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B plan american certified v3.6a
1. American Certified
Your One Stop Shop for American Products™
Business Deck September 2014
Marvin Weinberger, CEO
View Promotional Video
AmericanCertified.com | September 2014 | Confidential v3.6 1
2. Overview
• Our Mission
• Empower consumers to shop their values and buy American
• Build real loyalty and word of mouth
• The Business
• AmericanCertified.com Store
• World’s largest Amazon Affiliate, 1.3 million products (with 5 million more in the pipeline)
• To be promoted across flagship site and dozens of specialty stores and boutiques
• Proprietary search algorithm and mining tech selects millions of products, more than any other Amazon Affiliate
• Makes money through 8.5% commissions paid by Amazon (with future expansion direct to 3P providers)
• Crucial differentiator – cross links with unique content from Directory
• Directory of American Makers
• Targeting 300,000 Makers, of all types and sizes, producing American products
• 9,556 currently registered (most pending Certification)
• 130 Certification Badges (from Veteran owned and Made in Philadelphia to carbon neutral)
• Growth opportunity: advertising, grants and sponsorships (not shown in financial projections, which include B2C only)
• Longer term: Pop-Up Regional Showcases, RFQ services and B2B procurement-assistance
• Essential Facts
• 18 months to develop, launched May 15, 2014; team of 7 (full time and passionate)
• Monthly cash burn of roughly $35,000; $500,000 invested to date
• Seeking investment of $1.5 million primarily to fund customer acquisition and to grow the Directory
• Estimated maximum negative cash (cumulative negative EBIT) of $893,711 to break even
AmericanCertified.com | September 2014 | Confidential v3.6 2
3. Meet American Certified
We take the work out of buying American™
• Problem
• 81% of Americans prefer - and will pay extra for - products made in America,
but no easy, convenient way to identify and buy USA made products
• 41% who try to buy US products can’t even find options (Consumer Reports)
• Solution: AmericanCertified.com
• Already world’s largest “Made in USA” superstore of 1.3MM+ products
• Curated products with trusted prices, checkout, and fulfillment by Amazon
• Enables consumers to buy based on heart-felt beliefs
AmericanCertified.com | September 2014 | Confidential v3.6 3
4. AC is at the Intersection of 3 Consumer Trends
• Empower consumers with the information they need to shop their
individual interests; build real loyalty!
• Buy American
• Universal Appeal - important to 81% of Americans (especially older and conservative)
• Primary motivation is to support American Worker. Also product quality, patriotism,
environment, economy, and overseas working conditions
• Buy Local
• Universal Appeal – 70% willing to pay more (A.T. Kearney)
• Microcosm of the Buy American movement
• Socially Conscious Spending
• 35% willing to spend more for social beliefs, trends younger and liberal (Nielsen)
• Range of motivating concerns, especially environmental sustainability
AmericanCertified.com | September 2014 | Confidential v3.6 4
5. Market Size (Buy American only)
• Core Potential Customers
• Universe consists of 196 million American online shoppers (eMarketer)
• Per our surveys, 81% will spend more for American. 4.8% will pay 25%+ extra
• 196 million x 4.8% = 9.4 million Core Potential Consumers (“the true believers”)
• Discounted Expenditure Estimates
• American consumers spend a yearly average of $1,207 online (Forrester)
• Discount 67% - to $400 - for selective unavailability of desirable USA product choices
• Though most consumer goods purchased domestically are in fact still made in the USA
• AC achieves profitability with Customers spending a weighted average of $112/year
• Estimated Market Size
• 9.4MM Core Potential Consumers x $400 annual estimated spend = $3.76B
