BUS 402: KartMarket E-Market Feasibility and Financial Report

This assignment report examines the KartMarket e-commerce startup, focusing on market analysis, product feasibility, and financial projections. It begins with an introduction to the e-commerce landscape, highlighting the growth of online shopping in the USA and market leaders like Amazon, eBay, and Walmart. The report analyzes market data, including revenue and percentage shares, and assesses product feasibility by presenting the total market growth over a five-year period. It then provides an overview of KartMarket, a new online grocery startup, including its investment, operations, and entrepreneurial readiness. The financial feasibility section includes a three-year cash flow analysis, detailing variable and fixed costs, and projected profits. The report concludes with recommendations for business expansion, such as adding a garment section to the online store. The report also includes references to academic sources used for research.

Assignment on KartMarket’s E-Market
Assignment on KartMarket’s E-Market
Name of the student
Roll number
Submission date

1Assignment on KartMarket’s E-Market
Introduction
The new era of internet has created a new method of shopping for its customers. The
online marketing is an excellent platform for the ecommerce business to expand. A large
population of millions (Dodoo, N. A. & Wu, 2019) has made USA a big market for all kinds of
ecommerce business. The usage of internet has risen since 2010. Almost 90% of the American
are using internet , 67% of them are adult (Prabhal, & Rao, 2019). There is a huge expansion of
online market place. All big brand who were doing business by brick and mortar method are
having a well functioning online website with ecommerce. They are not only selling their
product online but also delivering the item to doorstep. This has given a new dimension to their
business. They are earning more profit by expanding the market It gives opportunity to the store
to sell products beyond boundaries.
Market feasibility
The data below explains the ecommerce market in USA. The market for various
ecommerce store is represented here. By the data it is very clear that Amazon is capturing a huge
market by earning revenue of 282.52 billion dollar in 2019, where as Wayfair is making a profit
of only 7 billion dollars (Steinhoff, Arli, Weaven & Kozlenkova, 2019).
E commerce market in us ( Billion dollars) 2017 2018 2019
Amazon 190.51 234.61 282.52
Ebay 34.45 35.63 36.64
Walmart 15.04 20.95 27.81
The home depot 6.48 8.18 10.07
Best Buy 5.89 6.61 7.53
Macy's 5.83 6.6 7.44
Wayfair 4.08 5.76 7.68

2Assignment on KartMarket’s E-Market
Graph 1. Ecommerce market leaders.
Product or Service Feasibility
The chart represents the total market that ecommerce business capture from year 2015 to
2019. It’s a five year data and the expansion of the online shopping is clearly visible. The market
has seen growth of 676.49 billion in 2019, it just the beginning of the online shopping market
(Kingsnorth, 2019).
Total market in 5
years
In
billion
2015 112.12
2016 156.79
2017 287.4
2018 350.77
2019 417.57
2020 676.49

3Assignment on KartMarket’s E-Market
Graph 2 Total market for ecommerce in five years.
Total market in percentage
The big players like Amazon holds a total of 47% market in year 2019. The expansion at
this rate of 5% each year. The small share holder like Wayfair is holding a total of 1.3% of the
total ecommerce market in USA (Rohm, Stefl & Saint Clair, 2019). This can be seen as an
opportunity as the total market of Wayfair was less than 1 % three years back but it is expanding
year on year. This proves that the market is not decreasing or showing any stagnation, But it is in
the growth phasing (Wu, 2019). Starting new start up for ecommerce will prove to be a boom in
near future.
Total percentage of retail ecommerce 2017 2018 2019
Amazon 42% 44.80% 47.00%
Ebay 7.60% 6.80% 6.10%
Walmart 3.30% 4% 4.60%
The home depot 1.40% 1.60% 1.70%
Best Buy 1.30% 1.30% 1.30%
Macy's 1.30% 1.30% 1.30%
Wayfair 0.90% 1.10% 1.30%

4Assignment on KartMarket’s E-Market
Graph 3. The percentage of ecommerce of total market.
KartMarket the new start up and Entrepreneurial Readiness
Kartmarket is a new start up which deals with online sales of various kinds of products.
The major section of product is grocery. The store has started to operate in 2019 and this is seen
as challenging phase. The market is full of online sales ecommerce sites. Big companies like
Amazon, EBay and Alibaba are the market leaders and they are earning a mega profit from the
market today (Huang et al, 2019). They are tapping international market and are also succeeding
in making profit.
Kartmarket is a new start up company with an investment of one hundred thousand
dollars. The amount is loan that has been approved by the Bank of America and it is a subsidized
loan. That means that there will be rebate on the interest part. The company is functioning in a
small rented office with only 20 staff as of now. The company is investing in E-kart for delivery
services and taking the service from other companies also. They are getting discounts for each
delivery made for one year as per the contract.
As per the above research the growth for this kind of ecommerce is very bright. There are
very few retailers who provide everything under same roof. It is true that the company is very
small in comparison to other counter parts but the expansion will be seen in coming years and
there are major chance of new investors joining the company soon.

