Who and what is 15 Minutes Manufacturing?

• We are a new Sydney based brand offering quality products at excellent price-points with unheralded margin. WE ARE OFFERING 66.7% MARGIN ON ALL PRODUCTS ALL THE TIME. Yes that’s right 200% mark up on all products, every season.

• Our aim is to partner with you to overcome the problems that are currently facing the Australian Surf Industry.

• We have a combined design experience of 48 years and have worked with many of the biggest labels here and internationally.

• We have an Australian based Chinese partner who is one of the largest suppliers of t-shirts to the wholesale and screen printing sectors of the Australian marketplace.

• We are currently supplying products to one of Australia’s largest mens retailers.

• QUALITY…….PRICEPOINT…….MARGIN

Problems Facing theAustralian Surf Industry

• Too many accounts - over distribution of products.

• Proliferation of major brand concept stores competing with

Independents. You’ve built their business and now you’re in

competition with them.

• Outlet stores - too much discount product.

• 40% GP x 4 stock turns simply does not generate enough free cash

flow to develop and improve your business.

• Increases in shop rental.

• Increase pressures from shopping centres to open “megastores”.

• Downward pressure on price-points as department stores continue to

improve their offerings (Piping Hot, World Industries and Maui & Sons

etc are increasing their market share). Did you know that Piping Hot

is the 4th largest surf brand in the country !

How are the surf chainsdealing with these problems?

• In order to maintain a point of difference the chain stores are demanding (and receiving) “exclusive” skews or entire styles. This gives them a competitive edge as you cannot compete on like product.

• By developing “megastores”. Megastores increase traffic through both the store and ultimately to the shopping centres, resulting in higher turnover and more competitive rental rates.

• By buying in volume they can obtain better margins from their suppliers.

AND

• By developing their own brands and products they can control price-points, stock turns and margins.

How can YOU deal withthese problems?

By changing your buying habits!!!!!!!

Increase your GP and your Stock Turns Increase your bottom line

• Support the majors (they are your bread and butter) - budget 50% of your purchases to them.

• Choose carefully your second tier brands - select a maximum of 4 and spend 20% of your budget with them.

• The remaining 30% should be used to purchase high margin product.

• This can include specials from the brands above, but you can’t always buy specials when you want.

• Buy closer to the market so that you can react to trends quickly and reduce the guess factor.

Changing your habits!

Plan Your High Margin Purchases • Do this is by buying only the “high margin” specials

from the various labels. This can be a problem as the selection is limited and may not meet your customers’ needs.

AND

• Purchase from high margin suppliers.

Changing your habits!

COMMON BUYING PRACTICES PROJECTED RETAIL SALES $1,000,000.00

BUYING BUDGET $579,000.00

45% GPs (after sales, promotions etc)Up and Comer 1 8% $44,000.00 $80,000.00 $36,000.00 45% 82%Up and Comer 2 6% $33,000.00 $60,000.00 $27,000.00 45% 82%Up and Comer 3 6% $33,000.00 $60,000.00 $27,000.00 45% 82%

20% $110,000.00 $200,000.00 $90,000.00 45% 82%

2nd Tier 100% Mark UP

38% GPs (after sales and markdowns etc)Minor Label 1 4% $24,800.00 $40,000.00 $15,200.00 38% 61%Minor Label 2 4% $24,800.00 $40,000.00 $15,200.00 38% 61%Minor Label 3 2% $12,400.00 $20,000.00 $7,600.00 38% 61%Minor Label 4 2% $12,400.00 $20,000.00 $7,600.00 38% 61%Minor Label 5 2% $12,400.00 $20,000.00 $7,600.00 38% 61%Minor Label 6 2% $12,400.00 $20,000.00 $7,600.00 38% 61%Minor Label 7 2% $12,400.00 $20,000.00 $7,600.00 38% 61%Minor Label 8 2% $12,400.00 $20,000.00 $7,600.00 38% 61%

20% $124,000.00 $200,000.00 $76,000.00 38% 61%

OTHER BRANDS 100% Mark UP

55% GPs (after mark downs etc)High Margin 1 5% $22,500.00 $50,000.00 $27,500.00 55% 122%High Margin 2 5% $22,500.00 $50,000.00 $27,500.00 55% 122%

10% $45,000.00 $100,000.00 $55,000.00 55% 122%

TOTAL 100% $579,000.00 $1,000,000.00 $421,000.00 42% 73%

High Margin 150% Mark UP

Brands% of sales

BUDGETRETAILSALES

GP $ GP % ROII

40% GPs (after sales, promotions etc)Major 1 20% $120,000.00 $200,000.00 $80,000.00 40% 67%Major 2 15% $90,000.00 $150,000.00 $60,000.00 40% 67%Major 3 15% $90,000.00 $150,000.00 $60,000.00 40% 67%

