Introduction

A market exists within the advertising specialty industry for velour and leatherette drawstring bags, eyeglass bags, jewelry bags & pen bags to hold various promotional products to increase their perceived value. Elsewares Promotional Products & Packaging has been established to supply these logo-imprinted items to advertising specialty distributors. These products are then sold to the end user.

The products

Elsewares is developing a collection of unique products, as well as drawstring packaging products, that will increase the perceived value of these products. These products will be imported from Mexico and Far East. Before they reach distributors, they will be printed in-house with different company logos.

By joining the Advertising Specialties Institute trade association, Elsewares will have print and electronic access to a network of 13,000 to 14,000 ASI-listed advertising specialty distributors, part of a $7 billion a year industry. In terms of advertising dollars, this is only behind newsprint and TV. Elsewares won’t sell directly to end-users but will exclusively market their products through these distributors. Elsewares aims to reach distributors by placing advertisements in trade publications and using an in-house marketing team and a network with salaried, commission-based sales representatives.

Concurrent with our campaign to market these packaging products, we will showcase our line of unique promotional products to the same distributors, thus giving ourselves three sales opportunities: the sale of the promotional product by itself; the sale of some packaging products that the distributor can use with promotional items that are purchased from other suppliers; and the sale of our promotional product coupled with our packaging.

The Market

For the past ten years, sales in the advertising specialty industry have grown at almost 7% per année and reached $7 billion in sales last fiscal year. This is an established industry with many suppliers and distributors. The combined sales of the three suppliers selling only velour- and leatherette drawstring bags was $2,500,000. These three suppliers are located on East Coast, while the Midwest and West Coast are the largest distributors of advertising specialty products in the industry. We believe that by focusing our marketing efforts on the West Coast distributors (many of whom already have positive business relationships with our personnel), we will be able to capture a substantial market share in the packaging niche over three years.

Considerations for Financial Planning

Part of our initial startup expenses will be used for inventory, office equipment and imprinting machines. The remainder will go towards catalog costs and advertising expenses. In the first twelve months of operation, we anticipate that there will be an additional financial commitment for financing receivables or payroll expenses.

Elsewares plans to focus its sales force in the west United States to achieve a respectable sales level before the end of the year 2. We should reach a monthly break-even with our monthly fixed costs estimate and expected monthly unit sales.

Elsewares is seeking a financial package based on a note due in five years, but amortized over 15 years. The founder will personally guarantee this note. The company will have the opportunity to build a solid track record that will allow it to secure alternative financing. It should be noted that the owners of Elsewares do not intend to take any profits out of the business until the long-term debt has been satisfied. Any profits that remain after paying the debts will be used to finance future growth, principally through the acquisition and sale of inventory.

1.1 Objectives

Presently, the three leading suppliers of imprinted pouches to advertising specialty distributors are located on the East Coast and are doing a combined $2,500,000 solely in the sales of pouches. Elsewares plans to focus its sales force in the west United States to achieve a respectable level of sales by the end year 2. Elsewares wants to factor our growth and diversify into unique promotional product offerings. These products will be attractive as advertising specialty items or packaged with a drawstring pouch. We can also provide these.

1.2 Mission

Elsewares will develop a product line that includes unique products as well as drawstring packaging products. This will add value to the products. These products, which will come from Mexico, the Far East and other countries, will be printed in-house using various company logos before being shipped to distributors.

Elsewares joins the Advertising Specialties Institute trade association to gain print and electronic access. Elsewares is part of $7 billion-a-year industry, with 13,000 to 14,000 ASI listed advertising specialty distributors. This is second only to newsprint and television in terms of advertising dollars. Elsewares only markets their products through distributors. End users will not be sold directly by them. Elsewares plans to reach these distributors through advertising in trade publications, an in-house selling force, and a network if salaried and commission-based reps.

1.3 Keys To Success

Management at Elsewares believe that they have the right products with the right people to build a loyal customer base. Our business philosophy is what will make us successful. The advertising specialty industry expects products to arrive on time with high quality imprinting. These are the demands of the advertising industry.

Elsewares will fulfill this demand by maintaining adequate inventory levels and delivering on time, according to pre-arranged delivery schedules.

Elsewares has established a quality management system for monitoring the on-site imprinting facilities to ensure acceptable imprint quality.

Elsewares, in addition to offering a complete line velour packaging materials, will also offer a unique range of promotional products. This will encourage advertising specialist distributors to think of Elsewares when searching for original products.