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Rameco Distribution

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by

Mohammad Malik

on 9 January 2015

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Transcript of Rameco Distribution

Products
Pen Created From Compressed Recycled Newspaper

Paper Cap vs. Corn Plastic Cap
Corn Cap Allows Pen to be Retractable

Same Cost

More Attractive to Environmentally Active Charities and Companies
Cost Structure
Pros & Cons
Line of Credit vs. Adding a Partner
Projected Income Statements
Rameco Distribution
By: Pete, Taylor, Mohammad
Rameco Distribution
Company born after winning feasibility award study
Fundraising
Promotion
Provide Eco-Friendly Pens For:
Relatively low costs = Higher margins for charities
Customizable product = Brand Awareness
Status Quo vs. Hiring a Distributor
Pros
Maintain Larger Margins – 15%
Have Direct Control of Entire Process
Cons
Time (Opportunity Cost)
Travel
Car & Car Expenses
• $10,000 for 2 Used Cars
• $1,200 Fuel Cost
• $200 Maintenance
• $100 Promotional Items
• $800 New Phones
• Cost to Meet 5x/Year
Lack of Man-Power/ Would Have to Hire Staff

Pros
Start Immediately
No Worries About Collection & Distribution
Save on Car Expenses
3X Expected Sales
Save on Travel Expenses
Cons
Distributor Commission Charge – 15%
$5,000 Startup Fee
$750 Monthly Fee

Line of Credit
Could Borrow up to $3,000
5% Interest/Year
Payable by 15th of Each Month
Adding a Partner
Receive $5,162.50 Cash for Equity
Available Loan at 5% Interest/Yr
Questions?
Allocation of Capital
Which Strategic Goals Will This Project Help The Company Fulfill?
What Ongoing Maintenance or Support Will The Project Require?
Besides Capital Investment, Are Technological Resources Requires?
Questions?
Allocation of Capital
Which Opportunities Are We Turning Down By Funding This Project?
Do You Think The Investment Will Be Accretive or Dilute the Income Statement
Status Quo 3-Year Net Income - $14,062
Hiring Distributor 3-Year Net Income - $19,300
Conclusion
Hire Distributor
Full transcript