Quick, easy and hassle free, your furniture means a lot to me!”
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One nightstand is a quick, easy and hassle-free service "by students, for students" where students can buy/sell used furniture. It caters to the exact furniture needs of a student population and offers a whole product solution wherein students looking to buy furniture can browse furniture online, make appointments, get their furniture delivered and assembled at a low price. On the other hand, students looking to sell their furniture can make an appointment online for valuation of their furniture, after which their furniture is picked up free of charge.
Executive Summary 2012
Duke Start-Up Challenge: Women Led track
“Quick, easy and hassle free, your furniture means a lot to me!”
$1,000. That is how much it would cost you to leave all your furniture behind. You thought you would be doing your landlord a favor, you have furnished his apartment with Ikea’s finest. However, it seems he is unimpressed with your menagerie of mismatched items and is threatening to withhold your security deposit if the room is not empty within a week. You just do not know how to get rid of all this furniture apart from leaving it on the street for the homeless.
The business model of One Nightstand is based on cost optimization and the consignment model that offers recurrent value generation from transient assets. The cost optimization is executed through routing optimizations, effective inventory management, and maximizing asset utilization allowing for a unique value proposition yet to be delivered to students. The active operating time for One Nightstand is six months, April to September, when the purchasing and selling of furniture will occur. This is assumed to be the time of greatest demand when students will be moving into or out of campuses. The warehouse will be rented for the entire year to store unsold furniture. Labor and transportation is allocated in each operating cycle based on expected demand.
Revenue Model and Cost StructureThe average cost to purchase furniture per person is assumed to be $100. The average price of selling furniture in customized sets is $250. These figures are based on data relating to prices students would be willing to buy and sell furniture at (gathered in an extensive survey of 112 students). The market potential is assumed to be the market of those interested in buying used furniture at five universities equivalent in size to Duke University. It is assumed that the number of students selling furniture is the same as the number buying furniture. In our first year, we assume a penetration rate of 5% selling to and buying from 1,055 students, which we think is possible through university promotions. The five year goal is to be the number one source for students looking to furnish their apartment and get rid of furniture in the RTP area.
While there are companies catering to student furniture needs, none provide the level of convenience and service One Nightstand will offer. A key advantage we will have over our competitors is our affiliation with Universities and our empathy to the difficulties students face. The diagram below compares One Nightstand to our top five competitors. The competitors were determined during the survey based on the students' current services.
Pro Forma Statement
The values derived in this statement are based on one cluster - five universities in the RTP area. The bottoms-up approach was used in determining the values. The penetration rate is enforced through our aggresive marketing strategy and university affiliation.
Rachel O Connor
The team is comprised of four female Master of Engineering Management students, specializing in Competitive Strategies and Innovation Management.
- Remove the hassle of moving furniture in and out
- No need to assemble furniture
- Large database for students to choose from
- Convenient one stop shop to furnish your apartment
- Environmentally friendly, reduced packaging waste
Use of Funds
The total startup funding needed is $54,341. We will use this to cover the rental cost of warehouse, cargo vans and labor for our first year of operation. Our business design is based on a consignment and cost optimization model, which allows for net profit generation from year 1.
Long Term Strategy
- Expand to other areas in the US with a high densities of students
- Establish rotating student management teams for each university cluster