OUR BUSINESS MODEL
Business Overview
At Sub Zero, our business model is predicated on a five-year foray into the US winter sports market. With an annual Amazon Selling Plan, our company plans to sell our product direct to consumers for the first five years. Beyond this, we look to target outdoor retailers but found this too speculative to integrate into our working business plan. We plan to work out of the Greater Denver Metro Area and sell within the United States.
COST AND REVENUE PROJECTIONS
Sell Cost: $55.21
Production Cost (Per Unit): $22.05
Profit Margin: 60%
Assumptions: 0.005% Market Penetration, Doubling Every Year, Wages Introduction 3rd Year, 5% Price Increase and 10% Cost Decrease Per Year
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PROFIT PROJECTION
This model shows our growth projection past the initial year. Due to breaking even in the initial year, we only modeled from years one to five. The model also represents the dip in year four due to the introduction of wages, starting at $15/person.
BREAKEVEN
The breakeven projection shows the intersection of our production cost and profit from selling. The graph intersects at a unit value of 747 and $24,710, allowing us to breakeven within the first year.
OUR MARKET
These values represent the US, winter outdoors gear market. The growth rate is an average over the last 10 years, although recent trends have been even more promising.
KEY COMPETITION
While no patents have been filed for similar products, there are some products that share some level of similarity to our product. Specifically, companies such as CamelBak, Nalgene, and Platypus have similarly sized water bladders with an average cost of $35. Our separation from this competition comes from our unique snow melting feature which is not present in any of the competitions. In addition, products such as LifeStraw provide clean water if a water source is available, but prove useless in frozen conditions.