50% $300,000.00 $500,000.00 $200,000.00 40% 67%

Major brands 100% Mark UP

NB: ROII is the Return on Inventory Investment

SMART BUYING PRACTICESPROJECTED RETAIL SALES $1,000,000.00

BUYING BUDGET $534,950.00

45% GPs (after sales, promotions etc)Up and Comer 1 8% $44,000.00 $80,000.00 $36,000.00 45% 82%Up and Comer 2 6% $33,000.00 $60,000.00 $27,000.00 45% 82%Up and Comer 3 6% $33,000.00 $60,000.00 $27,000.00 45% 82%

20% $110,000.00 $200,000.00 $90,000.00 45% 82%

2nd Tier 100% Mark UP

55% GPsHigh Margin 1 10% $45,000.00 $100,000.00 $55,000.00 55% 122%High Margin 2 5% $22,500.00 $50,000.00 $27,500.00 55% 122%

15% $67,500.00 $150,000.00 $82,500.00 55% 122%

High Margin 150% Mark UP

61.7% GPs15 Minutes 15% $57,450.00 $150,000.00 $92,550.00 62% 161%

15% $57,450.00 $150,000.00 $92,550.00 62% 161%

TOTAL 100% $534,950.00 $1,000,000.00 $465,050.00 47% 87%

Mega Margin 200% Mark UP

• THAT IS AN IMPROVEMENT OF

$40,050.00(to your bottom line)

Brands% of sales

BUDGETRETAILSALES

GP $ GP % ROII

40% GPs (after sales, promotions etc)Major 1 20% $120,000.00 $200,000.00 $80,000.00 40% 67%Major 2 15% $90,000.00 $150,000.00 $60,000.00 40% 67%Major 3 15% $90,000.00 $150,000.00 $60,000.00 40% 67%

50% $300,000.00 $500,000.00 $200,000.00 40% 67%

Major brands 100% Mark UP

BUYING SMART…AND IT’S $$$ BENEFITS.

• By buying closer to the market you can also reduce the risks of uncertainty in two ways:

• You can buy according to a more current sales history.

• You can react quickly to new trends and directions as they are happening rather than trying to predict them

BE REACTIVE NOT PREDICTIVE

• This should result in a greater number of stock turns as your stock will be more in tune with market demands.

• Increasing your stock turns from 4 to 5 will see the

following results:• Average w/s stock holding for 4 turns = $144,750.00• Average w/s stock holding for 5 turns = $106,990.00• Average w/s stock reduction = $ 37,760.00

• Add this to your reduced cost of goods and your nett cash

flow position will be $77,810 better off.

Based on the previous two tables

How can 15 Minutes Manufacturing make this happen for you?

QUALITY

PRICEPOINT

MARGIN

This is our mantra.

QUALITY

• We guarantee that the quality is as good as our competitors or you can ship the

goods back. No questions asked.

QUALITY…….PRICEPOINT…….MARGIN

PRICEPOINT

Guaranteed pricepoints 24/7/365

QUALITY…….PRICEPOINT…….MARGIN

DEPARTMENT CATEGORY SUB-CATEGORYRRPinc

RRPex

MENS T-Shirts Basic T-Shirts $29.95 $27.23

Fashion T-Shirts $39.95 $36.32

Polos $49.95 $45.41

Shirts $49.95 $45.41

Shorts Boardshorts $49.95 $45.41

Basic Walkshorts $49.95 $45.41

Delux Walkshorts $59.95 $54.50

Pants Basic Pants $59.95 $54.50

Delux Pants $69.95 $63.59

Denim Shorts $59.95 $54.50

Jeans $69.95 $63.59

on ALL products ALL the timeIf you choose the large pack.

And

60%If you choose the small pack

Yes that’s right up to 200% mark up

QUALITY…….PRICEPOINT…….MARGIN

MARGIN

How can 15 Minutes Manufacturing afford do do this?

You will have rightly said to yourself by now “This all sounds to good to be true” and have askedYourself “How are these guys going to do this and maintaina viable business?”With your help we are going to do things a little differently.• With the exception of the first range we are not going to be

sampling (we don’t expect you to buy first time sight unseen).

• All sales will be done on our web site (currently under construction).

• You will be sent emails letting you know that a new range has been posted and you will then have 2 weeks to order products from the selection.

• You will be emailed a confirmation order. If styles that you have ordered do not meet minimums you will be sent an advisory email with a list of the styles that are going ahead.

• You will be given 1 more week to revise your orders and then we go into production.

• This results in a much shorter production cycle.

This is a proven model. It is the way that the major retailers develop their home brands.

How can 15 Minutes Manufacturing afford do do this for you?

• No media advertising. We have given you all the money that would normally be allocated to advertising so that you can spend it on your business to prosper your business.

• Little to no stock holding. We will be making to order so there will be no stock for us to warehouse or finance.

• Low overheads. No new warehousing space or infrastructure costs will be required beyond what is already in place for the t-shirt business.

• With your feedback our product will continue to be on the mark. We will aim to provide you with what you want rather than tell you what we think you need.

That’s Us!!!

We hope that you like the concept and will come aboard.

Check out the range. We hope that you like it and see some

stuff there that you think that you can retail.

We look forward to a mutually profitable future.

Best Regards from the Team at People Productions