AmericanCertified.com | September 2014 | Confidential v3.6 5
7. USA Content Certification Process
AmericanCertified.com | September 2014 | Confidential v3.6 7
1. Listed
Based on Maker’s published
documentation
2. Registered
Maker completes the
application and takes
ownership of listing
3. Verified
Maker completes a formal
verification letter (example on
this slide), then issued an
official company seal for their
website(below)
9. Major Takeaways
• Behavior
• Average session duration 2+ minutes with 6+ pages viewed/session
• Returning visitors already at 15.9% with no retention marketing or email
• Certain demographics (e.g. Republican women, male tool-buyers) outperform
• Conversion starting at 1.25% of all website visits
• Paid Traffic
• Good CPC ($0.25) on $5,000 ad spend, with CTR of 1.54%
• Organic
• 4,000+ visits/month from SEO, haven’t yet scratched the surface
• Affinity aids WOM. 47% of Americans will pay 10%-25%+ more for US Made
AmericanCertified.com | September 2014 | Confidential v3.6 9
10. Scientific Improvement – Build, Measure, Learn
• CPA (Cost Per Visit and Conversion)
• Customize ads and landing pages, A/B test, hyper-target by demographic
• Grow inventory selection (on track to 5+ million products)
• Improve UX with wish lists, related items, emotional connection, search filters
• Highlight crowd-pleasers on home page, e.g. ‘gifts’, ‘new’, ‘others are viewing’
• Emphasize Amazon partnership to set expectations for checkout
• Traffic
• Aggressive PR, SEO, link building, content marketing
• Brand ambassadors and WOM incentives
• Partnerships (e.g.: ID.me, Veterans Association, USAA, AARP)
AmericanCertified.com | September 2014 | Confidential v3.6 10
12. Financial Summary
Year 1 Year 2 Year 3 TOTAL
3 Year EBIT/Month
+ Cumulative EBIT
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
-$1,000,000
AmericanCertified.com | September 2014 | Confidential v3.6 12
Sales
(Through Amazon)
$ 2,573,066 $ 22,585,813 $ 89,776,712 $ 114,935,591
Cost of Goods
(Amazon Fee)
$ 2,354,805 $ 20,666,019 $ 82,145,692 $ 105,166,515
Gross Profit $ 218,261 $ 1,919,794 $ 7,631,021 $ 9,769,076
Gross Profit margin 8.48% 8.50% 8.50% 8.50%
Sales & Marketing $ 390,000 $ 1,220,000 $ 2,640,000 $ 4,250,000
% of revenues 15.16% 5.40% 2.94% 3.70%
Development $ 192,000 $ 192,000 $ 240,000 $ 624,000
% of revenues 7.46% 0.85% 0.27% 0.54%
General, Admin, Hosting $ 305,520 $ 371,040 $ 463,272 $ 1,139,832
% of revenues 11.87% 1.64% 0.52% 0.99%
EBIT $ (669,259) $ 136,754 $ 4,287,749 $ 3,755,244
EBIT margin -26.01% 0.61% 4.78% 3.27%
Negative EBIT
(Cumulative) at
Inflection Point
$ (893,711)
Break even on
month 18
with 32,859
continuing
-$2,000,000
EBIT/Month Cumulative EBIT
13. Primary Risk Factors
• Over-reliance on Amazon
• Will add value with our content
• Need to cement relationship by making them real money
• But meanwhile, develop direct relationships with Maker vendors who will drop-ship
• They can be our ‘exit’ strategy or shut us down
• Competition
• Limited product selection
• Provide neither value-added content nor enhanced search functionality
• We have a significant edge in our proprietary data mining systems
• The real ‘competitive’ challenge is to change user buying behavior
• Redirect buyers to our portal (and to make this a habit)
• Encourage customers to Switch to American made alternatives
• Upsell them to buy more in order to grow the market to everyone’s benefit
• Marketing
• Maintain a complex (but consistent) marketing matrix targeting consumers with diverse interests
• ‘Riches are in the niches’
• Cost-effectively attract and retain customers willing to spend serious money to Buy American
• Other
• Recruit amazing people
• Raise sufficient capital
Company Confidential July 2014 13
14. Competitive Edge
• 7 skilled engineers and marketers with passion and experience (all FT)
• On track to 5,500,000+ products.
