Bringing the Automotive

Aftermarket to the Customers

•Richard Chow

•Greg Simmonds

•Vincent Ng

•Mike Lewis

www.aftermarketcorner.comwww.aftermarketcorner.com

Market Summary

• Market Past– Originally a disparate network of independently owned and

operated shops and garages (jobbers) who purchased parts from Warehouse Distributors.

– Branded product existed and dominated in traditional aftermarket.

– Traditional Customer: Service dealer "pure traditional"

Market Summary• Market Present

– Lines of demarcation between channels of distribution are fadingand disappearing.

– The markets are resembling one another more and more in all key areas: customers, store design, display, buying practices, packaging, etc.

– Branded product exists in all outlets– Private label is highly prevalent in jobber, jobber/retail

locations...makes them more price competitive– Programmed WD group "private brands" are becoming national

brands...NAPA, Carquest, Auto Value, etc.– Retail chain "private brands" are becoming national brands...Sears

Craftsman, Diehard, etc.

The Market Today - Illustrated

Emerging Trends in the Market

• Customers and Retailers are brought closer together by the Internet

• Fewer and larger operations. • For those that don't grow, more specialized

operations. • More jobber and warehouse failures. • Consolidation among the programmed groups. • Continuation of the retail and traditional markets

"mirroring" one another.

Opportunity Identification

• Canadian automotive aftermarket parts valued at $30.57 billion in 1997 and rose to $38.81 billion in 1999

• Aftermarket parts represents approx. 15% of automotive parts industry

• Do-It-Yourselfers(DIY) vs. Mechanic Installed(MI)

Opportunity Identification(con’d)

• DIY(Do-It-Yourselfers) market has been the most effective for Internet sales

• However, the move from DIY to MI is gaining ground

• Wholesalers have experienced a 25% decrease in the amount in over the counter DIY sales.

Why we expect to capitalize

• MI- Many different MI shops in marketplace Canadian Tire, hundreds of independent garages, service stations

• MI share of market is $2 billion industry

• MI shops have not entered or embraced any e-commerce initiative

How this is done

• Create an Internet portal for the aftermarket car parts community

• Create a website that facilitates B2C and B2B revenue

• Form community of these these independent shops

• Free membership

Website creation

• Build websites for the MI shops www.aftermarketcorner.com/~indycars

• Form community of these MI shops• Our site will consist of

• Discussion boards• Car tips• Industry information• Community of those in the aftermarket business

Internet Portal

• Allows consumers to find the necessary hard-to-find parts on our website

• Allow MI shops to conduct business with warehouse distributors through website

• Memberships• Business community

• Consumer community

B2C and B2B Model

• B2C Model• Consumers can visit site and search database of

member companies• Find virtually any information on aftermarket

industry

• B2B Model• Web portal between distributors and MI shops

E-Business Marketing Strategy and Tactical Plan

Target Market

• Our company’s target market is:

• Do-it-yourselfers.

• Those who prefer mechanic installed services.

• Independent businesses that provide retail products and services.

Positioning

• Our company will present itself as an information intermediary.

• A convenient, dependable and reliable information center.

• We plan to promote ease of use and excellent service, with an online navigational interface and prompt online support.

Product

• For our B-to-C audience:• Visitors can search our database of member

companies.• Free memberships, which entitle visitors to

special promotions.• Bulletin boards divided into interest areas.• Additionally, the site will have articles,

FAQ’s and Tec tips.

• For our B-to-B customers:

• Free web space and design services to post a brochure ware-style website.

• An information bulletin board.

• Once a critical mass of business customer is achieved, we will attempt to consolidate their supply purchase needs.

Price

• Immediate revenue sources will be:• A $50 annual fee for membership.• $300 service charge designing small

brochure-ware sites.• Design services for subsequent website

changes will be charged at $25/hr.• Banner advertising space will be offered on

our site.

Promotion

• Careful planning will be essential when defining the metasearch list.

• Advertising in low-cost, local print media such as Autotrader or Buy and Sell.

• Advertising in Canadian trade publications.

• Trade shows will also be targeted for client prospecting.

Setting the Budget

• Keep enough working capital to cover short-term debtor obligations until steady revenue stream can be developed

• Require enough start-up capital to meet the 1st year’s expenditures without relying on any revenue

• Including initial IT costs, we need at least $60,000 of start-up cash

IT CostSoftware Requirement $13,000

• Adobe Photoshop, GoLive, 3D Studio Max, CorelDRAW, Macromedia Flash, Microsoft Visual Studio, SQL Server, etc.

Hardware Requirement $5,000

• 512MB RAM, 21” Monitor, CD-RW Drive, Photo Scanner

Expenses• Annual Server Lease $12,000• Server Setup Costs $1,000• Freelance Writing $5,000• Freelance Web-Design $3,750• Print & Banner Advertising $9,780• POS & other Promotional $4,890• Travel and Selling Expenses $3,000• Office & General $2,400• Incidentals _$3,000

Total $44,820

Revenue

• Annual Subscriptions $30,000• Month-to-month $9,000• Web Design Revenue $7,500• Additional Server Space $1,200• Affiliate Programs _$1,200

Total $48,900

Profit Projections

Revenue $48,900

Expenses $44,820

Profit $4,080

Questions?