Question 1
9 marksText 2 — Cindermoor Stoves Ltd
Cindermoor Stoves Ltd sells wood-burning stoves. It has one showroom in Harrogate where around 30 stoves are on display and two are lit every day. Sales staff are trained to demonstrate how each stove works and to advise customers on the right size of stove for their room. Stoves cost between £900 and £2600 and most customers also pay for installation by the company's own fitters.
In 2022 the business launched a website so that customers anywhere in the UK can order stoves online. The owner, Nadia Forsyth, has spent money on security software and on training two employees to update the site. Delivery is expensive because each stove weighs over 90 kg, and processing returns is costly. Nadia has noticed that online customers often ask questions by e-mail before they buy.
Nadia is now thinking about how the business should sell its stoves in the future.
Table 2: Cindermoor Stoves Ltd revenue, 2022–2024
| Year | Revenue from showroom sales (£) | Revenue from website sales (£) |
|---|---|---|
| 2022 | 486 000 | 54 000 |
| 2023 | 462 000 | 91 000 |
| 2024 | 440 000 | 135 000 |
State one method of selling, other than face to face selling.
Explain one way in which using e-commerce can increase the costs of a business.
Using Table 2, calculate the percentage change in Cindermoor Stoves Ltd's revenue from website sales between 2022 and 2024.
Answer: ............................ %
Analyse one benefit to Cindermoor Stoves Ltd of continuing to sell its stoves face to face in its showroom.