Target is an 11 year old eCommerce Retailer in the Automotive Performance Accessories Sector, catering to the most popular platforms in the US Domestic Market sports car pantheon. 11 years of steady sales growth, clean books, and a low overhead, totally drop-ship business model shipping over 14,000 SKUs at a $511 average ticket all from the comfort of the owner’s laptop at home or on the go. Scaled to date almost entirely on organic marketing with nearly zero paid advertising invested at any point, this business is currently realizing one of its best growth years to date thanks to an already low-seasonality space and a trusted storefront name. This Internet Retailer sees over 50,000 visitors to its site monthly with a valuable 20% repeat customer base, and an excellent customer LTV for any sector thanks to the “its never finished” nature of the Project Car customer base, a seemingly well-to-do demographic.
Like most eCommerce retailers in the auto performance space, drop-ship is the name of the game. The suppliers for this business have provided total access to literally any type of performance part for literally any make, model or year vehicle – a highly valuable relationship that isn’t easy to build these days; suppliers nowadays tend to focus on the best performing retailers when drop-shipping, so new entrants into this space would find it harder to get approved. And a great value proposition for any drop ship business is that there’s no expensive inventory to manage, warehouse or ship. Usually, eCommerce retailers have to deal with the ebbs and flows of cash flow due to inventory stocking, but cash flow is not a constraint or issue with this business model as there’s no inventory to stock – ever – allowing ownership the freedom to focus more on growth, rather than how they are going to pay for the next truckload of parts. This retailer has gone above and beyond in many cases in securing drop ship direct from a number of prominent brand names, cutting the middle man out, lowering COGS, and boosting margin.
Thanks to the continued and ever increasing ubiquity of eCommerce as the default channel for nearly any purchase, niche and mainstream customers & manufacturers continue to enjoy an ever-improving symbiotic relationship, with increased demand driving increased supply of new and more diverse options, and the automotive performance accessory market is no exception.
This retailer focuses on high-volume platforms – models of cars sold in high volume, reliability, year after year both USDM and Euro, though the headliners are power players with spendy customer demographics – Challenger, Mustang, Camaro and Corvette. This homegrown hero is in a fantastic position to rapidly expand its customer base and offering lineup thanks to the agile and lightweight drop-ship model, a consistently healthy and season-less customer base, and the option to instantly pump up the volume by taking its first step into the new world of eCommerce by selling on Amazon – almost anyone can operate this business anywhere, and this will likely go under contract very rapidly.
