This is about setting up an online music and book store. Books and music will be sold in hard or digital downloadable versions. Clients will access the store, place orders and make payments online. The project cost is estimated at US$ 7,500 per year with a working Capital of USD 18,956 covering about 2months operational cost. This yields total revenue of US$309,192 for the first year of operation. The business has a payback period of 2 years and a net profit margin of 24%. The Sales of the business grows gradually with the aid of repetitive buyers, referrals and other loyal customers. It is a business that does not need one to be present in any selling points thus you can operate from wherever you are. The investment can be scaled in accordance with the Capital available.
Process Description and system Production Capacity
Online book and music stores are an established and proven business model currently globally dominated by Amazon. The internet has entered many households in Uganda and across the world.
A website is set up with a well programmed data base having encryptions of upgrade of new products in the system. The data base is expected to carry 50,000,000 GB capacity with 200 copies of books and music sold daily which translates into 62,400 copies respectively
Different textbooks are bought and listed on the business sight for different people to view and if interested, they register to buy online
The service charges are then paid by means of credit card facility ie Visa or Master card through an international or global bank such as Barclays.
Capital investment requirements in US$
|Capital Item||Qty||Unit Cost||Amount|
|Furniture & Fittings||300||300|
|Business bank account||200||200|
Production and Operation Costs in US$
|Cost Item||Unit cost||Qty per/day||Pdn Cost/ day||Pdn Cost/ month||Pdn Cost/yr|
|Books (New) Novels||8||40||320||8320||99840|
|Books (Old) Novels||1.61||50||80.5||2093||25116|
|Music Singles and movies||0.12||180||21.6||561.6||6739.2|
|General costs (Overheads)|
|Administrative expenses (Calls, postage, etc)||50||600|
|Total Operating Costs||18,956||228,195|
4) Total monthly days assumed are 26-days.
Production costs assumed 312 days per year
Project Product Costs and Price Structure in US $
|Item||Qty/day||Qty/yr||Unit Cost||Unit price||Total cost/yr||Total Revenue|
|Books (New) Novels||40||12480||8||10||100,565||124,800|
|Text books (New)||20||6240||15||19||94,325||118,560|
|Music Singles and movies||180||56160||0.09||0.2||7,464||11,232|
Profitability Analysis Table
|Profitability Item||Per day||Per month||Per Year|
|Less: Production and Operating Costs||729||18,956||228,195|
There is a ready market of 120m English speaking people in the East African Community area. There is limited access to books across the region. This will be a good business opportunity that will exploit this gap. Orders can be placed and paid for online from any part of the region and fulfilled via post parcels.
Sources of materials
Books can be obtained from publishers such as Penguin. Music can be obtained from Music production and distribution companies such as Sony. Both are available in print hard copy of Digital versions