We will focus our strategic efforts on promoting sales through our website. We see our key target audience as women over 40 years with disposable income of over $60,000. Customer reach will be increased by advertising with the main search engines. Our sales message will emphasize customer service and communication. We will do our best to source products for customers' orders by further strengthening our relationships with key suppliers, such as Spoontiques and Art Glass. Our website will be promoted through participation in key shows and exhibitions, where we will strive to establish rapport with our key target audience and ensure repeat sales.
Our competitive edges are our popularity, accessibility, flexibility, and ability to deliver. Any search engine brings up Grapevine Country in the top 5-10 listings on the search string, "Spoontiques Pin Art," and we are beginning to be found by searchers for Art Glass. We are developing a customer base and followers (called "groupies" by one show promoter) to our shows. Previous year's customers have returned for additional purchases. Our marketing strategy will enforce and enhance our competitive edge for additional growth.
Our main competitive edge over gift chains and retail stores is our ability to deliver out-of-stock and hard to find items through special ordering. In addition, our website is more navigable and friendly than those of most large stores who carry similar products as a side-line. Our focus on home decor and jewelry allows us to highlight entire collections that get short shrift on competitors' online listings.
Road shows and festivals were originally a means of promoting the Web store and will continue as such until the demands of the Web store reach our goals. Despite the travel and hard work involved, as "people persons," the opportunity of meeting customers face-to-face has been profitable. Even though the Artistic Glass has been sold in upscale gift stores for more than 10 years, many people are seeing it for the first time. Our show schedule is maintained on the Web store and customers seek us out when we exhibit in their area or, as it has happened, within a 2-hour drive. When possible, discount coupons for show purchases are sent to customers in regions of upcoming shows. Scented Roses tagged with the Web store URL and coded discount coupon on their next online purchase are presented to selected customers. We are purchasing "pay-per-click" listings on affordably-priced shopping websites (www.shopping.com and www.business.com) and expect to upgrade to shopping directory at www.Yahoo.com by the end of the year. These expenses are not reflected in the attached financial projections as the number of clicks are difficult to project at this point. However, the cash flow projections indicate there are sufficient funds to proceed.
We focus a large amount of energy on customer service and communication. The fact that we are often able to obtain out-of-stock, retired/terminated, or hard to find Spoontiques Pin Art is based on the great rapport we have with the company. We frequently receive referrals from Spoontiques, as well, because they know we stock many of the popular pieces that the general public cannot buy directly from the company. There have only been three instances in two years when a product was completely unavailable. We also special order items for a customer, a service not generally provided by gift stores or other sources.
We offer our customers multiple secure payment processing options, so they can use whichever process they feel most comfortable with. Customers placing orders by phone are extended every courtesy and can count on receiving quality products at a fair price. We also have an order form online that can be faxed to our office.
Payment options on the Web store started with an online credit card processing that proved to be costly, with too few sales in the beginning to be financially prudent. PayPal added merchant accounts to their program, and when our shopping cart provided a PayPal gateway, we switched. Unfortunately, PayPal was also a discouraging and difficult transaction facilitator, and several sales were lost until we emailed or called to offer alternative payment options. (PayPal recently upgraded and improved their program but it is less frequently used than our offline processing.)
In early Spring of 2003, the shopping cart was upgraded to allow offline processing (manually, on our company credit card terminal) and sales soared. We provide additional payment options – checks and money orders, since there are still people concerned about providing their personal information on the Internet or over the phone. However, shipments on the non-credit card paid orders are dispatched only once funds are collected, so for cash flow planning purposes, all sales are treated as cash sales.
2003 was our first profitable year, producing expectations of continued growth. We believe that our new payment options and marketing strategies will produce continued growth over the next three years, although probably not at the same explosive rate.
Based on current trends, and our own sales results, we are forecasting almost 50% growth next year, with continued high growth in online sales, and slower growth rates for our other revenue streams.
Our break-even point was based on an average sale of $21 at shows and $27 on the Web store. By increasing the incentives and awareness through promotion, we expect to raise the average sale to $35. The spring shows and sales have been a little disappointing due to consumers' concerns about the economy. However, while attendance at road shows is down, visits to the Web store have increased. We were able to establish 4 new web design clients which assisted cash flow.
Sales in the first quarter will be slow, as we begin preparations for renovating the barn and working out of an alternate site on our property during construction. We will be able to return full-time attention to generating sales in April.