Integrated case: selling directly to overseas consumers

Lesson 18 · Integrated case · 1 / 19

Selling direct: the US$29 tumbler

One product, three channels, one conditional answer

Purpose: frame the lesson as a decision, not a success story. Say clearly that the team and all figures are fictional. Ask students to note the first number they would want before spending money. Misconception to avoid: a case is a success story. Next: the opening vote.

Opening question · 2 / 19

Marketplace tomorrow, or your own store in six weeks?

• US$29 with free shipping
• Goods cost US$7.40
• No factory and no store
• Six months of fixed costs

Purpose: surface intuitions before teaching. Take a vote and two reasons. Misconception to expect: the cheaper channel is the better channel. Transition: the answer depends on the form and the full ledger, not on the platform fee alone. Ask: which channel would you choose, and what would you need to know?

Learning objectives · 3 / 19

By the end, you can...

• Classify the launch by B2C form.
• Run the startup checklist and name the weakest link.
• Test mobile-first with three measurable requirements.
• Diagnose a funnel and write a conditional recommendation.

Purpose: make the assessment visible. O1 is tested by Q1, O2 by the checklist discussion, O3 by Q2, and O4 by Q3–Q5 plus the memo. Transition: start with the form because it fixes the revenue logic. Ask which objective feels least secure. Misconception: objectives are topics to cover.

Concept 1 · Operating form · 4 / 19

Five B2C forms, one direct seller

• Direct: own goods, earn margin.
• Intermediary: match buyers, earn commission.
• Advertising: sell audience attention.
• Community: monetise shared interest.
• Live: sell through real-time content.

Purpose: establish the classification before channels. Emphasise that the case is a direct seller because it owns inventory. Ask which form a marketplace itself uses; it is an intermediary, but its sellers are not. Common error: calling every online shop a platform. Transition: the channel decision comes next and does not change the form.

Concept 1 · Channel choice · 5 / 19

Same seller, two storefronts

Purpose: separate commission from total cost. Ask which side has the lower variable cost and which has the lower fixed cost. Misconception: the no-commission option is cheaper; acquisition and fixed costs can erase the saving. Transition: whichever storefront is chosen, the phone screen is the first constraint.

Concept 2 · Mobile-first · 6 / 19

Three tests, not an app project

Purpose: convert §2.2.5 into checks students can run. Walk through a phone screen in order: first screen, checkout, creative. Ask which test fails most often in their own shopping. Misconception: mobile-first means an app. Transition: a mobile page that passes the tests still needs an offer that converts, which the funnel measures.

Concept 3 · Measured funnel · 7 / 19

Five observable stages

Purpose: give one shared dataset for the lesson. Read each arrow as a rate with its denominator. Point out that the textbook funnel is broader; this is a measurement version. Ask where the biggest loss is in absolute terms. Transition: the next slide charts the rates so the weakest stage is visible. Misconception: more stages automatically means a more accurate funnel.

Concept 3 · Conversion · 8 / 19

Where the funnel leaks

Purpose: locate the constraint with numbers. Bar length is volume; the bracket is the conversion from the previous stage, so each number has a different denominator. Ask whether the 2.4% visit rate is a creative problem or a market problem; you need the channel split to decide. Transition: before fixing traffic, check whether each order contributes. Misconception: the return bar is another funnel step in the same direction.

Concept 4 · Unit economics · 9 / 19

Where the US$29 goes

Purpose: make the cost structure concrete. Add the six lines to 22.75 and note the remaining 6.25 before returns. Ask which line the team can move without hurting conversion. Misconception: goods is the only real cost; acquisition is the second-largest line here. Transition: the quote slide turns this into the pricing rule.

Concept 4 · Pricing · 10 / 19

Free shipping is a price decision

• Price from the full ledger, not from goods cost.
• State the delivery promise with the price.
• Returns are a cost line, not a surprise.

Purpose: correct the most common pricing intuition. Ask why sellers still advertise free shipping; the answer is conversion, not cost. Misconception: free shipping means the platform pays. Transition: delivery leads directly to the fulfilment choice.

Concept 4 · Fulfilment · 11 / 19

Parcel or overseas warehouse?

Purpose: show that a per-order saving can hide a stock risk. Ask what happens to the saving if a quarter of stock is written off; it needs about 2,056 orders to recover. Misconception: the warehouse is always cheaper. Transition: even a good fulfilment choice fails if returns are not designed.

Concept 4 · Returns · 12 / 19

Prevent first, then remedy

Purpose: distinguish prevention from remedy. Ask which measure addresses colour mismatch and which addresses a damaged lid. Misconception: refund-only is prevention. Transition: returns feed the repurchase calculation, not just the cost line.

Case · Teaching case · 13 / 19

The US$29 launch

• 684 orders from 1.2 million impressions
• Contribution 6.25 before returns, 5.71 after
• Warehouse saves 0.90 but ties up 7,400
• Own site needs about 2,195 orders a month
• All figures are teaching arithmetic

Purpose: apply the whole chain to one dataset. Remind students the case is fictional and the numbers are not a forecast. Ask which single number they would verify first in the real world. Transition: the scenario cards show how the answer changes. Misconception: the 684 orders are a forecast rather than a simulation.

Case analysis · 14 / 19

Three scenarios, three answers

Purpose: show that the recommendation is conditional, not universal. Ask what evidence would move a group from base to own site. Misconception: one scenario is the right answer for every seller. Transition: the misconceptions slide retires four claims that block this reasoning.

Common misconceptions · 15 / 19

Four claims to retire

• B2C means opening a store.
• Mobile-first means building an app.
• More traffic fixes a weak funnel.
• A positive contribution means profit.

Purpose: consolidate the corrections. For each claim, point to the slide that refutes it and ask for a counter-example from the case. Common error: treating contribution as profit. Transition: the activity makes students produce the numbers themselves.

Classroom activity · 16 / 19

Build the launch memo

Purpose: turn analysis into a decision document. Circulate and check denominators and double-counted returns. Require every group to read its if-then sentence aloud. Transition: the quiz checks the same arithmetic and concepts individually. Ask each group to state its benchmark before the rate. Misconception: more traffic is the default fix.

Self-check · 17 / 19

Five questions

• Q1 form · Q2 mobile-first
• Q3 funnel rates · Q4 net contribution
• Q5 warehouse evidence

Purpose: individual check of O1–O4. Do not read answers aloud; ask students to note which question felt uncertain. Q4 is the arithmetic most often missed. Transition: the summary returns to the opening vote. Misconception: the quiz rewards memorised definitions.

Summary · 18 / 19

What you can now do

• Classify a B2C launch by ownership and risk.
• Test mobile-first with three requirements.
• Locate the leaking funnel stage.
• Write a conditional channel recommendation.

Purpose: close the loop with the opening vote. Ask who changed their choice and why. Re-state that the figures are teaching numbers. Transition: sources and reading. Misconception: the course is a list of definitions to recite.

Sources & next · 19 / 19

Sources and preparation

• Textbook §2.2–2.2.6; §3.1.1, §3.3, §3.4.1.
• Case and ledger figures are a teaching simulation.
• Next: comparing cases with a consistent scope.

Purpose: make the evidence boundary explicit. Remind students that no real seller's costs or platform data are disclosed. Point to the reading for §2.2.5 and §3.4.1. Transition: Lesson 19 turns the same discipline on case comparison. Ask: which source would you check first? Misconception: a company page proves market share.