertised via our other methods of marketing. We could again partner up with the shoe retailers that we are selling our accessories in collaboration with to create a combined catalogue, which will go towards boosting our relationship with the retailers. A hard copy of the catalogue, which will be printed on recycled paper as part of our environmental efforts, could be created in Year 2 onwards, where our prot greatly increases and we have more funds to channel towards advertising. This catalogue will be given out to our targeted consumer groups from the public, by channels such as mailboxes, rms, and schools. Our reasons for adopting these 3 types of marketing are as follows:
Maximize Outreach
Almost anyone gets in touch with the media. For those who are not so technologically-savvy or used to watching television or using the internet, the catalogues will nd their way into these peoples lives through their mails.
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Sustainability Plan
Timeframe
As a small startup company, we recognize the need to maintain` public interest and market demand over a prelonged. The following timeline denotes the future prospects for our company over the next 5 years. 5 Years
Year 1
1st half of Year 1: Launch full-edged marketing itiative and focus on viral marketing to ensure maximum outreach. We will also be coming up with new shoe accessories over the rst 6 months, while testing out the consumers response and feedback to our shoe accessories. 2nd half of Year 1: Continue to get feedback from consumers on how our shoe accessories can be improved to meet their preference. Through their feedback we will be able to adjust our pricing strategies and improve on our designs should there be a need to.
Year 2
1st half of Year 2: Now that we broke even and have reached out to a large audience, we will be on the lookout for imitations of our product. While doing so, we will continue to develop shoe accessories and improve on our marketing efforts. Additionally, we will outsource our product to include Nike shoes. 2nd half of Year 2: Expand to include different brands of footwear. At the same time, we will also be researching and developing different accessories for different types of footwear. After which, we will test the market response to our new products and make any necessary changes.
Year 3
1st half of Year 3: Launch our new products and work on intense marketing for our new and existing products. Through the launch of our new products, we will be able to review existing products and improve on our company, marketing, product and marketing structures. We will also begin to offer loyalty benets to our customers. 2nd half of Year 3: We will set up an ofce and open our own shoe accessories shop. Now that we operate on our own, we will have to step up on our marketing strategies.
Year 4
1st half of Year 4: Constantly review feedback from the consumers, review existing products and come up with more designs and accessories. 2nd half of Year 4: Set up branch stores all over Singapore.
Year 5
1st half of Year 5: Set up branch stores in Malaysia or Inter-national markets 2nd half of Year 5: Explore other viable options for expansion
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Market Survey
A market survey will enable us to nd out the different types of shoe accessories that may be present in the market and different fashion trends. Through this we will be able to nd out more about current fashion trends and develop appropriate accessories that will meet the preferences of a large group of consumers.
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Risk Assessment
The Risk Assessment was carried out with a systematic thought process, encompassing an evaluation of our rms response to the scenario of a) Existing Market, Existing Product, b) Existing Market, New Product, c) New Market, Existing Product and d) New Market, New Product.
The risks that the rm takes in pursuing growth opportunities involve a number of factors that would evaluated through a Cost-Benet Analysis. A key strength of our venture would lie in its advantageous access to key distribution channels, thereby bolstering condence in expansion efforts beyond the existing market and the existing product.
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Commercial Viability
Overview
The commercial viability of our rm is demonstrated in the following sections: our market survey and the processed statistics of our survey results, as well as our projected income for the rst 5 years of our rm.
Figure 1. Graph representing number of pairs of converse shoes owned by male youths aged 14-25
Figure 2 projects the popuarity of heels with our second target consumer group - women. Out of the 339 surveyed, all owned at least 1 pair and the average woman 4 pairs of heels. The average number of pairs owned by women in each age group increases down the age group. This increase is accompanied by the rise in purchasing power of the women who are older. Hence, the viability of our products, which complement heels, is justied as the consumer base includes all women and there is a larger need for our products as womens purchasing power increases.
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Figure 2. Graph representing number of pairs of heels owned by women aged 15-34
Product Potential
Figure 3 represents the number of male youths willing to purchase our products. 79.3% of male youths surveyed indicated interest and willingness to purchase our products while only 12.4% indicated disinterest. The remaining 8.4% of male youths were unsure as to whether or not to purchase our products if given the choice. Hence, there is huge potential in the sale of our products to male youths. With the employment of marketing strategies, we believe that those unsure of or disinterested in our products would nd our products appealing and attractive.
