Ask HN: How could I improve my auto microbusiness?
1 comments
"I run a little micro business, it's not really unique like most people's start ups here" - For every iPad, there's a million small businesses busting a gut and doing something similar to their whole market. So don't worry about uniqueness.
Let me have a crack at your questions:
1. How do I improve my sales when my product and prices are very similar to others? In fact, products are the SAME. Motor oil doesn't change.
A business differentiates itself in one of four ways - product, price, market or service. As a distribution business, you don't have much leeway to change product or price. What about Market - can you specialise in specific brands, a geographic area, or similar? Or Service - what level of service difference can you provide that sets you apart? Could be faster delivery, online ordering etc (I don't know what your competitors are doing, so these are examples not suggestions).
I basically sell by driving around and selling to people, this is extremely inefficient and costs a lot of time and gas, how could I improve this inefficient method of sales?
You need to build referrals. Be asking everyone (or at least, all of your customers) who else they know that you should talk to. Can they make an introduction? Pre-qualified leads are the easiest way to improve sales conversion rates. Close behind is having the clear differentiation from above - "I specialise in quality European parts, and I see you service a lot of quality European cars" is a much better sales pitch than "Do you need any auto parts?".
2. How do I branch out to other mediums, to make more sales?
Can you explain this a little more? I assume you mean selling through mediums other than your own labour. Based on my limited experience in the industry (read: I used to own a car), mechanics don't spend much time online during their day. How do they order at present? It may be that there's no good online provider, but remember that a gap in the market doesn't equal a market in the gap.
3. Do any of you know any wholesalers I could purchase motor oil, fluids, auto parts from?
I don't. You may also need to more specific geographically with that question - are you selling them in the US or Indonesia?
What should be my method of getting wholesaler's contacts? Obviously the middleman keeps this stuff secret.
Firstly, can you order parts direct from the brands (eg, GM, Toyota)? Secondly, have you asked your customers - some of them would have decades of experience, and know a lot of the key players - remember to ask if they know, and also ask 'who they know who might know' because that helps you find out AND gives you a reason to talk to other potential clients.
4. How much experience is "enough" to start being a middleman? When do I know I can take the next step? Right now I'm a simple salesmen. It's teaching some good things about sales.
Write down your business model (not necessarily a plan - just a 1-2 page document that says 'I will buy from X for $Y and sell to A for $B'. I need to sell $Z per month to cover my costs.' Also, understand how cash flow will work - if you have to cover the purchase costs for a long period before your customers pay, it will hurt, especially if you aren't expecting it.
Let me expand that point - if you buy a fuel filter for (making up numbers here) $50 and sell it for $100 then it looks like you made a nice profit of $50, and you can now buy two fuel filters. BUT, if you pay for it in March and your customer pays you in June, then you are out of pocket $50 for three months. That's three months in which you can't use either the $50 you've paid or the $100 you will receive. This is the origin of the saying 'Cash is King'.
5. What things am I missing here? What should I be doing that I'm not?
I think you're asking a lot of the right questions - how can you source the product, differentiate yourself better, and then make sales easier. Once you're making regular sales, you can learn more about efficient customer service - it's easier to sell to an existing customer than find a new one. And be sure to take some time to work out where you want to take the business - do you want a $10K, $100K or $1M business? All of your other decisions stem from a clear vision.
Good luck!
Let me have a crack at your questions:
1. How do I improve my sales when my product and prices are very similar to others? In fact, products are the SAME. Motor oil doesn't change.
A business differentiates itself in one of four ways - product, price, market or service. As a distribution business, you don't have much leeway to change product or price. What about Market - can you specialise in specific brands, a geographic area, or similar? Or Service - what level of service difference can you provide that sets you apart? Could be faster delivery, online ordering etc (I don't know what your competitors are doing, so these are examples not suggestions).
I basically sell by driving around and selling to people, this is extremely inefficient and costs a lot of time and gas, how could I improve this inefficient method of sales?
You need to build referrals. Be asking everyone (or at least, all of your customers) who else they know that you should talk to. Can they make an introduction? Pre-qualified leads are the easiest way to improve sales conversion rates. Close behind is having the clear differentiation from above - "I specialise in quality European parts, and I see you service a lot of quality European cars" is a much better sales pitch than "Do you need any auto parts?".
2. How do I branch out to other mediums, to make more sales?
Can you explain this a little more? I assume you mean selling through mediums other than your own labour. Based on my limited experience in the industry (read: I used to own a car), mechanics don't spend much time online during their day. How do they order at present? It may be that there's no good online provider, but remember that a gap in the market doesn't equal a market in the gap.
3. Do any of you know any wholesalers I could purchase motor oil, fluids, auto parts from?
I don't. You may also need to more specific geographically with that question - are you selling them in the US or Indonesia?
What should be my method of getting wholesaler's contacts? Obviously the middleman keeps this stuff secret.
Firstly, can you order parts direct from the brands (eg, GM, Toyota)? Secondly, have you asked your customers - some of them would have decades of experience, and know a lot of the key players - remember to ask if they know, and also ask 'who they know who might know' because that helps you find out AND gives you a reason to talk to other potential clients.
