1. 1 eCommerce & Distribution If you build it They will come?

2. 2 eCommerce Big or Small Idea – Product or Service Revenue Model Financing Infrastructure –Hardware, software, people Sales, Traffic, etc.

3. 3 Case Study If you build it They will come?

4. 4 The Idea Provide warehousing & distribution services IT consulting Call center operations

5. 5 Services – Distribution Fully automated warehouse –Individualized warehousing – shared infrastructure In by 8pm, delivered by 3pm Automated inventory control –Auto ordering –Auto trending

6. 6 Services – IT Consulting Custom backend interfacing –Integration with ERP & legacy systems Credit card authorization Timely inventory/sales reports – 12 hours

7. 7 Services – Customer Call Center Personalized 800 numbers Trained customer product reps 24/7 call support

8. 8 The Revenue Model Initial Consulting Services Transactions: – pay as you go –Call Center – per call charge –Distribution – per item shipped Shipping & Handling Warehousing –charge for slow moving items –Inventory turn - 6 times a year Marketing Information – resell trending & customer profiling

9. 9 The Client Brick and Mortar Retailers Traditional Catalogers Internet Retailers Ideal – uniformed merchandize

10. 10 Clients

11. 11 Client's Costs & Returns Initial setup cost ± $1,000,000 –Custom IT distribution –Call Center –Fully inventoried warehouse Returns – medium store

12. 12 Venture Capital Barksdale Partners Silver Lake Partners

13. 13 Venture Capital The Good –Cash Flow Ability to build infrastructure, hire people, market services and product – public relations –Customer Contacts – networks –Experienced Managers

14. 14 Venture Capital The Bad –Limits on control of company –Multiple management layers –Contacts – consultants

15. 15 Venture Capital The Ugly –Demands on speedy returns 3 to 5 years –Founders forced out –Squeeze on work force to cut costs

16. 16 What Happen? Too Much Money – $400 Million Too big of an infrastructure: $100 million –Expensive warehousing, IT equipment Client’s sales expectations –Client’s reality – medium store in sales Services not split –Call centers +, IT consulting +, Distribution -

17. 17 What Happen? Limited balance sheet – burn rate: 500K month Need for more money New clients scared of balance sheet – 6 months Reluctant to expand services – front end design work

18. 18 Potential Clients

19. 19 Competition

20. 20 Contact Information: Paul Frenken President Columbus Association of Internet Professionals pfrenken@colaip.org www.colaip.org Questions?