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While rooming together at Santa Clara, Amelia and Holly had an idea to start their own company. They had created a novel design for a hoodie that could incorporate graphics of popular mountains, national parks, and outdoor icons such as Half-dome. They wanted to offer a wide variety of designs to as large a customer base as possible, without requiring a lot of investment capital. Thus, they planned to find a low cost manufacturer to produce their hoodie design and hoped to sell them via the web. They found a clothing manufacturer in Korea who agreed to make the designs for them if they would pay cash up- front for their orders and accept delivery in 60 days. After pitching their idea to Amazon executives they agreed to allow them to offer their hoodies for sale through the Amazon web site in exchange for a 10% commission on all sales. Amazon commited that they would wire payment to MSH within 10 days of order shipment. Encouraged by friends and family that their idea was sound and with the manufacturing and sales agreements in place, Amelia and Holly decided to take the plunge and start their company, Mountain Sports Hoodies. They agreed to invest $20,000 each into the business to get things started and to incorporate their business even though this would cost them $2,000 in legal and filling fees up front. Their parents decided to loan the business a total of $40,000 on favorable terms (to be paid back in one lump-sum in 5 years, with no interest.). Since all of their sales would be via the web, they decided they didn't need a store or significant office space, but they would need warehouse space for storage of inventory and prep for shipping to end-customers. Fortunately, Amelia's uncle owned a local furniture store and had extra space in the back that he offered to rent to them at favorable rates ($1000 per month) with no down payments or lease term commitments required. They would make rent payments in advance for each month (i.e. at the 1st of each month), but the rent wouldn't begin until their 1st official day of sales. They decided upon a $90 retail price for their hoodies. They negotiated a supply agreement with their Korean manufacturer for $42 per hoodie, including the shipment costs to their Santa Clara warehouse. In additon to the $9/unit they would pay to Amazon for sales commission, they estimated a shipping cost (from Santa Clara to their retail customer) for each hoodie of $8. This would make the total cost for each hoodie to be $59.00/unit. Excited by their profit projections and the support of Amazon, they began executing on their plans with a target to open their business for on-line sales on April 1st, 2016.