Website Closers® presents a leader in designing and manufacturing aftermarket aero-efficient Performance Wheel Covers for Tesla vehicles. The company’s rims provide incredible value compared to OEM rims, and offer a way for customers to quickly change the look of their Tesla vehicles without a trip to the tire shop and without breaking the bank.
Over 3 years ago, the company was crowdfunded on Kickstarter and Indiegogo, which drove a great fan following. Since then, more than 16,000 products have been sold with excellent margins. The company enjoys a $230 average order value across 9 proprietary SKUs. These SKUs generate repeat orders through replacement kits, evidenced by the brand’s 17% repeat customer rate. In addition, the brand has strong relationships with influencers in the Tesla world and deep relationships with its rim suppliers.
These tire covers conceal existing curb rash, which is common with Tesla wheels due to the aerodynamic design of the rims and tires, and provide efficiency, helping to enhance the vehicle’s battery range. All products are designed and made in the US.
The product range was developed on quality and innovation, and the brand has established itself as authoritative in both respects. The covers are now considered the benchmarks in the market.
All products are manufactured via two major suppliers—an injection molder and a painter. This ensures modular and complete control of the manufacturing process. Orders are placed with both, and they handle shipping via LTL or FLT. Both suppliers and the primary warehouse are based in the Midwest. The company owns the tooling, so the production can easily be moved to a different supplier. All products are manufactured exclusively for the brand, and it does not license any other parties.
Best-selling products are covers for the Tesla Model Y and the Tesla Model 3, accounting for 44% and 32% of sales, respectively.
A 100% stock model is used, and inventory is maintained at two 3PL warehouses. One services the US, and the other handles international orders. Between one and three months’ worth of merchandise is held due to recent material supply shortages, which considerably drove the lead times on plastic resin sourcing. Astutely, the company adjusted order frequency and volume to avoid running out of stock.
Orders for plastic parts are placed every four to eight weeks as they make larger batches, while the painter ships weekly in smaller lots. The owner has negotiated good payment terms of net 30 and net 45.
The digital marketing strategy began with Facebook Ads to create awareness and excitement about the crowdfunding campaigns. The subsequent buzz led to organic growth fueled by social media content creation. Since launching, the brand has used a commissioned YouTube influencer to promote its website and maintain its followers and fan base. In addition, promotions and discounts coupled with Google Ads and email campaigns generate the bulk of traffic. Many YouTubers cover the products for no compensation.
The typical customer is an upper-middle-class Tesla owner. He is a male between 30 and 50 with disposable income but savvy about spending. He puts more value on quality than cost.
The COO, an engineer by trade, almost entirely runs the company. The products are designed in-house by him. The design process of new products is relatively simple and mainly aesthetic now that the attachment system to the wheel is mature and proven. A buyer would need to contract a CAD designer to complete new designs. Tooling build is quoted and handled by the molding supplier.
As successful as the business is, there are plenty of scale opportunities.
The brand is strategically positioned to develop new products on a low-risk base. It has a proven and patent pending mounting system that can be applied to any wheel with minimal R&D. The Tesla brand is still growing, and new models are being added. The Cybertruck, for example, has a tremendous following, and the vehicle is expected to be released with wheel covers only, which the brand intends to execute and lead.
Management has received meaningful feedback about the demand for Model S covers and secondary Model Y and Model 3 versions. An expansion beyond wheel covers is being considered.
Amazon presents an enormous opportunity to boost revenue substantially. Initially, the brand did not launch on the platform because it couldn’t keep up with demand on its website, coupled with material supply shortages. That is no longer the case. The business is setting up Amazon listings this fall, expecting a considerable percentage of sales from the eCommerce giant by spring 2023.
The majority of sales have transpired organically, with minimal marketing efforts. Implementing aggressive marketing on Google, social media, and email would likely show healthy returns. Affiliate and influencer partnerships could prove highly lucrative.
A key selling point of the business is that it is SBA pre-qualified. This allows a prospective buyer to take ownership for as little as a 10% down payment and amortize the loan over many years at reasonable interest rates. Subsequently, capital can be used for mass expansion or other endeavors.
The company operates profitably in the EV aftermarket space, which is consistently growing and where it has established a robust presence. Furthermore, Tesla is crushing its competition and shows no signs of slowing down. As a result, this business has a secure path forward with vast growth potential.
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