Why online selling’s a great fit for automotive entrepreneurs

We might be uncertain whether the big motor manufacturers will stick around in Australia, but that doesn’t mean the whole automotive industry is screwed.

 

When it comes to online shops selling automotive accessories, business is brisk.

 

Figures released yesterday by e-commerce solutions company Bigcommerce shows a boom in automotive businesses using the platform. There are 26% more Bigcommerce-powered stores selling automotive and autocross goods this year than last, and their average revenues have almost doubled since last year, from $12,000 to $22,000.

 

It’s not just tiny businesses enjoying the boom. Companies like Tyres4U, which is the online arm of the company’s largest tyre wholesaler Tyreright, have been charging into the online space.

 

As Tyreright CTO Dominic Byrne recently told SmartCompany, it’s become a necessity.

 

“Members of the auto industry are very big laggards when it comes to adopting new technology,” he said.

 

“When it comes to moving into the digital world, the CEO of the company would probably even classify himself as a little bit of a dinosaur. But he knows we have to be in the digital space and have to be there quickly, or we’ll lose market share.”

 

Wolf4x4, started two years ago by 28-year-old Ashley Gibbons, sells nothing but 4-wheel drive accessories. And while he sells 10% of his goods at trade shows, 90% of his business comes from his website. His sales are up 63% on 2012.

 

Another entrepreneur capitalising on what online can do for his business is Matt Finn, who started selling protective gear and accessories for motorbikes through his business after his brother was involved in a motorcycle accident. His brother recovered, but when Finn realised his brother simply hadn’t been able to afford the expensive prices of protective gear, he saw a market opportunity, and started Finn Moto.

 

He originally had a store on eBay, but switched to Bigcommerce last year after eBay made results no longer country-specific, meaning his store was lost among the thousands of international retailers selling such goods.

 

His sales are up 70% this year, pushing him past a turnover of $200,000. Which isn’t bad considering his shop is essentially a one-man operation.

 

“I design motorcycle clothing, work direct with the manufacturers, and then sell direct to the consumer,” he explains to SmartCompany.

 

He tells SmartCompany that when it comes to automotive accessories, people generally know what they want, and just want to get it as quickly as possible. This could explain why the category works well online.

 

“From my experience, when I go into a shop, the goods are overpriced and they rarely have the stock I need. Of course, they say they’ll order it in. But customers rightly ask why they can’t do that themselves.

 

“The majority of bike riders are switched on. They know what they want, and they don’t need recommendations. And they can see the price differences.”

 

Finn considered opening a brick-and-mortar store when he started his business in 2004, but decided against it.

 

“If I was to go away while running a shop, I’d need to bring someone else gone. That and other things would increase my overheads, and I’d have to pass that onto the customer. My best value guarantee would then go out the window.

 

“This gives me a good combination of work and lifestyle, and helps me put more time into designing the products and expanding the range.”

 

This story first appeared on SmartCompany.

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