Figure 3. Graph representing number of male youths willing to purchase our products (%) GIIS - TIE Competition 2009 22
Figure 4 represents the number of women willing to purchase our products. 86.1% of women surveyed indicated interest and willingness to purchase our products while only 3.8% indicated disinterest. The remaining 10.0% of women were unsure as to whether or not to purchase our products if given the choice. Hence, there is huge potential in the sale of our products to women. With the employment of marketing strategies, we believe that those unsure of or disinterested in our products would nd our products appealing and attractive.
Figure 4. Graph representing number of women willing to purchase our products (%)
Price Range
Figure 5 represents the preferred price range of our products by male youths. As expected, many youths (85.7%) found the lowest given price range of $8-$10 preferable. This is compared to 78.1% for $11-$13 and 56.1% for $14-$16. With the percentage of youths indicating preferable decreasing at an increasing rate as price increases beeyond $13, a price range of $11-$13 would be best for prot maximisation on our part, while ensuring that our customers will largely not be deterred by the high prices of our products.
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Figure 5. Graph representing preferred price range of products for male youths
Figure 6 represents the preferred price range of our products by women. 89.7% of women found the lowest given price range of $8-$10 preferable. This is compared to 84.9% for $11-$13 and 77.1% for $14-$16. Similarly, with the percentage of women indicating preferable decreasing at an increasing rate as price increases beeyond $13, a price range of $11-$13 would be best for prot maximisation on our part, while ensuring that our customers will largely not be deterred by the high prices of our products.
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51323.80 148494.00 246975.50 325315.00 393738.50 13800.00 14860.00 600.00 2569.00 504.00 2000.00 65.00 375.00 0.00 0.00 1660.00 3504.00 504.00 3000.00 0.00 0.00 90000.00 0.00 13200.00 13200.00
18375.00 108000.00 108000.00 126000.00 126000.00 18000.00 18000.00 16579.80 22130.00 16579.80 22130.00 1 7372.80 4224.00 844.80 4992.00 998.40 514.00 176.00 338.00 6858.80 3400.00 100.00 3300.00 791.00 126.00 2 13632.00 8760.00 1752.00 8280.00 1656.00 740.50 292.00 448.50 12891.50 3450.00 150.00 3300.00 726.00 126.00
121521.50 181001.00 248684.50 110584.57 164710.91 226302.90 3 16320.00 10320.00 2064.00 10080.00 2016.00 890.00 344.00 546.00 15430.00 3470.00 170.00 3300.00 526.00 126.00 4 17088.00 10200.00 2040.00 11160.00 2232.00 944.50 340.00 604.50 16143.50 3480.00 180.00 3300.00 526.00 126.00
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General Marketing and Publicity Company Registration Other Expenses Trademark Registration Salaries for In-house Designers Salaries for Employees Operating Prot / Earnings before Taxes Year 2 Fiscal Term End (SGD) Revenues Shoe platforms 20% revenue sharing to Converse Shoe accessories 20% revenue sharing to partner companies Cost of Goods Sold Shoe platforms Shoe accessories Gross Prot Operating Expenses Shipping/Transport Cost Pushcart Rental Selling, General, and Administrative Expenses Ofcial Site Hosting General Marketing and Publicity Other Expenses Salaries for In-house Designers Salaries for Employees Operating Prot / Earnings before Taxes * Salaries for Employees start Year 2 Year 3 Fiscal Term End (SGD) Revenues Shoe platforms 20% revenue sharing to Converse Shoe accessories 20% revenue sharing to partner companies Cost of Goods Sold Shoe platforms Shoe accessories Gross Prot Operating Expenses Shipping/Transport Cost
