Material first published on Diya.Business
For many entrepreneurs, the pandemic has become a challenge: someone has moved an existing business online, someone decided to launch a new “startup”, and someone just realized that now online has a “finest hour”, implying rapid growth. When better than in a crisis to use opportunities for growth?
This article will be useful to those who have taken the coronocrisis as a chance for success and are faced with the challenge of - start a business from scratch and build an online sales process.
Market analysis and niche selection
The first thing to study and analyze before launching a business online is the market. It is important to understand what is in demand, is being sold now and has prospects in the future.
The guys from Ringostat created a dashboard with anonymized data on site visitors and calls from November 2019 to the present day. This data can be trusted because Ringostat is a popular tool for end-to-end analytics, call tracking and telephony, which is used by thousands of businesses.
Based on the figures obtained, along with furniture and electronics, auto parts, accessories, tires and wheels are among the growing topics.
It is noteworthy that the subject of auto parts during the quarantine period not only did not sink, but also showed growth, which is likely to accelerate with the onset of autumn. This is primarily due to the seasonality of the business.
From the point of view of the prospects of this direction, it should be noted the colossal volumes of the market. The number of cars in the world is constantly growing, new car models are released every year, but despite this, the average age of the Ukrainian car fleet, according to various sources, is 19.6 - 23.5 years. In addition, over the past few years, more than 1 million used cars from Europe have been imported to Ukraine. All these cars need repair and maintenance.
If we talk about numbers, then the auto parts market is more than $3 billion in 2019. Of these, $195 million is online sales ($800 thousand per day) and this figure is growing rapidly. For 2020, analysts predict a two-fold increase, and this is already almost half a billion dollars! Note we are talking about the segment of online sales, which today account for only 6.5% of the total market. In the future, the percentage of online purchases will grow, for example, in Europe today up to 20% of people buy spare parts on the Internet, which is almost 3.5 times more than in Ukraine.
Search for suppliers
The next task is to find suppliers who can provide a range that covers the needs of the market in general and your future customers in particular. According to official data, more than 1,000 companies annually import auto parts to Ukraine. Therefore, finding a dozen or even a hundred good suppliers, in principle, is not a problem.
When choosing suppliers, you should pay attention to three criteria:
- Prices;
- Delivery times and shipping costs;
- Features of the return of illiquid assets.
A list of 150+ wholesalers that operate in Ukraine can help beginner sellers .
Features of working online
Today, most of the classic offline stores are more and more like a point of issue of goods than a place where people come to look for auto parts. This is explained not only by the growing online demand, but also by the specifics of the business in this area: it is impossible to store the entire range in stock, because there are millions of items.
As a rule, a person orders a spare part by phone or through a shopping cart on the site. Then he can come to the store to pick up the goods at his own expense or order delivery. That is, today people no longer go to auto parts stores to find the parts they need, instead they come and pick up a pre-ordered product.
But a completely logical question arises - how will a person get to the site to place an order? At first glance, everything is simple - you just need to make a website and run ads. But in reality, this process is overgrown with complexities and nuances, without knowing which it is difficult, and sometimes even impossible, to build a business.
Launching the site and choosing a developer
Let's start by launching the site. Online auto parts stores are different from classic sock and mobile phone stores. The main difference is that the site uses a huge catalog of auto parts with tens of millions of items and tens of thousands of car models.
The range of the average online auto parts store -from 300 thousand unique products. We all understand that developing a store that will have 10 categories and 1000 products, and a store that will have a thousand categories and more than a million products, are tasks of different complexity and cost. Therefore, before creating a site, you need to study all the offers of the developers and choose the best for yourself.
When choosing developers, I recommend paying attention (not only in the field of auto parts) - experience in regular development of projects in your field, willingness to support the project further, experience working with promotion specialists.
A common mistake entrepreneurs make is to solve problems as they come up. In the case of launching an online auto parts store, this mistake can cost a lot of money, because after the development of the site, the promotion specialists will have tasks to change the structure of the site, which the developer may not be able to handle. Therefore, it is better to come to the developer with some more or less intelligible technical task, so that later you do not start “all over again”.
There are no sites that you can forget about the support and development of which immediately after launch. The site generates income, but at the same time it requires investments in support and development - one cannot exist without the other, especially in large complex topics. Therefore, you need a developer with whom you will constantly work.
Develop or rent?
On average, developing an auto parts store costs $5,000 - $15,000 + a $1,000 server per year. Not every novice entrepreneur, and even an existing one, & nbsp; there is an opportunity to invest from 100 thousand UAH only in development, which without advertising will not bring any sales (0 UAH). But this disadvantage can be interpreted as an advantage - due to the high entry threshold, there is no excessive competition.
In addition, a high entry threshold can be bypassed: use ready-made rental solutions instead of investing in development from scratch. Europe and America have been working on this model for a long time - people rent cars, apartments, programs, and this is considered normal.
The advantage of renting ready-made solutions is that you pay a relatively small, ridiculous amount for using a product that costs tens of thousands, plus you get 24/7 support. You do not have a headache about supporting a complex IT product - this is done by specialists. And all this for a nominal monthly fee.
Most likely, you know what a CRM system is - in it you can keep a full record of your customers and it will be much more convenient and understandable than in a notepad or even in Excel. Using such a system costs only 200 UAH per month, and development costs tens of thousands of dollars. But you don't invest in CRM development if you decide to automate business processes in your company. Similarly, in the case of expensive website development, it is easier, more rational and more reasonable to rent a website.
Promotion
In order for customers to appear on the site, it is necessary to promote it. As mentioned above, in the case of an online auto parts store, you cannot solve problems as they come.
Before ordering a site, you must understand how you will further promote this site. To do this, you need to communicate with advertisers and understand how people will get to the site, and what are the requirements for the site. Then, with an understanding of the full picture of “how things should work” you go to the developers. I repeat - it is important that developers do not just "make websites", but also take on further support, preferably not in words, but with examples of working sites.
The developer should be interested in his project being promoted on the Internet, and not just in the portfolio. Otherwise, you will start over again and over time you will end up with a lot of not-so-good sites. But don't be scared! This situation is not limited to auto parts. In any niche, you need to create a good functional website and understand who and how can promote it.
If you need help in creating and promoting an online auto parts store, please contact us! We have been launching auto sites for more than 5 years, setting up advertising and promoting stores in the search.