4. How much experience is "enough" to start being a middleman? When do I know I can take the next step? Right now I'm a simple salesmen. It's teaching some good things about sales.
Write down your business model (not necessarily a plan - just a 1-2 page document that says 'I will buy from X for $Y and sell to A for $B'. I need to sell $Z per month to cover my costs.' Also, understand how cash flow will work - if you have to cover the purchase costs for a long period before your customers pay, it will hurt, especially if you aren't expecting it.
Let me expand that point - if you buy a fuel filter for (making up numbers here) $50 and sell it for $100 then it looks like you made a nice profit of $50, and you can now buy two fuel filters. BUT, if you pay for it in March and your customer pays you in June, then you are out of pocket $50 for three months. That's three months in which you can't use either the $50 you've paid or the $100 you will receive. This is the origin of the saying 'Cash is King'.
5. What things am I missing here? What should I be doing that I'm not?
I think you're asking a lot of the right questions - how can you source the product, differentiate yourself better, and then make sales easier. Once you're making regular sales, you can learn more about efficient customer service - it's easier to sell to an existing customer than find a new one. And be sure to take some time to work out where you want to take the business - do you want a $10K, $100K or $1M business? All of your other decisions stem from a clear vision.
Good luck!
First, I'd like to thank you for taking the time to write such a wonderfully well thought out and helpful post. I appreciate it. On with the post!
>product, price, market or service...can you specialise in specific brands, a geographic area, or similar?
You are providing me with valuable info. Not yet since I have not found wholesalers. Parts are quiet different since they vary from car to car, they're usually sold once someone orders, no mechanic stores parts. What I sell are products that work with any car(oil, lubricants, spark plugs, lights, filters,etc) Stuff for maintenance that wears out quickly. I need to find out what my competitors are doing and provide VALUE, I need to add value to my services.
In this type of business, the customers aren't very loyal. price seems to be the most important thing. Usually, they'll buy from whoever is "there" at the moment offering them. However I have built up a number of people who I have a good relationship with to ensure that they purchase from me. Big shops that are rich are very loyal and won't budge no matter what, they don't care about the prices and they're often rude and will look down on you. I'm still young and this is a good entrepreneurial opportunity, I think. It will teach me skills for future ventures.
>who else they know that you should talk to. Can they make an introduction?
I never noticed this one at all, thanks!!
>"I specialise in quality European parts, and I see you service a lot of quality European cars" is a much better sales pitch than "Do you need any auto parts?".
Hm, so find a niche. This goes back to the need of finding wholesalers. I will definitely do this in the future. But like I said, parts are delivered to order for the most part.
Do you have any suggestion for a good sales pitch once entering? I enter, handshake, speak with the manager and tell him what I sell. I feel like it opens me up to people saying no because its so direct.
>I don't. You may also need to more specific geographically with that question - are you selling them in the US or Indonesia?
Western US. I hoped this HN would be upvoted enough that someone would know, but it seems no one has commented.
A lot of the wholesales are inconspicuous and don't advertise and are usually very hidden.
>Firstly, can you order parts direct from the brands (eg, GM, Toyota)?
Possibly, but they probably require a certain volume. At times, its cheaper to buy from a wholesaler than the main source due to order volume requirements or because the wholesaler can buy so much at a good rate.
>Secondly, have you asked your customers - some of them would have decades of experience, and know a lot of the key players - remember to ask if they know, and also ask 'who they know who might know' because that helps you find out AND gives you a reason to talk to other potential clients.
Hmm, this is good, but doesn't this make me seem incompetent? I have had some suggestions, but when I outright directly ask, "hey do you know any wholsalers" some get reserved and don't want to tell me at all.
Is there a better way to ask that's more subtle?
>Write down your business model (not necessarily a plan - just a 1-2 page document that says 'I will buy from X for $Y and sell to A for $B'. I need to sell $Z per month to cover my costs.' Also, understand how cash flow will work - if you have to cover the purchase costs for a long period before your customers pay, it will hurt, especially if you aren't expecting it.
Hm, I will write one. I usually get paid in cash, and if someone doesn't pay they usually give it to me the second day. I should work more on my accounting skills.
>This is the origin of the saying 'Cash is King'.
Very very good point. I should consider the opportunity cost of receiving something that's not liquidated. I do occasionally get checks but would rather not receive them.
>I think you're asking a lot of the right questions - how can you source the product, differentiate yourself better, and then make sales easier.
Well, thank you! I'm certainly learning a lot from you.
>Once you're making regular sales, you can learn more about efficient customer service - it's easier to sell to an existing customer than find a new one. And be sure to take some time to work out where you want to take the business - do you want a $10K, $100K or $1M business? All of your other decisions stem from a clear vision.
I definitely want to expand, but I'm sure that one cannot make a huge amount of money from selling things by traveling like this.
Usually the profit margins are 50 cents to 5 dollars max since the middleman gets his cut. They're often in the lower 2 dollar range. Profits are small!!! Car parts yield more, but I do not sell them yet. For example, a filter will yield a few dollars in profit.
Thanks a lot for taking the time to write that.
