Presented by: Rachel Romano

Kathleen BarbosaLydia Cooper

Jasmine ShaversMonika Kerby

The Organization

Jon Nordmark President and CEO, eBags

Mike FrazziniVP of Technology and Operations, eBags

Peter CobbVP of Global Merchandising, Customer Acquisition and Awareness, eBags

Mission Statement To be the world's most recommended retailer of bags and related accessories by delivering a trustworthy and innovative customer experience while being a cool place to work, and earning a superior profit.

Hassle-Free Returns Policy• 60 days from receipt of shipment• Prepaid Return Labels

Price Guarantee • Refund difference of price within 10 days

eBags.com

• Leading online retailer • 6.7 million bags sold• Over 500 brands and 30,000 products

Samsonite, Kenneth Cole, Kathy Van Zeeland, kate spade, ColeHaan, JanSport, and Nike

• Over 1.1 million unbiased customer reviews • Pioneering tools

Laptop Case Finder, the Airline Approved Carry-On Finder, and exclusive Bagopedia

• eBags.com is a part of eBags, Inc. which includes eBags UK

Statistics

History

• Early 19th century luggage • Expensive, hand-crafted, difficult to create• Leather and wood

• World War II: Rip-stop nylon, fiberglass, aluminum, plastics and simulated fabrics

• Durable, lighter, crafted by machine

History

• 1980s: Status symbol• Match status, wealth and fashion taste• Coach, Louis Vitton, and other designers

Fragmentation

Fashion Designers Coach, Vera Bradley

Luggage companies Samsonite, American Tourister

Prices $20 to $1500

StylesSuitcasesHandbagsBriefcasesMessenger bagsCarry-on’sWalletsClutchesBackpacks

eBags brings all of these options together to give their customers one stop shopping for all of their luggage and bag needs.

Product Choices

Two major types of products offered:

1. Brand name merchandise from leading retailers

2. The companies own line of eBags

products

Vera Bradley Rolling Trolley

eBags rolling trolley

• Two separate types of supply chains – Drop-ship model.– Traditional speculative inventory model

Customer places order on eBags.com →eBags electronically transmits the order to the vendor →Vendor ships order to the customer directly, using the eBags shipping account →eBags pulls tracking information and sends to customer in confirmation email →Vendor invoices eBags for the product →Ebags issues a payment to the vendor ■

Drop-Ship Model

Speculative Inventory

Product comes from Asian manufacturers who sends the bags to be stored in Texas warehouse →Order placed gets forwarded to the warehouse →Warehouse picks and ships the order to the customer ■

Two Supply Chains

Drop-Ship Model (85% of orders)

Pros:• No cost to house inventory

(rent, insurance, etc.)• Vendors get increased

customer base and brand awareness

Cons:• Must have good relationship

with vendors• Harder to problem solve

customer service issues between eBags website AND vendor

Speculative Inventory Model(15% of orders)

Pros:• Higher percentage of profits

goes directly to eBags• Can capitalize on cost

conscious customer base

Cons:• Must pay for the warehouse in

Texas• Are vulnerable to inventory

obsolescence

Footwear

“6pm.com quadrupled in size during the three

years we owned thewebsite. We feelconfident in our decision to sell 6pm.com to an

outstanding company like Zappos.com as this move will allow eBags

to concentrate our energy towards

continuing to be the Internet's premier

luggage and handbag e-tailer.”

Jon Nordmark, CEO and co-founder

Competitive Advantage

Shoedini.com• Highly competitive

• Decrease in importance in retail channel• Focus on price sensitive consumers

• Take advantage of price sensitive e-commerce consumer

Record Sales

Fiscal year ending June 30, 2010

Estimated Annual Sales $500,000 to $1 million

Sales up 13% Leading sales of messenger bag and luggage categories 26% and 23%

Brands showing strong growth:

B. Makowsky, Timbuk2 Samsonite Baggallini.

Fiscal year ending June 30, 2010

Estimated Annual Sales $500,000 to $1 million

Sales up 13% Leading sales of messenger bag and luggage categories 26% and 23%

Brands showing strong growth:

B. Makowsky, Timbuk2 Samsonite Baggallini.

Challenges

Consumer behavior• Need to be tried on by consumer• Buying behavior suggests

consumers purchase multiple pairs of shoes for right fit.

• Increased product return rate

Marketing strategy• Increase consumer awareness

that footwear can be purchased on the website.

• Agreement with non-retail websites to promote eBags on their websites.

• Affiliates to receive commission for every sale that resulted in navigation through affiliate’s website.

Challenges of 6PM.com:

Supply Chain Management

Business Model Challenges Language barriersShipping requirementsBrand awareness Web page administration Relationship between vendors and online retailers

Must satisfy drop-ship method

ChallengesManaging at Distribution LevelFunctionality versus Style/ValueCommunication

European Expansion

From a business perspective:What decisions should Jon Nordmark make regarding the European expansion and the foot wear markets?− Expand into the European market − Footwear will take time

High internet usage and percentage of online shopping:

− Profit− International business

Footwear Expansion

• Not a good move just yet business • Need time to develop into shoe market• Feasible with strategy

Expansion, Europe, eBags:Will be good profit

• Involves transfer of information across the internet• Consumers electronically exchange goods and services

with no barriers time or distance• Accept online payments, shopping cart software to track

services and customers

Leverage Strengths and Profits• Different approach to advertisement or marketing• A larger variety of luggage items• Use variety of retailers to attract different consumers• Expand products to clothes and other items

With a variety of products and strategic planning eBags can dominate online shopping.

e-commerce

Presented by: Rachel Romano

Kathleen BarbosaLydia Cooper

Jasmine ShaversMonika Kerby