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The industrial and commercial activities which Mac's Models <br />proposes on this site are as follows: <br />1. WAREHOUSING OF HOBBY MERCHANDISE FOR DIS I'RIBUTION <br />In recent years, Mac's Models has been pursuing the idea of <br />becoming a distributor of hobby goods. Having our own on <br />wholesale company would allow us to offer more comp- <br />etitive pricing in the retail and mail order portions of our <br />business, as well as enhance our completeness of inventory, <br />and build business relationships for our proprietary line. <br />Many businesses in our industry are operated in this <br />fashion. We already have distributorships of several im- <br />portant lines of hobby gear. <br />2. LIGHT MANUFACTURE AND ASSEMBLY OF A PROPRIETARY <br />LINE OF HOBBY ACCESSORIES. <br />Three years ago we incorporated a second small business <br />which repackages and performs some light assembly of our <br />own line of hobby accessories. This corporation currently <br />requires 1,000 sq ft of space for operations. <br />3. INDOOR RECREATIONAL AREA - RADIO CON'T'ROLLED CAR <br />TRACK <br />It is our desire to install an offroad racing facility. In order <br />for us to research and develop our proprietary line, we need <br />constant access to all of the latest gear, and also access to an <br />area in which these items can be tested under realistic <br />racing conditions. We also propose to supply rental and <br />demonstrator vehicles. An on site operating Radio controlled <br />car track will also greatly enhance retail sales and service. <br />One of the necessary components of the car track will be a <br />pit area where technicians and contestants will be provided <br />with space to tune their vehicles. <br />4. UPS SHIPPING MAIL ORDER BUSINESS. <br />Four of the last ten years, Mac's Models has operated a <br />nationally advertised mail order outlet for hobby <br />gear. The margins in this particular merchandise are very <br />poor, so it is important that manufacturing, wholesale, and <br />retail (both local and mail order) interact organically to give <br />the proprietor the best fill rate possible with available <br />resources. Due to our national mail order advertising, Mac's <br />Models regularly draws customers from not only outstate <br />Minnesota, but from the entire five state area and points <br />beyond. Since 1984 mail order has accounted for 50% of our <br />total gross sales. <br />Page 34 <br />