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J B C Smoke Shop


Appendix A - Networking Promotional Program

General

The concept of the Networking Promotional Program (NPP) is to reward customers for helping to promote our website. It may also allow customers, who are buying only one product, to easily be persuaded to purchase other products as our product line grows and develops.

Level One

The customer buying the products will be considered level one. They will receive, with their first order, a laminated card with the following on it:

  1. Their name and address
  2. Their email address
  3. Their account number
  4. Our website address, email address, and other identifying information

For every purchase that the customer makes, they will receive product bonus points. For example, for every carton of cigarettes purchase, they will receive one bonus point.

These bonus points can be accumulated to purchase products with. For example, a carton of cigarettes can be purchased with 20 bonus points.

In other words, for every 20 cartons of cigarettes a customer buys, they will receive a free carton.

Level Two

The customer will also receive a dozen or more cards with the same company information, but with another account number on it. This account number will be linked to the initial customer's (level one) account number. For every carton of cigarettes that this customer purchases, the level one customer will receive a bonus point.

After this customer places their first order, they will become a level one customer. However, the initial level one customer will continue to awarded bonus points for a lone as this customer purchases products from us.

The way this works is that the level one customer does not have to buy 20 cartons to get a free carton. All they need to do is get 10 friends to buy 2 cartons per month and the level one customer will receive a free carton per month.

Level Three

The level two customers will receive the same deal as the level one customer, in essence becoming level one customers themselves. However, the initial level one customer will continue to benefit. For every level two customer that the new level one customer gets to buy products, the initial level one customer will receive bonus points.

EXAMPLE
Level one customer This customer does not need to buy any cigarettes No Points due to no personal purchases
Level two customers 10 customers buying 2 cartons per month avg. 20 points
Level three customers 50 customers buying 2 cartons per month avg.
(10 level two times 5 each)
100 points
Total monthly points 120 points

This would enable the level one customer, without buying any cigarettes, to get 6 cartons of cigarettes for FREE every month for getting J B C Smoke Shop 60 new monthly customers.

Potential

The potential for this program is that if we get 10 customers to be the level one customer as above, we would have 600 customers and we would be selling 1200 cartons per month with a projected gross profit of $6,000 per month.

We could conceivably have at least 1,000 other customers in varying degrees of the program buying 2 cartons per month selling 2,000 cartons per month here with a projected gross profit of $10,000 per month.

This promotion, within 3 - 6 months, could be producing $16,000 in gross monthly profit.

Recent disclosures by other cigarette websites suggest the average customer buys 4 cartons per month, in which case we can double these profit projections, giving us a gross annual profit of $ 384,000. WOW!


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Prepared By: Matt Scofield
September 2000