600.00 65.00 4875.00 375.00 4500.00 0.00 -2207.20 1 21216.00 13440.00 2688.00 13080.00 2616.00 1156.50 448.00 708.50 20059.50 3530.00 230.00 3300.00 876.00 126.00 750.00 27000.00 4500.00 22500.00 -11346.50 1 56256.00 35280.00 7056.00 35040.00 7008.00 3074.00 1176.00 1898.00 53182.00 3890.00 590.00
600.00 0.00 4500.00 0.00 4500.00 0.00 4215.50 2 33504.00 18720.00 3744.00 23160.00 4632.00 1878.50 624.00 1254.50 31625.50 3650.00 350.00 3300.00 876.00 126.00 750.00 27000.00 4500.00 22500.00 99.50 2 61536.00 36600.00 7320.00 40320.00 8064.00 3404.00 1220.00 2184.00 58132.00 3950.00 650.00
400.00 0.00 4500.00 0.00 4500.00 0.00 6934.00 3 48096.00 26880.00 5376.00 33240.00 6648.00 2696.50 896.00 1800.50 45399.50 3810.00 510.00 3300.00 876.00 126.00 750.00 27000.00 4500.00 22500.00 13713.50 3 67680.00 38160.00 7632.00 46440.00 9288.00 3787.50 1272.00 2515.50 63892.50 4010.00 710.00
400.00 0.00 4500.00 0.00 4500.00 0.00 7637.50 4 54336.00 36120.00 7224.00 31800.00 6360.00 2926.50 1204.00 1722.50 51409.50 3870.00 570.00 3300.00 876.00 126.00 750.00 27000.00 4500.00 22500.00 19663.50 4 76032.00 42480.00 8496.00 52560.00 10512.00 4263.00 1416.00 2847.00 71769.00 4100.00 800.00
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Pushcart Rental Selling, General, and Administrative Expenses Ofcial Site Hosting General Marketing and Publicity Other Expenses Salaries for In-house Designers Salaries for Employees Operating Prot / Earnings before Taxes Year 4 Fiscal Term End (SGD) Revenues Shoe platforms 20% revenue sharing to Converse Shoe accessories 20% revenue sharing to partner companies Cost of Goods Sold Shoe platforms Shoe accessories Gross Prot Operating Expenses Shipping/Transport Cost Pushcart Rental Selling, General, and Administrative Expenses Ofcial Site Hosting General Marketing and Publicity Other Expenses Salaries for In-house Designers Salaries for Employees Operating Prot / Earnings before Taxes Year 5 Fiscal Term End (SGD) Revenues Shoe platforms 20% revenue sharing to Converse Shoe accessories 20% revenue sharing to partner companies Cost of Goods Sold Shoe platforms Shoe accessories Gross Prot Operating Expenses
3300.00 376.00 126.00 250.00 27000.00 4500.00 22500.00 21916.00 1 82080.00 45480.00 9096.00 57120.00 11424.00 4610.00 1516.00 3094.00 77470.00 4160.00 860.00 3300.00 376.00 126.00 250.00 31500.00 9000.00 22500.00 41434.00 1 95616.00 55440.00 11088.00 64080.00 12816.00 5319.00 1848.00 3471.00 90297.00 4300.00
3300.00 376.00 126.00 250.00 27000.00 4500.00 22500.00 26806.00 2 84768.00 46920.00 9384.00 59040.00 11808.00 4762.00 1564.00 3198.00 80006.00 4190.00 890.00 3300.00 376.00 126.00 250.00 31500.00 9000.00 22500.00 43940.00 2 58680.00 11736.00 67320.00 13464.00 5602.50 1956.00 3646.50 95197.50 4350.00
3300.00 376.00 126.00 250.00 27000.00 4500.00 22500.00 32506.50 3 86880.00 48840.00 9768.00 59760.00 11952.00 4865.00 1628.00 3237.00 82015.00 4210.00 910.00 3300.00 376.00 126.00 250.00 31500.00 9000.00 22500.00 45929.00 3 61320.00 12264.00 71520.00 14304.00 5918.00 2044.00 3874.00 4410.00
3300.00 376.00 126.00 250.00 27000.00 4500.00 22500.00 40293.00 4 90912.00 51240.00 10248.00 62400.00 12480.00 5088.00 1708.00 3380.00 85824.00 4250.00 950.00 3300.00 376.00 126.00 250.00 31500.00 9000.00 22500.00 49698.00 4 66480.00 13296.00 76320.00 15264.00 6350.00 2216.00 4134.00 4490.00
100354.00 107890.00
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Shipping/Transport Cost Pushcart Rental Selling, General, and Administrative Expenses Ofcial Site Hosting General Marketing and Publicity Other Expenses Salaries for In-house Designers Salaries for Employees Operating Prot / Earnings before Taxes
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