DISTRIBUTION The product will be manufactured a t a local New England factory, drop-shipped to a storage facility, and shipped via UPS to the consumer. Initially, inventory can be carried at no cost in Ricci's house or garage. This same process could also be used if the website is developed. FINANCING A $30,000 small-business loan is the minimum amount Ricci needs to fund her fixed cost for the first phase of the rollout of the mail-order program. Marketing the product through traditional retail channels would require approximately $250,000 for advertising and other selling costs associated with a new product information.
BREAK-EVEN ANALYSIS Break-even analysis was performed at three mail-order prices, as seen in Exhibit 4. On the basis of this analysis, Ricci must meet only one-fourth of her target sales goal, or one-quarter of 1 percent of the total market, in order to break even in the first year.