5Assignment on KartMarket’s E-Market
The financial Feasibility for three years.
Unit cost (FC+VC)
Budgeting
$ in 000
Cost Analysis 2019 2020 2021
Total unit Sold 75000 120000 250000
variable cost
Delivery cost 10000 15000 20000
Labor cost 8000 8000 8000
Commission 2000 2500 3000
Freight out 3000 3600 4000
Indirect material 2500 3500 4200
Packaging cost 1500 2200 3200
Inventory 0 5000 6000
cost of goods sold 27000 39800 48400
Total variable cost 27000 39800 48400
Fixed cost
salaries(includes payroll taxes) 5000 5000 6000
Website development cost 1500 0 0
Online marketing cost 1200 1200 1500
Cloud storage fees 1000 1000 1500
accounting and legal 2500 2500 2500
taxes(real estate) 1000 1000 1000
Furniture and fixture 1500 200 200
Advertising 600 1000 2300
rent paid 2300 2300 2300

6Assignment on KartMarket’s E-Market
Insurance 500 500 500
Utilities 200 200 200
Interest 300 300 300
Depreciation 500 500 500
Total fixed cost 18100 15700 18800
Total Cost (VC+FC) 45100 55500 67200
Total investment 100000 20000 20000
Total cash carried forward 0 69900 59400
Profit/ loss 15000 25000 50000
Total cash flow 69900 59400 62200
Percentage Change in cash
flow 0 -15% 5%
The financial analysis is done to understand the cash inflow and out flow of the company
for initial three years. This is a hypothetical analysis to understand how well the company will do
under the existing cost scenario.
As we can see that there is a investment of one hundred dollar in the year 2019. The
variable cost combing all the normal activities comes to 27000$, 39800$ and 48400$ for 2019,
2020, 2021. This is based on the hypothetical sales unit that is created based on the market
research. The cost is rising year on year. This is a good symbol of the business expansion. The
fixed cost is the cost that does not change over years but here as it is ecommerce business the
cost may vary depending upon the amount of units sold each year. The first year cost is high in
comparison to the other two years. This is due to the initial start up cost for some of the fixture.
The cost is 18100$, 15700$ and 18800$ for year 2019, 2020, 2021. The total cash flow is
positive for all the three years. This will be positive if the hypothetical unit sold, Fixed and
variable cost remains close to it. The percentage is of about 5 % for the year 2021. This is a good
sign. The company will have a good amount of cash inflow for at least three years. That will
help support the business for further operations.

7Assignment on KartMarket’s E-Market
The best way to grow in the competitive world is by expanding. The more a business
expands the more it sees growth. As kartmarket is selling everything as a retailer it can expand
into garment section as well. This also has a huge market and the company will expand in its
operation. This section has not been added into the Kartmarket online shop. Thus a new section
will draw more customers and will help in establishing the company in future.

8Assignment on KartMarket’s E-Market
References
Dodoo, N. A., & Wu, L. (2019). Exploring the anteceding impact of personalised social media
advertising on online impulse buying tendency. International Journal of Internet
Marketing and Advertising, 13(1), 73-95.
Huang, Y., Liu, H., Li, W., Wang, Z., Hu, X., & Wang, W. (2019). Lifestyles in Amazon:
Evidence from online reviews enhanced recommender system. International Journal of
Market Research, 1470785319844146.
Kingsnorth, S. (2019). Digital marketing strategy: an integrated approach to online marketing.
Kogan Page Publishers.
Prabhala, K., & Rao, T. U. (2019). A Review of Phenomenal Raise of Advertisement Spending
with Digital Marketing.
Rohm, A. J., Stefl, M., & Saint Clair, J. (2019). Time for a marketing curriculum overhaul:
Developing a digital-first approach. Journal of Marketing Education, 41(1), 47-59.
Steinhoff, L., Arli, D., Weaven, S., & Kozlenkova, I. V. (2019). Online relationship
marketing. Journal of the Academy of Marketing Science, 47(3), 369-393.
Wu, P. F. (2019). Motivation crowding in online product reviewing: A qualitative study of
amazon reviewers. Information & Management.