The Business Plan 187we offer a service that allows each customer transaction to end in the purchase of a truly unique
item.
In the B2B market, a branding industry blossomed in the ’70s, comprising many companies
offering branded polo shirts, t-shirts, sweatshirts, uniforms, ball caps, and golf balls primarily for
corporate clients. These companies typically take a customer’s image or logo and embroider or
print it onto items provided by the corporate customer. Companies that have established rela-
tionships with large corporate clients have been successful using this approach. Some, like
http://www.branders.com, have leveraged the Internet to offer this type of service more quickly and
efficiently than their bricks-and-mortar competitors. These businesses focus on corporate clien-
tele and have essentially ignored the children’s apparel market. Their only participation in the
children’s market is via branded (with a hospital or pharmaceutical company name) caps and
other items provided to newborns as they leave the hospital. These B2B companies deal in large
volumes of products that are limited in customization and therefore in “cuteness” and unique-
ness. Still, their volume-based approach allows them to enjoy favorable economies of scale.
The B2C market, the initial target market for Babyyourway.com, is even more fragmented.
Several home-based operations, local in scope, offer customized embroidering of baby items
like bibs and blankets. These companies do not have the capacity, the sophisticated online pres-
ence, or the resources to emerge as national providers. Babies-R-Us has recently added to its
Web site an area titled “Personalized by Babies-R-Us” that offers the embroidering or stitching
of a child’s name, birth date, etc., on various items. Their approach appears to be to offer as
many products as possible but to offer only a limited amount of content and flexibility in the
ways that customers can personalize their purchases. We are taking a different approach, allow-
ing as much flexibility as possible in the personalization, but initially offering only a limited
variety of physical products. No large competitors were built, as we are, with customization in
mind from the ground up.
Competitive Factors
Bargaining Power of Buyers. The lack of similar competition and the low price points of our
products are in our favor. We estimate that the overwhelming majority of our products will be
priced below $50. Our customers will be price sensitive: Most gift-givers have a predetermined
spending threshold for their purchases. We will thus have to allow online sorting and searching
of our products by price points since that will be a key criterion for our customers. Our product
quality will have to be acceptable, but it will be our service and the “cuteness” of our products
that will differentiate us from our competition. We anticipate that more competitors will enter
this market, so it will be critical for us to please our customers and provide them with a user-
friendly and service oriented environment.
Bargaining Power of Suppliers. Our raw materials, basic children’s apparel items, are readily
available from numerous suppliers. We will negotiate the lowest possible purchase prices for
these items and will actively monitor our suppliers’ pricing to ensure that we are minimizing our
input costs. We know that our initial low volume of transactions will prevent us from maximiz-
ing volume discounts, but once we increase our sales volume we will be able to negotiate better
pricing. There are many suppliers of jersey cloth, t-shirts, and bib substrates. These suppliers
have been selling to screen printers for years and are well accustomed to their needs, and those