2. 1. Introduction
The purpose of our Internet Parts business is to market and sell Mazda parts and
accessories as a profitable sideline to our main parts operations, and capture some of the
millions of dollars consumers are spending on auto parts online. By being proactive in
our listing and inventory management we can make sure that any idle inventory not
available to return to Mazda is liquidated online. Also, our increased sales will translate
into increased purchasing from Mazda and allow us to maintain a high purchase discount
throughout all of our parts purchases and ultimately hold a higher parts margin across the
board.
Initially, Internet Parts will sell on the following websites:
www.ebay.com
www.amazon.com
www.mazdausa.com
The business will initially be a sub-department of the normal Parts Department at Parks
Mazda in High Point. If sales and profit grow substantially then another business plan
will be drawn up to see if physically or financially separating the business will at that
time make sense.
Internet Parts is physically located at Parks Mazda, and operated from their parts
warehouse.
2. Executive Summary
This will be a different business model completely than the one implemented previously.
That model was focused on sales volume only, with profitability being something that
would be added in at a later time.
This time, the focus is squarely on profitability. Every time an item is sold, processed,
packed, and shipped, we will be guaranteed a satisfactory margin.
The business will be set up simply at first, listing and selling only a few items. It is
completely scalable, however, and hundreds of listings have already been created and are
simply lying dormant.
After the current manager gets comfortable with the process and the pricing, he can easily
reactivate listings and price them again.
Eventually this business will be able to provide approximately 50k in sales and 10k in
gross monthly to the bottom line with very minimal overhead, which represents a realistic
and sustainable long-term expectation.
3. 3. Mission, Strategies, etc. (Company, Strategy and
Management Team)
3.1. Vision
Internet Parts vision is to be a frictionless source of sales and customers that we
would not otherwise be capturing. It will further enhance our online presence and
reputation by providing superior customer service, fast shipping, and low prices.
3.2. Mission
To provide Mazda owners a trustworthy and convenient source of genuine Mazda
parts by reaching them in the spaces where they feel most comfortable shopping.
3.3. Objectives/Goals
The objective of Internet Parts is to start small and gradually increase sales and listing
exposure in such a way that human cost, facility expense, and cost of sale can be
managed effectively and profitably.
3.4. Keys to Success
Keys to success for Internet Parts are:
High Quality Customer Service. In a commodity marketplace where many
participants are procuring their inventories at or near the same cost, and brand
presentation is standardized, differentiation must occur at the point of contact
with the customer.
Value. People shop online because of the real or perceived belief that prices
are lower than traditional brick-and-mortar operations, and the true value
contained in the proposition of home delivery.
Expertise. Many of the top sellers of genuine Mazda parts and accessories
are third-party companies who also offer many other brands. By focusing on
being an actual Mazda dealer staffed by knowledgeable, passionate Mazda
representatives with a verified connection to the manufacturer we can position
ourselves as The Experts.
Consistency. Since many online sellers are here-today-gone-tomorrow
businesses, we can build long-term relationships with customers who will
remain loyal.
4. 3.5. Strengths,Weaknesses,Opportunities and Threats
(SWOTs)
Strengths:
As an authorized Mazda dealer, we have access to proprietary information
and have a direct line to the company.
Experience and knowledge in Mazda parts and vehicles.
Experience in online selling
Access to a strong corporate support team who have many and varied
talents, and can offer help that will lessen the learning curve
exponentially.
Weaknesses
No full-time employees
Mazda ordering and shipping is sometimes not timely
No previous online sales experience for principals
Opportunities
There are a limited number of Mazda dealers actively participating in
online retailing
Some niches such as MazdaSpeed and MX-5 Miatas are particularly
underrepresented
No Mazda dealer is creatively leveraging their position as de facto Mazda
Experts in the marketplace, instead competing on price and continuing to
drive down margins
Threats
Some dealers are so anxious to be in the online space that they sell at cost
or a slight loss, lowering consumer expectations of value and price.
Unhappy customers have tremendous power in these marketplaces, to such
an extent that one negative review or rating can have more impact than
dozens of positive ones, and there is no clear and fair way to mitigate or
change these ratings.
3.6. Strategies
In order to focus the development of the business, the following strategies will be
followed.
Develop repeatable packing and shipping processes that if followed will limit
our exposure to returns, refunds, and mistakes.
Develop a consistent pricing model that ensures profitability.
After an initial period, continually add new listings.
5. As time permits, analyse the market and competitors to identify opportunities
in inventory and pricing.
4. Products and Services
We will offer only Genuine Mazda parts and accessories
We will market the extensive knowledge of our technicians and sales staff
5. Revenue Sources
Internet Parts will generate revenues through the sale of genuine Mazda parts and
accessories.
Based on the two primary websites identified in this business plan, the total expected
annual revenues starting after the first year is $198,000. This projection is a rough
estimate and will depend greatly on the number of listings that are available on the two
websites. Additional revenue can be generated in the future as other services and products
are developed which leverage our core competencies. Mazda accessory sales through the
e-Accessory program will not be forecast because of the newness of the program and lack
of any historical data.
5.1. Amazon
Amazon is expected to generate $112,000 per year in revenues after one year.
5.2. Ebay
Ebay is expected to provide $86,000 in revenue yearly after one year.
