Opportunity Snapshot
- Country: South Africa
- Industry: Retail Trade
- Stage: Start-up
- Investment size: $50,000 / min. $40,000
Investment Opportunity
Our enterprise named Eohippus will initially operate as an online retailer with the prospect of opening a brick and mortar store in the future.
We will import top quality equipment from around the world and resell to the South African market at a lower price than our competitors.
Funding is required for acquisition of merchandise and operating costs.
The South African equestrian retail market consists of two sectors:
1) High-Income horse riders (upper market) that are able to purchase the best equestrian equipment South African retailers have to offer at highly inflated prices.
2) Middle-Income horse riders (middle market) that are able to purchase equestrian equipment of lower (and often inferior) quality, at less inflated prices.
The middle market represents by far the largest sector of the South African equestrian market and will be the main target market of Eohippus. However, the quality of our merchandise will be desired by both the upper and middle markets.
South Africa currently has a number of equestrian equipment retailers. These retailers import equipment mainly from Europe and resell them to the South African market at extremely inflated prices. Eohippus will import equipment of the same, and in some instances, better quality and resell it at a lower price than the other retailers. We have secured retail agreements with many suppliers of top quality equestrian equipment around the world.
Eohippus will initially operate as an online retailer, with the prospect of opening a brick and mortar store in the future. The online store will service the whole of South Africa, offering next-day delivery to any destination within the country.
The middle market is currently being offered inferior quality merchandise at prices equal to that of top quality equipment in Europe. By offering top quality merchandise at affordable prices, we could potentially become the preferred retailer to the middle market. We also have the opportunity to become a wholesale supplier to various smaller retailers across the country.
The investor has the opportunity to be a part of this exciting venture and benefit from an annual return on their investment. The estimated payback period is 5 years at an agreed annual rate, repaid quarterly, semi-annually or annually.
Eohippus aims to empower the unemployed in South Africa, through the HART foundation of the Cornerstone Christian Church. The prominent church has launched projects to train unemployed South African individuals in the art of horse saddle making. This will create sustainable employment and stimulate the economy.
Our website is currently in development and all trade agreements have been signed. We are now ready to order the first shipments of merchandise.
As retail requires merchandise, the need for finance is to purchase the merchandise that will be resold to end users. Due to the fact that the venture is new, suppliers do not offer terms and request that all orders are paid prior to delivery. Minimum order quantities also apply. Once a sound relationship has been developed with the suppliers, discussions around terms will take place.
Funding is therefore required for purchasing merchandise and covering the operating costs for the first 12 months. The operating costs include storage, shipping, internet and website hosting, accountants fees and telephone costs. In order to maximise cash flow, only a minimum salary will be drawn.
Our competition consists of one large retailer and several smaller retailers. The small retailers are predominantly supplied by the former. We will be competing mainly for the market of the large retailer, by importing our merchandise directly from the manufacturers. Although several smaller retailers also import directly from manufacturers, they offer few brands and very limited ranges.
Competitive Advantage
By importing our merchandise directly from the manufacturers, we avoid the highly inflated wholesale prices of local traders.
As such, we can provide the same quality at lower prices than our competitors.
We therefore have the opportunity to become the preferred retailer to our target market
Rationale for the deal
The opportunity exists for us to provide our target market with top quality equipment at reduced prices.
South Africans will no longer be forced to choose between purchasing affordable inferior quality equipment and top quality equipment at extreme prices.
We also have the opportunity to become a wholesale supplier to various smaller retailers across the country.
Use of financing
Funding is required for the purchase of merchandise and operational costs, such as website hosting, internet costs and storage. Suppliers offer payment terms only after regular trade.
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