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Important project decisions

In our project there are some important decisions made which created our final product service system. These decisions can be seen using the 'Important decisions' button.

Important decisions

realisation

The first things we will continue developing are the following things:

Material

Curv® is a material made of woven polypropylene that combines the versatility of a 100% thermoplastic with the high performance of a fiber-reinforced composite.

Transport

It is important that the company immediately works together with a transport company. The suitcases need to be delivered and picked up at the houses of our customers.

storage

The warehouse should be located in the middle of the country. This makes it logistically easier to get the suitcases to the right people. The shipping costs will be an average cost, it does not matter if you are located closely to the warehouse or if you are far away from it.

Shuttle service

Especially when starting our company, working together with a shuttle service system is the easiest. After multiple years of running the company, it would be nice to look at starting an own shuttle service. For this to work, connections and deals with the multiple and/or large airlines must be made.

In 2 years

In two years we want to work together with a some travel agencies like TUI, Dayreizen, Corendon etc.

We will already be working together with some airlines for the check-in service. It would be nice if there are also booking companies that are promoting the company or having the option to book our service with a ticket for your flight. In this way, more people will be aware of the service and will use it.

In 5 years

- Bring new products on the market

- Bringing the suitcases back home to the customer

- Not only Schiphol but also other airports in the Netherlands

- Warehouse located at Schiphol.

In 10 years

We want to keep expanding the company so that the suitcases will be delivered to the hotel of the customer.

In ten years, we want to offer the customer the service of checking in the luggage as well as bringing it to their vacation location. The customer would not have to wait at the baggage carousel. And will receive their luggage when arrived at their holiday destination.

In 15 to 20 years

In about fifteen to twenty years, when all our previous goals are achieved, we would like to expend further into Europe. This will include giving the option to transport your luggage to airports outside our borders but still close enough for it being a sensible option for Dutch citizens. This will include Brussel, Düsseldorf etc.

Finance

To get an idea of how much luggage should be rented on a yearly basis, a financial estimation is made. For this estimation, trolleys and suitcases are distinguished from each other. We assume that a trolley will be used for 14 days on average and a suitcase will be rented for 21 days on average. Another assumption that we make in this calculation is that the trolley, as well as the suitcase will have to be replaced by a new one every 2 years on average. This would mean 26 cycles in total for each trolley and 18 cycles in total for each trolley.

Trolley

A trolley will be available for €10,- for the customer. However, we assume that everyone takes a €5,- sleeve with it, which brings the total costs to €15,-. On top of this, the customer will pay €1,- for each day that they use the trolley. If it is rented for a period of 14 days, for example, €14,- will have to be paid, adding up to €29,- in total for a 14-day trolley use. The trolley will not have a shuttle service included.

Suitcase

The suitcase, which does include a shuttle service, will be available from €35,-. Including the sleeve again, the customer will have to pay €40,-. Each day that the suitcase is rented, €1,50 will be charged. This means that the customer will be paying €71,50 in total for a 21-day trip.

Costs

Opposite to these costs for the customer (revenue for us), there will also be costs for us of course. The total cost of one trolley cycle will be around €15,-. This includes shipment, sleeve, and personnel costs. The production costs for a trolley are estimated to be €150,-. The costs of a suitcase cycle will be €27,- and the production costs will be €200,-. Next to this, we estimate that there will be some yearly costs as well. This will include customer service; €30.000, finance; €10.000, insurance; €5.000, warehouse rent; €20.000 and other personnel costs; €10.000, adding up to €75.000 on a yearly basis.

Profits

Putting all these estimations into a calculation gives us an insight into the total possible profits that we will be looking at with our PSS. After 2 years, a trolley will give us a profit of €69,- and a suitcase will give us a profit of €333,-.

However, the yearly costs will have to be subtracted still, so we will have to rent a certain quantity of luggage until we reach the break-even point (profits = 0). Again, an assumption is made that the relation between the number of rented trolleys and suitcases is 1:2. With every trolley that is rented, 2 suitcases will be rented as well. To reach the break-even point, 204 trolleys and 409 suitcases will need to be rented. From this point on, we will start making profits.

Investment

To conclude, we want to make a profit of €250.000 on a yearly basis as a start. This profit can be used to make investments for our company. To make this profit, we will be needing 886 trolleys and 1771 suitcases, which will costs us €487.000. Therefore, we ask for an investment of €500.000 from the investors.

risks

Airport problems

Cancelled flights at Schiphol are a big problem these days. They have to cut flights which isn’t beneficial for us, as people will not be using our services. We can lower this risk by expanding our services to other airports in the Netherlands or even abroad this spreads the risk of less demand from one airport. For example, when Schiphol is reducing the number of flights, we might be seeing more demand for flights from Eindhoven Airport.

Cancelled flights

During the pandemic, flying was not allowed and shut down worldwide. Airports were closed, which is a problem, as this means that there is no demand for our trolleys and suitcases. However, a lot of people spent their holidays in their own country, in a hotel in another city for example. This means that we could provide our suitcases to those who want them and deliver them to their hotels.

Lack of demand

The product-service itself could also be a problem as people find it too expensive or find it easier as they have their own luggage already. This risk can be solved by making the rental cheaper or change the price of the additional services. What could also help is focusing on the ease of use of our system. Users will pay for convenience and luxury which is why people would use our product-service.

Production problems

There are currently numerous of shortages in the world due to a lack of materials. These shortages could play a negative role in the production of the luggage. A bad design could also cause difficulties in and during the production as well as during the use of the luggage. This can lead to malfunction during its life cycles. Although handles and wheels are easy to replace, the shell of the luggage should not fail during active use. To reduce this risk, we decided to use high-end materials (e.g. Curv) to create a premium suitcase. Therefore, it will last longer and when a suitcase breaks, it can fully be recycled or reused to close the loop.

Transportation problems

For the past few years, delivery services like DHL and PostNL have become very busy and overloaded due to Covid. People order a lot of products online these days, which means that deliveries can get delayed. When we want to make use of the services of DHL for example, we might be dealing with these delays as well. However, in our case, delays are a very big problem, because it means that people will not have their luggage ready for their holiday in time. We would need to make an agreement with the delivery service, where they give our luggage deliveries priority. To reduce the risk of delivering the suitcase late we could deliver the suitcase a few days in advance to the customer. Therefore, a small delay is not the end of the holiday.

Optimistic lifecycle

‘Don’t be gentle, it’s a rental.’ We estimate that each trolley and suitcase will have a life cycle of about 2 years. However, we might be too optimistic with this estimation. People really do not care about damage and hygiene when using the luggage, because it is not really their suitcase. Chances are quite substantial that some of our luggage has a shorter lifespan due to the rough use. Therefore, customers have to pay a small deposit when using our service. On the other hand, we really think that our design helps with making the luggage HUFTER-proof. First of all, the use of Curv will extend its lifespan, because this is a very strong and durable material. On top of that, we made the design modular, which means that in case of damaged or broken parts, these parts can easily be replaced. Therefore, everyone will receive a working and clean suitcase for their holiday.