6. Future Growth Opportunities
6.1. Non-Mazda Parts and Accessories
Expanding into non-Mazda parts and accessories will be a crucial step in
expanding into a legitimate stand-alone business. Aggressive, creative thinking
and research into suppliers and marketplace trends will allow us to gradually
introduce private-label products that are not available anywhere else and provide
profit margins well over 100%. Establishing a line of products such as these, at
the correct time, will be a priority.
6. 6.2. Non-AutomotiveProducts
Ultimately we want to not limit ourselves to the automotive market at all. We
need to think of ourselves as pure retailers and sell any products that are in line
with our corporate values and image and that we can procure at the right price
levels.
6.3. Video Diagnosisand Installation
Producing short (<5 minutes) videos of the installation of common accessories
and diagnoses of common mechanical problems will both bolster our credibility
and trustworthiness and serve as the linchpins of our SEO strategy by creating a
hurricane of organic links that will skyrocket us to the top of SERP (search engine
result pages). These can be made very cheaply, be hosted online for free, and still
maintain high production values.
7. Marketing Plan
Marketing is often not thought of as critical to selling on Amazon or Ebay, and indeed
one of the huge advantages to those platforms are their enormous advertising coffers and
ability to drive customers to your listings. However, leaving our entire brand presentation
and exposure in their hands is a mistake. Internet Parts will streamline and standardize its
marketing and image strategy to make sure that the customer begins to be imprinted with
a consistent brand. Over time, through phone calls and email marketing, we can establish
ourselves credibly outside of Ebay and Amazon and generate sales in wholly owned
channels, holding much more of the gross. Becoming visible and credible are the two
main goals of our marketing plan.
7.1. MarketAnalysis
Verified sales numbers in online sales within one small segment such as auto
parts and accessories, are notoriously difficult to come by. However, it is widely
believed that total sales are in the hundreds of millions of dollars and rising fast
year-over-year.
7.2. Competition
There are several dozen companies that currently offer Mazda parts and
accessories on Amazon and Ebay, however there are only a very few dedicated
Mazda dealers who are making a push into this space. Quirk Parts, Mastria Parts,
and Rosenthal Mazda are the three largest and most mature players.
7. 7.3. CustomerProfile
Our typical customer is either a new Mazda owner who was not marketed to
effectively at the time of purchase and will spend an average a little over $500 on
accessories for their new vehicle, or an existing Mazda owner who needs a very
specific replacement part.
7.4. MarketSize,Sales& Share Projections
The market size for Mazda parts specifically is not known, but as Mazda
continues to commit to the North American market the overall opportunity will
grow. Our market share growth will be limited by two factors: market demand,
and our ability to provide a high level of service to our customers.
7.5. Strategiesfor reaching orexceeding your targeted sales
levels
Our primary method of gaining new customers for sales will be through listing
exposure on Amazon and Ebay. Secondary methods to gain new customers are
through pay-per-click advertising, SEO strategies, networking, word of mouth,
and pricing incentives.
Repeat business will be earned providing our customers with excellent service,
discount offers, and direct marketing (catalogs, brochures, fliers, and promotional
letters). This will start immediately in the customer cycle, in the packing process,
as every customer will get a flyer telling the story of our company and printed on
the back coupons only good on our own website, where we can capture and track
their evolution as a customer and begin to build a significant database for future
marketing.
7.6. Advertising and Public Relations
The advertising budget will be insignificant in the beginning. Advertising will
consist of flyers sent in packages and cross-promotion within existing corporate
media campaigns.
8. Operations Plan
Internet Parts will operate out of the parts warehouse of Parks Mazda in High Point. If
growth over time necessitates more space it can easily move to larger quarters
somewhere at Parks Mazda or at another Parks dealership or property.
The company’s facility operations expenses can be administered through existing
accounting procedures in order to provide a clear view of profit and loss.
8. All supplies and other expenses will be meticulously documented and accounted for by
whatever means or process dictated by Parks accounting managers.
9. Financial Plan
This financial plan conservatively projects the overall financial expectation of the
business. Although many of the projections are based off historical data and statistical
averages, the projections are merely approximations. The success of this business is
determined by its ability to maintain profitability in every transaction, and not in the
amount of sales volume.
As such, the plan is simple: End free shipping and allow Amazon and Ebay to calculate
shipping to the customer, so that what it costs them is what it costs us and shipping will
simply wash out within a 10% variable area.
List all parts at our cost + 20% markup.
This should provide a situation in where we never lose money in a transaction.
10. Accounting and Inventory Control System
Accounting will be handled by existing Parks accounting personnel until such a time
when growth will provide an avenue for change.
Inventory control will be handled by the principal, who is currently responsible for
overall parts inventory.
11. Conclusion
We believe that due to the resources already committed to the previous incarnation of this
business, it is irresponsible not to try and extract ROI. We have hundreds of listings ready
to be reactivated. We have built a reputable storefront through customer feedback. We
have worked through the issues of payment and ordering. What we have, in actuality, is a
turn-key operation that can be carefully stewarded to immediate profitability and through
the establishment of scalable, repeatable, and accountable processes be a viable long-term
profit center for Mazda, and one day GM parts and accessories as well.
