Campus CDs - My Used CD Business
My Business Strategy
I recently started a business where I buy and sell used music compact discs to only other students. I have tough competition from companies such as Amazon and eBay. My unique selling proposition is that it will be as simple and non-technical as possible for students to buy and sell used CDs, and every buyer or seller will get a reward for using our company. I have created a simple website where students can fill out a form of what CD they want to sell. They will receive an instant quote using a formula that checks prices on Amazon and eBay. Students can also see what CDs I have for sale and make requests. Twice a week at specific times I visit each school in my area to buy and sell the CDs. I only meet in person and do not ship them anything. I partnered with local companies to give coupons to every customer. The local companies know that only students will get the coupons and promotions. The students will see value in my company since it is unique, easy to use, and only for students.
Campus CDs’ Value Chain
I run the business out of my garage. The only raw materials I will be using are the used CDs I buy from students, blank cd cases, gift bags, and promotional materials. The low overhead keeps the business costs low. When I buy CDs from students, I already know what they are selling me. When I get home I enter the condition of CD, price I paid, etc into my private e-commerce software as my inbound logistics. I then clean the CD, test the CD for errors with software in my computer, replace the plastic cases if they are in bad shape, put a unique number on the CD case, and stack the CD on one side of my garage. I record in my e-commerce software the condition of the CD now and if I used a plastic case. This completes the warehouse and storage value chain and upstream management. My ordered system for testing and packing bought CDs makes sure the future buyer doesn’t get a defective product and complains.
When a student requests a CD I have, I find the CD in my garage, take a promotional paper from a local company, print a receipt, and put everything in a company bag. I record in my e-commerce software the buyer and which promotional paper I used. This is my production value chain. I then put the bag in a different spot in the garage which is the finished product storage.
When I go to Ramapo college to buy and sell the CDs on Monday, I print out a list of CDs I have to bring with me and gather the bags I need. My website sends the buyers an automated e-mail in the morning to remind them what time to meet me. This is my entire simple outbound logistics process. Every single value chain up to this point is required for me to get to this point.
Marketing and sales is done through my website and talking to customers in person and on the phone. I send all my customers e-mails weekly promoting my company and promoting local companies through joint ventures. Not only do I try to get more students to use my company, I also try to find local companies to joint venture with. I barter with local companies and also receive money in exchange for them to either be mentioned in my e-mails, have a banner on my website, and/or have promotions for their company in my CD bags. I also post flyers around schools. For now I handle all the e–mails and phone calls myself as part of my customer service.
Exit Strategy
After I tweak and try to optimize all my individual value chains for only local colleges around where I live, I hired employees in different areas of the country to expand. They are paid well on commission only. Now that I’m in all 50 states, I soon realize that no one will be buying CDs very soon and only a few areas of the country are very profitable. I am in the process of selling my company for 12 times my money profit to a greater fool.
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