Case study of the online marketplace Shiply

‘Shiply’ is an online based marketplace, where transport companies bid for listed shipments, allowing customers to have substantially cheap deal on the transportation of their goods across UK. Moreover, transport firms can save cost and time along with added financial gains by using optimum load capacity of Lorries and haulers. ‘Shiply’ states, pointing to the Government research that, 25% of Lorries are on the roads of Europe run completely empty of cargo and 50% of Lorries run half empty, contributing 36 million tones of CO2 every year to the environment. Customer can save up to 75% of usual shipping cost on an average by using this highly innovative service. Launched in the year 2008, shiply.com has been successful to attract 40,000 customers within a year along with saving 1.6 million kg of CO2, otherwise would have been injected to the environment, and a total cost save of £3 million for the customers [1] . Currently ‘Shiply’ maintains database of 7000 transport companies along with 75000 registered customers in UK to date and has successfully saved 3.9 million kg of CO2 possible emission so far. Shiply has begun to roll out its services across the Europe after successful start along with rapid growth in the UK market. The German version of Shiply was launched in Nov, 2009 and Netherland is on the next.

4.1.2 The Founder and the philosophy behind the business:

Robert Matthams, a 25 year old from Manchester, UK, is the founder of ‘Shiply’. In recalling the event that led him to setup the business, he ran into an experience in University, when he ordered a pool table and on the delivery, the driver told him that the delivery truck would go back to the depot with empty load. “It really shocked me” – Matthams reaction to this happening as it is awful both in monetary and environmental perspective. He realized, this is not a single case, almost majority of transport corporations in the UK and in general Europe, facing this dilemma in regular basis. The business model is much akin to that of ‘e-bay’, where buyers bid for goods, matched with sellers preferred price. But in ‘Shiply’ transport firms bid for price and customers choose among the best low prices quoted by the transport firms. A reverse mechanism of e-bay, but the philosophy is much the same. ‘Shiply’ has assured that, customers can save a huge portion of cost on shipment and the transport firms can utilize their capacity fully along with reaping the benefit of the opportunity costs by adding the financial gains, otherwise somehow lost. Value of shipment via ‘Shiply’ to date is around £25 million. Matthams initiated the business in the period of global financial crisis, but it proved to be a very successful very shortly, beating the gloom of recession. Moreover, taking into account the alarming Environmental issue, CO2 emission, has given ‘Shiply’ a very dynamic and competitive edge.

4.1.3 Start-up Cost:

The initial startup cost was amounted to £25,000, self funded by Matthams. ‘Shiply’ currently have six employees working. As the business is growing rapidly, Venture capitalists and angel investors are showing keen interest to take part. But the founder rather prefer loan from bank if needed than equity financing to avoid contractual clauses [2] .

4.1.4 Revenue Source:

The revenue structure of ‘Shiply’ is commission based. The service is free for customers. The registered transportation firms have to pay 9.9% of the completed deal to ‘Shiply’. ‘Shiply’ has an envious growth rate of 10-20% month to month. In the first year, the turnover was around £60,000, hitting the break-even.

4.1.5 Awards:

‘Shiply’ has crowned many prestigious awards as a start-up firm. It won the ‘BT Business Essence of the Entrepreneur’ award with a sum of £10,000. It also won oil giant Shell’s ‘LiveWIRE’ with a financial tip of £10,000. Shiply was awarded a EUR 100,000 runner-up prize in 2009 ‘Green Challenge’, sponsored by Dutch postcode lottery.

Source:

www.shiply.com

‘Shiply.com entrepreneur is number one’ at http://menmedia.co.uk

‘Intention based Shipping brought to the UK’ at http://springwise.com

4.2 Case study of ‘Cartridge World’: Franchise

Franchisor:

Franchisee: Roy Mathisen , Bundle Road, Workington, West Cumbria, UK.

