High-Performance Automotive Parts and Accessories Business: No SKU Concentration Risk Drop Ship Model with Low Operating Expenses.
This eCommerce brand is focused on the performance modification of cars and trucks and has become a go-to marketplace for all things mod with an extensive customer base, strong cash flow, a solid reputation for world-class customer service, fast shipping, and more than 170,000+ SKUs drop shipped from multiple suppliers directly to the customer.
OPERATIONS
Operating in evergreen and recession-resilient industries, this eCommerce brand keeps its edge by offering an array of auto parts that are in high demand amongst a car-dependent customer base. The company’s products include parts for brakes, exhaust systems, gauges, belts, and fluids, just to name a few, and are wildly popular with do-it-yourself (DIY) customers.
All products are ordered through Amazon and are fulfilled directly by the supplier, which ships the items straight to the customer. This means the company holds zero inventory and pays no fulfillment or storage fees to Amazon. With no inventory to store and no warehouse needed to store it, working capital requirements are non-existent, and overhead expenses are minimal.
MARKETING AND KEY METRICS
This company could benefit tremendously from a digital marketing plan, something the company hasn’t utilized so far, relying instead on price point alone to drive sales. Considering their already impressive reach, scaling the business through a Business Facebook page, Instagram account, and even a DIY-catering blog could be tremendous.
This eCommerce brand generates 99% of sales via the Amazon platform. The potential growth of the company is limitless, and the organic traffic opportunities available through further outreach speak to that. The use of paid media could help grow sales on both the company’s Amazon platform and its website.
With over 170,000 SKUs available and an average order value of $197, their sales remain consistent throughout the year. Their top selling product represents just 1.7% of total sales with no hero SKUs, leading to massive sales diversity and extremely low risk.
Their customer base spans across all age groups, races, and income levels – anyone who drives a car and needs parts for it.
BUSINESS MODEL & RESOURCES NEEDED
This is a hands-off business for the Seller, with all customer service duties outsourced to VAs. There is also one General Manager that oversees all daily management activities.
THE INDUSTRY
The global market for auto parts surpassed $390 billion in 2020 alone, driven by the desire among auto drivers to enhance their vehicle performance in terms of sound, speed, appearance, and safety. Environmental rules regulating noise emission levels as well as air pollution standards are also contributing to rising auto part sales across the country.
OPPORTUNITIES TO SCALE
The company’s already impressive reach could be scaled up with a Business Facebook page, an Instagram account, and a DIY-catering blog. This eCommerce brand can easily be expanded with new and complementary categories to its existing products, such as service, installation, and maintenance, among others. The brand’s low-risk drop-shipping model enables rapid scalability with minimal infrastructure requirements.
Asking Price: $1,850,000
Gross Income: $9,197,157
Cash Flow: $534,052
Year Established: 2017
Employees: 1
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