• Already 155x larger than other USA Made stores
• 9,000+ American Makers in our directory
• No charge to join directory. Makers earn bounties for linking back to AC.com
• Potential for meaningful B2B revenue, e.g. procurement or advertising
• Potential to go direct to 3P for higher margins
• Proprietary data mining and natural language search
• Engineers recently launched the fully functional tech
AmericanCertified.com | September 2014 | Confidential v3.6 14
15. The Team
• Management
• Marvin Weinberger, President
• Inventor-in-Chief at Innovation Factory, Co-Founder Infonautics
• Ryan Draving, Chief Revenue Officer
• Former CEO of Referable, Senior Methodologist at Philly Marketing Labs
• Chris Sammarco, Director of Technology
• Former Technology Lead at HigherNext (acquired by ProctorU)
• Independent Advisors
• Michael Maher, CEO at Benjamin’s Desk
• Ned Moore, Co-Founder & CEO at Clutch
• Brett Topche, Managing Director at MentorTech
• Chris Cera, Co-founder at ArcWeb
• Seun Olubodun, Founder at Duke & Winston
AmericanCertified.com | September 2014 | Confidential v3.6 15
16. Growth Opportunities (not reflected in financials)
• B2B
• Helping manufacturers to network/source and contract with one another
• B2B procurement-assistance (supplier diversity, sustainability, etc.)
• Increase margins by dealing direct with 3P providers
• Replicate success across new affinities and verticals
• Be the HayNeedle ($350MM/year) of affinity shopping
• E.g. Eco-Certified, All American Tools - “Riches in the Niches”
AmericanCertified.com | September 2014 | Confidential v3.6 16
17. The Round
• Developed tech with $500k personal money
• Raising $1.5 million (rolling close) for customer acquisition
• Uses: Advertising, marketing, and conversion (UI/UX and targeting improvement)
AmericanCertified.com | September 2014 | Confidential v3.6 17
Notas do Editor
Two main drivers for A/C. First is the growing preference to buy American
Support American Jobs – bipartisan
Quality important to libertarians and independents
Environmental/Ethical more for liberal democrats
Patriotism – conservative republicans
Two main drivers for A/C. First is the growing preference to buy American
Support American Jobs – bipartisan
Quality important to libertarians and independents
Environmental/Ethical more for liberal democrats
Patriotism – conservative republicans
Two main drivers for A/C. First is the growing preference to buy American
Support American Jobs – bipartisan
Quality important to libertarians and independents
Environmental/Ethical more for liberal democrats
Patriotism – conservative republicans
Two main drivers for A/C. First is the growing preference to buy American
Support American Jobs – bipartisan
Quality important to libertarians and independents
Environmental/Ethical more for liberal democrats
Patriotism – conservative republicans
Two main drivers for A/C. First is the growing preference to buy American
Support American Jobs – bipartisan
Quality important to libertarians and independents
Environmental/Ethical more for liberal democrats
Patriotism – conservative republicans
Two main drivers for A/C. First is the growing preference to buy American
Support American Jobs – bipartisan
Quality important to libertarians and independents
Environmental/Ethical more for liberal democrats
Patriotism – conservative republicans
Two main drivers for A/C. First is the growing preference to buy American
Support American Jobs – bipartisan
Quality important to libertarians and independents
Environmental/Ethical more for liberal democrats
Patriotism – conservative republicans
Two main drivers for A/C. First is the growing preference to buy American
Support American Jobs – bipartisan
Quality important to libertarians and independents
Environmental/Ethical more for liberal democrats
Patriotism – conservative republicans
Two main drivers for A/C. First is the growing preference to buy American
Support American Jobs – bipartisan
Quality important to libertarians and independents
Environmental/Ethical more for liberal democrats
Patriotism – conservative republicans
Two main drivers for A/C. First is the growing preference to buy American
Support American Jobs – bipartisan
Quality important to libertarians and independents
Environmental/Ethical more for liberal democrats
Patriotism – conservative republicans