4.2.1 The Franchisor:

‘Cartridge World’ is a world leader in refilled and remanufactured printer cartridges retailing, originated in Australia in 1988. In 1992 it began its Franchise operation throughout the world. Having Franchise operation in 60 countries and over 1500 outlets worldwide, Cartridge World boasts about its success story of 22 years of its business. ‘Cartridge World’ sells cartridge of top band printers; HP, Epson, Lexmark and Canon. It boasts on saving a substantial amount of money of customers on printer cartridges, either home or business users, by refilling and selling remanufactured cartridges of all the major brands. The quality of the ‘Cartridge World’s printer cartridges are as good as the original, well claimed by the users. Moreover, by refilling the ‘Cartridge World’ made cartridges, consumers can save the environment in a great way. Millions of cartridges in a year turn to a massive landfill, which are highly non Bio-degradable substance. Alone in UK 45 million of used cartridges go to landfill site and each cartridge can take up to almost a millennium to decompose [3] ! In ‘Cartridge World’ a consumer can simply just refill the used cartridge of any major brand instead of buying a new one or throw away the old, thus saving cost and treating the environment in the best possible way. The remanufacturing process saves 2.5 kg of possible CO2 emission per cartridge compared to the production of a new cartridge. In this era of environmental gloom, much fuelled by the existing technology, the business is quite right on time for the aware consumers, who want to save cost and want a cleaner and sustainable environment. ‘Cartridge World’ franchise is also financially lucrative. Sales and business growth of ‘Cartridge world’ is quite envious. Potential turn over on an average is £300,000 pa and gross profit over 60% in any ‘Cartridge World’ franchise in UK. Currently UK has 250 plus franchise outlets of ‘Cartridge World’.

4.2.2 The Franchisor:

Roy Mathisen just launched his ‘Cartridge World’ franchise business in Workington High Street, UK amid the verge of recession and financial turmoil in the end of 2008. But seemingly beating the recession, the store’s turnover increased by a recorded 442% within a year in 2009; compared to the last year. The local knowledge and contacts helped the franchisee, Mr. Roy, to exploit the opportunity. The loyal customer base includes individual customer, Local schools, Solicitors, Accountants, Charities, Engineering and manufacturing businesses with all printer cartridge requirements in West Cumbria. The store refills all major brands of ink jet and laser cartridges along with selling printing accessories, like printer, printing papers, fax supplies and other office necessities.

In Roy’s word, the recession has helped this kind of business a lot, where customers look for saving costs and at the same time try to contribute to the environmental betterment. He determinedly hopes the year 2010 would be another significant year for the growth of his business.

4.2.3 The Franchising Cost:

The required franchisee fee of ‘Cartridge World’ is around £29,950 plus VAT with additional working capital. The investment can be funded by personal fund of franchisee with the combination of bank loan, depends on the eligibility and business experience. ‘Cartridge World’ has good relationship with most of the high street banks. A Franchisee can also apply for the Government backed Enterprise Finance Guarantee (EFG), where 70% of the fund provided by the bank as a loan.

4.2.4 Advantages for the Franchisee:

Cartridge World provides and maintains the following facilities for the new Franchisee,

3 week intensive training program,

Hand on experience in ‘Cartridge World’ training store,

Support team assistance for first week after opening up the store,

A dedicated Business Development manager for new franchisee to help running the business smoothly,

National and local Market exposure by using various marketing campaign, including TV, magazine, newspaper, online advertisement and web presence.

Efficient product purchasing strategy to minimize cost and maximize profit from over 1700 businesses, not compromising with the highest standard of ‘Cartridge World’.

Constant technical support with the updates of new innovation in the market and dedicated help line in business hours.

Moreover, apart from the above, the franchisee will get the benefit of a well established global brand name and the ‘green image’ as ‘Refill not Landfill’ suiting the crucial environmental awareness of the consumers.

Source:

http://franchise.cartridgeworld.co.uk,

‘One year old Workington franchise business defies the recession’ at http://www.whichfranchise.com/news_template2.cfm?ArticleID=1723

‘Cartridge World UK Franchising’ at http://www.whichfranchise.com/franchisorPage.cfm?companyId=2200