By the way, I'm a bit new hear, I already searched+googled and found no answers.
1. How do I know when I've received a reply? 2. Is it possible to delete this thread later on? I've said somethings that are private.
>product, price, market or service...can you specialise in specific brands, a geographic area, or similar?
You are providing me with valuable info. Not yet since I have not found wholesalers. Parts are quiet different since they vary from car to car, they're usually sold once someone orders, no mechanic stores parts. What I sell are products that work with any car(oil, lubricants, spark plugs, lights, filters,etc) Stuff for maintenance that wears out quickly. I need to find out what my competitors are doing and provide VALUE, I need to add value to my services.
In this type of business, the customers aren't very loyal. price seems to be the most important thing. Usually, they'll buy from whoever is "there" at the moment offering them. However I have built up a number of people who I have a good relationship with to ensure that they purchase from me. Big shops that are rich are very loyal and won't budge no matter what, they don't care about the prices and they're often rude and will look down on you. I'm still young and this is a good entrepreneurial opportunity, I think. It will teach me skills for future ventures.
>who else they know that you should talk to. Can they make an introduction?
I never noticed this one at all, thanks!!
>"I specialise in quality European parts, and I see you service a lot of quality European cars" is a much better sales pitch than "Do you need any auto parts?".
Hm, so find a niche. This goes back to the need of finding wholesalers. I will definitely do this in the future. But like I said, parts are delivered to order for the most part.
Do you have any suggestion for a good sales pitch once entering? I enter, handshake, speak with the manager and tell him what I sell. I feel like it opens me up to people saying no because its so direct.
>I don't. You may also need to more specific geographically with that question - are you selling them in the US or Indonesia?
Western US. I hoped this HN would be upvoted enough that someone would know, but it seems no one has commented.
A lot of the wholesales are inconspicuous and don't advertise and are usually very hidden.
>Firstly, can you order parts direct from the brands (eg, GM, Toyota)?
Possibly, but they probably require a certain volume. At times, its cheaper to buy from a wholesaler than the main source due to order volume requirements or because the wholesaler can buy so much at a good rate.
>Secondly, have you asked your customers - some of them would have decades of experience, and know a lot of the key players - remember to ask if they know, and also ask 'who they know who might know' because that helps you find out AND gives you a reason to talk to other potential clients.
Hmm, this is good, but doesn't this make me seem incompetent? I have had some suggestions, but when I outright directly ask, "hey do you know any wholsalers" some get reserved and don't want to tell me at all.
Is there a better way to ask that's more subtle?
>Write down your business model (not necessarily a plan - just a 1-2 page document that says 'I will buy from X for $Y and sell to A for $B'. I need to sell $Z per month to cover my costs.' Also, understand how cash flow will work - if you have to cover the purchase costs for a long period before your customers pay, it will hurt, especially if you aren't expecting it.
Hm, I will write one. I usually get paid in cash, and if someone doesn't pay they usually give it to me the second day. I should work more on my accounting skills.
>This is the origin of the saying 'Cash is King'.
Very very good point. I should consider the opportunity cost of receiving something that's not liquidated. I do occasionally get checks but would rather not receive them.
>I think you're asking a lot of the right questions - how can you source the product, differentiate yourself better, and then make sales easier.
Well, thank you! I'm certainly learning a lot from you.
>Once you're making regular sales, you can learn more about efficient customer service - it's easier to sell to an existing customer than find a new one. And be sure to take some time to work out where you want to take the business - do you want a $10K, $100K or $1M business? All of your other decisions stem from a clear vision.
I definitely want to expand, but I'm sure that one cannot make a huge amount of money from selling things by traveling like this.
Usually the profit margins are 50 cents to 5 dollars max since the middleman gets his cut. They're often in the lower 2 dollar range. Profits are small!!! Car parts yield more, but I do not sell them yet. For example, a filter will yield a few dollars in profit.
Thanks a lot for taking the time to write that.
By the way, I'm a bit new hear, I already searched+googled and found no answers.
1. How do I know when I've received a reply? 2. Is it possible to delete this thread later on? I've said somethings that are private.
I run a little micro business, it's not really unique like most people's start ups here so be nice.
I sell Auto maintenance supplies like fuel filters, air filters, break and transmission fluids to mechanics. I buy these from a middle man who buys them wholesale from somewhere. Things are going ok, I mean I don't make a lot of money, But I think I'd be able to make more money being a middleman, which I plan to do soon. Is this a terrible microbusiness? What do you think of it?
1. How do I improve my sales when my product and prices are very similar to others? In fact, products are the SAME. Motor oil doesn't change.
I basically sell by driving around and selling to people, this is extremely inefficient and costs a lot of time and gas, how could I improve this inefficient method of sales?
2. How do I branch out to other mediums, to make more sales?
3. Do any of you know any wholesalers I could purchase motor oil, fluids, auto parts from?
What should be my method of getting wholesaler's contacts? Obviously the middleman keeps this stuff secret.
4. How much experience is "enough" to start being a middleman? When do I know I can take the next step? Right now I'm a simple salesmen. It's teaching some good things about sales.
5. What things am I missing here? What should I be doing that I'm not?