Wednesday, February 28, 2007

45 Days to Launch!

Some of you may know that I am in the process of launching a E-commerce membership based site for Automotive enthusiasts. The unique factor for our site is that we will be essentially selling parts for our cost or close to it...In the automotive aftermarket there is a lot of price gouging so a typical e-tailer will make 10-15% on a product. When all is said and done and w/ CC fees customer acquisition and customer retention cost you end up at like 7%.

Not so hot to say the are goal was to simplify a problem for most of our target audience 17-30yr Males. PRICE!PRICE!PRICE! they will hunt through forums dive through ebay and scour thru hundred's of online choices to get the proverbial "Hook Up" . Our audience is only loyal to one thing price.. I think that they are young in their consumer experiences and haven't come to other value added differences as deal changers for them in their buying habits.

So I thought to myself how can we solve this problem...and were there examples of retailers that have solved it. Costco was the first thing to came to made sense we have relationships w/ the biggest distributors in the country all who drop ship from multiple whse's across the country.

What sets us apart from other online retailers is the fact that not only do we sell the best in performance parts for all late model imports (Asian/European) but we carry all OEM (Original Equipment Manufacturer) parts...basically parts you can get from the dealer. So a member can get anything for his car from a power steering pump to a high end turbocharger kit.

Our pricing will be lowest prices found online period. This will allow members for $9/month for 1 year contract or $99 up to have access to our wholesale pricing. Of course our main revenue generator will be from the recurring billing model. So it is key that we gain traction as soon as possible.. our goal is to sponsor between 35-45 car community's . Our goal is to have the users drive this site..we will giving away free memberships to highly active users in each community to openly discuss w/ the community the pros's and con's of our service.

Also instead of offering $5000 shopping spree ...which we originally thought of but then reconsidered it due to the fact that we might lose our identity w/ that promotion. That got me thinking on what we can do to show people what we are about without becoming members. My answer thanks to some surfing on Me.dium was a site called Woot! . They sell one thing a day for amazing prices but have a platform where the community really drives the site. We are going to be creating "vertical woot's" for our communities i.e Honda/Subaru/Nissan/Toyota etc...

Once we have gotten a chance to let people see what we are all about we have instituted a member referral system that will let members refer friends and family and get bonus points towards future purchases.

For those of you who are not familiar w/ the Automotive Aftermarket Industry it is a $30 Billion Industry.. and the Sport Compact Market is $6 Billion market and growing at 10% rate a year.

I have been in this industry for the last 6 years and the company I left last year has annual sales of $10 million in a very targeted niche market.

In the next couple of weeks I will reveal the name of the site and updates on the progress of the web development.

P.S Another company who is using a business model similar to us is CFares an online Air Travel site that has recently launched.

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