BradenEvans

Hi everyone,

My name is Braden and I have used many different online stores for purchasing after-market products (Such as 4WheelParts, Extreme Terrain, Amazon, etc.). I've had the chance to speak with other off-road enthusiasts and ask them what they do with the old parts that they replace with new ones. This was the main consensus:

-Throwing the parts away
-Giving them away
-Keeping them in the garage
-Trying to sell them online through ebay, craigslist, etc.

There seems to be a lot of waste that goes on with buying after-market products, and so these are my questions:

If there was an online store, where you were able to trade in your used parts you plan to replace, and receive a discount/store credit towards your new product, how likely would you be to use this store over your current buying methods?
What do you like about this/not like about it?
If you don't like it, what would you change about it?
What features would YOU personally like to see in the store?

Thank you for your time everyone I really appreciate it!

2MchFun

Howdy neighbor! That's a pretty good idea. I would definitely consider using a site like that.

resharp001

The biggest issue I could see with something like that is how would you get all your old parts to the store if it was not local. It costs so much for a normal person to ship items that it would likely eat most of any credit someone would get. A lot of these items are big and bulky. Also, why would the store want all my old parts? If they have any value, I've likely sold them. It reminds me of a shop generally in this area that posts up bumpers, hood, and the like, and their pics show dozens upon dozens of these items stacked up that had been taken off new rigs.

Just thinking out loud here....

Also, there seems to be such skinny margins on parts. Giving a credit seems like a loosing model, and something that would just eat in to the small margin that exists on parts sales.

BradenEvans

Thank you for your reply and thoughts. Hopefully I can clarify some questions you had. To address your thoughts on shipping and eating away at store credit, the store would cover the shipping costs.

Also, the main reason this store would want your parts is so that they can provide you with an instant credit towards products you want to buy. Therefore hopefully taking the burden off you trying to sell items yourself.

The margins would be smaller than a normal retail store. Given what I have said so far, would you be a customer of this? Would you use this over how you currently buy your products? Thanks again for your time I loved your response.

nthinuf

Many of the online vendors and site sponsors we use already have relationships with the various mfg's, and offer reduced pricing and/or forum discounts. I imagine that people would want you to match whatever prices these other vendors are offering. Especially since they are being forced to turn around and make purchases from you.

You might also want to look at a 'core charge' or way to ship the new parts and let the customer send the used parts after install.

BradenEvans

Thank you for replying, Nthinuf.

The site was acting up so I wasn't able to send this with your quote. To address what you said, our process so far is this:

1. Find a product you want on the store
2. You would tell the store what you have to trade in (For example, a pair of stock headlights for after-market headlights)
3. They would then ship you the product at the discounted rate for that item
4. Once you have received your product, you would have a certain amount of time to install the new product, and ship the old product out at your local Fedex drop off center. (Let's say for example the time period is 3 weeks.)
5. If you fail to ship the product within the allowed time period of 3 weeks, you would be charged the full retail amount.

Does this process seem fairly simple?
Does 3 weeks seem like enough of a time period?
Is there anything you would change about the process if you were a customer?

Please let me know, I am loving this feedback from everyone.

Invest2m4

Maybe on paper there is some logic behind the idea. However, in practice it doesn't work. The stock parts are essentially worthless. The cost to ship them is pretty significant. Are you at all familiar with what the margins are on products sold via resellers? Then subtract the credit card fees. Unless you have $1mm in capital laying around, you won't be buying direct from manufacturers, so you will be using a major distributor. Once you match a major reseller that everyone already uses and then eat a credit card fee, and lastly the shipping fee of the new product, you barely make a dime. So, now that you are not making any money, you are going to issue a dollar credit AND pay to ship stuff that probably will end up at a scrap yard?

You'd be insolvent in a couple months. In 99% of business cases, this approach does not work and there is a good reason. Here is an example to explain why. I'm customer x. I have a set of stock JK control arms and springs that I can't unload on Craigslist for $50. You offer to give me a $50 credit if I ship it all to you on your dime. Now, I really have no interest in packaging all this crap up for $50, so send me a box on your dime. You pay around $100 to ship it back to you. Works for me though. I would like an EVO skid. You can't buy direct, so you have to go through a distributor. Like many manufacturers, margins are low when you don't buy direct. On this deal, you lost around $100. No one is going to take a $50 store credit and buy a $5k lift. This industry is driven by relationships. The guy who is a long-time Northridge4x4 fan is going to take your credit as a way to unload his crap that no one wants and then buy something cheap with it. What he is buying is going to be at a huge loss to you.

BradenEvans

Thank you for taking the time to reply.
I thought of the same issue you addressed when it came to shipping large items such as tires, suspension, fenders, rock-sliders, etc. and I agree that the model would not work by shipping those large items. I then started looking at small items that people upgrade such as headlights, rear lights, differential covers, and other small products that would be cheaper to ship, and focusing on those.

I know that margins are around 20-25% directly from manufacturers, but I have not received quotes from major distributors yet, such as Meyer Distributing.

Black Dog Offroad

I'd be happy to speak with you about my experience starting our online company and share any insights I might have. I spent about a month researching a "trade in plan" but there was no financial model in which it worked. Then again, I may not have exhausted every avenue. Also keep in mind that usually you're working off MAP pricing and not MSRP, then take out CC fees and shipping costs (since end users expect free)... it's a ridiculously competitive market, but fun market!
Good luck!

OverKill

I agree with what the others have said. Assume you make a profit on items sold, what is the plan for the used parts returned? If they can't be moved, you are now stuck the used parts. How are you going to ensure the used parts work? You check them out, cost more money. Don't check them, just doesn't work, you get it back and your reputation is damaged. So in reality, the credit needs to 50% or less the value of the item, probably the correct percentage needs to be 25. Then what is the benchmark for the value of used items? There is not a Beckett for used jeep parts. (Beckett is the monthly price guide for sport cards). Maybe that is what you do, develop a standard pricing system for used parts. On another note, the customer pays full purchase price and when the used items are received a credit is given, kinda like a core.