Website Closers® presents an eCommerce Business that operates 3 Private Label Brands in the booming Automotive After Parts Market. The industry continues to grow in a nation where the auto reigns supreme. Having operated for a decade, the company has built up a tremendous following for the auto parts and components they sell among multiple sales channels, from their branded website to marketplace sales on Amazon, eBay, Etsy, and Walmart.
The brands have benefitted from very strong customer feedback that has included thousands of product-specific reviews on Amazon and a 99.8% positive feedback rating on the eBay platform. Most of the company’s revenue is generated from its Amazon Storefront — where the company lists more than 35,000+ products for sale. However, sales are also growing across the other channels, giving the company the ability to be a significant long-term player in this high-demand niche space.
With 3 separate brands under one roof, management benefits from an experienced virtual team that handles daily operations, customer service, and the fulfillment of wholesale orders. This has given the current ownership the ability to focus on overseeing the operations of the 3 brands while implementing strategies to grow each one in the future.
A key value driver in this business has been the very wide variety of products being offered, ensuring that whatever a customer may be looking for, they can find it. This also reduces risk on the company by lowering product concentration. They now sell 45,000+ SKUs but could easily raise that to 80,000+. These products are ordered directly from their suppliers and then sold under the company’s registered brands.
The automotive aftermarket industry is only projected to get stronger. With an estimated 278 million personal and commercial vehicles registered to drivers in the U.S. and the number of registered vehicles increasing by 4.6% a year, car ownership remains the main form of transportation in the country, and eCommerce shops have taken full advantage of this by making available parts that people want to improve how their cars run, or how they look. Today, customers can select what they want and get quick deliveries, which is why the automotive aftermarket industry is projected to hit $559.9 billion by 2030.
This satisfies the public’s desire to select for themselves the look, style and quality of the parts they want to enhance their vehicle. Manufacturers are responding by creating technologically advanced replacement part that ensure the vehicle’s performance will get even stronger. This has given the company very solid advantages moving forward.
The Customer Base
The company’s 3 brands have captured key segments of this profitable market, including individual car owners for DTC sales, and B2B accounts from repair and body shops, and smaller companies that purchase used vehicles to fix and flip them.
Those B2B accounts have become strong repeat customers with a high order value, coming back to the company for multiple purchases. While individual car owners tend to make repeat buys less frequently, the company is using its digital marketing tools to keep expanding its customer base, and those strong reviews on Amazon and eBay are serving as great advertisements for the superior quality of their products.
With an Average Order Value of $75, their diverse product selection has enabled the company to maintain steady, healthy sales year-round, with a low concentration on product sales. The company is not reliant on a small handful of products to drive sales and enjoy regular purchases across literally thousands of individual SKUs.
This also represents one of the most significant ways for this company to scale in the future. Their product offerings could easily be expanded to include more SKUs in additional high-demand verticals including engine and mechanical parts, and new and innovative body parts.
Key Marketing Tools
How do three separate brands across multiple sales channels connect with so many customers, both DTC and B2B? Organic traffic to their websites keeps expanding courtesy of the SEO tools available on their third-party marketplaces, which continuously help to direct customers to their shops.
They have a content creation strategy that includes weekly posts on their social media platforms, and the advantage of 200,000+ subscribers in their email database for upsells and cross-sells, particularly if the company continues to introduce new SKUs.
These tools are giving the company 300,000+ unique monthly page views, while their customer base is also getting expanded through a PPC ad campaign run on Google and Amazon, and promotional listings on their eBay shop.
These tools are directing more customers to their website, and while their Amazon store has generated most of their sales in the past, a much higher share of their gross profits is projected to be spent on their website by the end of 2023.
One of the biggest advantages for a buyer is the reliable and experienced team this business has, which includes a full-time warehouse assistant who manages returns, inventory, packing, and shipping. A large team of virtual assistants handles the other aspects of this business.
Those virtual employees include a full-time team lead and order management associate, three workers who handle customer service, three more who supervise order tracking, 16 who handle listings and perform data entry, and six employees who keep track of product pricing.
With 120+ customer service contacts coming in every day and the company now shipping up to 100+ parts daily, that skilled team enables the company to maintain a high level of customer satisfaction that recently increased their Repeat Customer Rate for DTC sales by 15%.
Products are shipped through a hybrid model, with 20% of sales coming from parts the company stocks in its 1,000-square-foot warehouse. They maintain up to $200,000 worth of inventory to keep up with incoming orders and hold inventory that is returned to them so it can be refurbished to resale condition.
Scaling three separate brands can get easier in multiple ways, including by utilizing Fulfillment By Amazon in the future, optimizing their website for popular keywords related to auto parts, and directing their marketing to retailers within specific niche spaces. Expanding their SKUs would also drive sales considerably higher.
The company has a particularly bright future because they have a long track record of building brand recognition, a team that expertly manages all sales to the customers’ satisfaction and having built up customer loyalty. This company is a fast-driving operation waiting for an ambitious buyer to scale it.
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