| Business Plans: Aftermarket Internet Applications (Services) |
Services
AutoAftermarket.com offers the expertise an automotive aftermarket corporation needs to have to develop their product distribution in new and innovative ways. This may be through a full-blown e-commerce website, or something as simple as a web page with an e-mail address.
Service Description
There is no doubt that the Internet has become an integral part of the U.S. culture over the past 10 years. Though it appears that the automotive aftermarket has been behind the times. With recent announcements in the automobile industry, it is evident that the automotive aftermarket will be receiving a full reality check on their competitiveness through the Internet.
On February 25, 2000, Ford, General Motors, and DaimlerChrysler announced that they are planning to combine their efforts to form a business-to-business integrated supplier exchange through a single global portal. This will create the world's largest virtual marketplace. Ford President and CEO Jacques Nasser stated: "Today's announcement is another example of how the Internet is transforming every piece of our company and our industry. It's exciting, it's dramatic, and it's only going to accelerate. By joining together, we can further increase the pace of implementation."
What this means for the automotive aftermarket is that if a company wants to be a strategic supplier for any of the car manufacturers, they must have a business-to-business strategy in place on the Internet. This is where AutoAftermarket.com comes in. Unlike our generic webhosting competitors, AutoAftermarket.com will have all the tools required to interface with the largest automakers by utilizing a cataloging and part number database. This will dramatically reduce their startup costs and implementation time, putting them ahead of their competition.
The company will host a state-of-the-art website owned and maintained by AutoAftermarket.com where automotive aftermarket customers can host their site, have e-mail capabilities, and utilize a database that will enable corporations to sell their products and services online to any audience. We will have a staff that will design the web pages to their specifications and the backend technology that enables clean and effective online cataloging and e-commerce transactions.
Danny Chessin, Executive Vice President of Hahn Automotive (which happens to be in the Top 20 among automotive chains in the U.S.) states that "particularly in the auto parts business a real barrier of entry for 99 percent of the companies to get on the Internet is the cataloging issue." Hahn is currently the only company of 70,000 utilizing NPI/Triads' electronic catalog on the Internet for this very reason. We feel very confident that once AutoAftermarket.com develops this sophisticated database, potential customers will not be able to pass up this service.
Our vision is to make AutoAftermarket.com a clearinghouse for all automotive part transactions on the web. This will require our customers to have an inventory management and ordering system already in place. Fortunately, just about every manufacturer, distributor, and jobber in the United States have these systems in place.
AutoAftermarket.com will not only create the customer's web page, but will also have the cataloging and part number technology developed and on-hand, as well as having the capabilities to host the customer's website on our automotive aftermarket-dedicated server.
We plan to supplement these larger applications (i.e. projects that require more time) with web pages that don't at this time require an e-commerce application for small to medium-sized customers. Our product will be distinctive because we will have a graphic artist on staff with automotive aftermarket experience who can offer more creative artistic solutions than our competitors. Also, it will be to our customers' benefit to have their web page on AutoAftermarket.com because if they ever do want to conduct business online, the technology will already be in place.
These generally take less time and will be critical to the cash flow of AutoAftermarket.com. We believe that there is a significant market for manufacturers that want to put some of their "bright star" applications on their web page for DIYs or prospective distributor purchasing agents. A professional purchasing manager will be investigating all avenues of research to find out if their supplier is offering the best products and services possible. It is our belief that this market research will take place online.
An example of where this type of application has been successful in the automotive aftermarket can be found with Kelley Performance Products, maker of carburetors, fuel injectors, ignition systems, engine systems, and customized engine parts for racing and street applications. Kelley's embracement of the Internet has cut their costs and workload according to Mack Miller, communications manager. "It was basically born out of a major frustration I've had for many years to supply artwork to our customers quickly and effectively." Because of the Internet, distributors and catalog companies can now acquire photos in minutes rather than waiting for Kelley to process film and duplication at a photo lab, and then package the artwork for shipment. Prior to their Internet implementation, Miller was spending approximately $50,000 to supply their customers with art.
A feasibility study of the Internet environment will be conducted for each customer with any service we offer. It is important to AutoAftermarket.com that we help enhance the selling process of our customers. Our knowledge of the automotive aftermarket, as well as the Internet, will be fully utilized to offer the best solution for our customer. It is our belief that we are not successful unless our customer is successful. The amount and type of customers that can benefit from an online system is limitless. We feel confident that once the customer spends the initial cost of getting on the Internet, both our companies will enjoy a profitable relationship by reaching more customers.
Competitive Comparison
Internet consulting within the automotive aftermarket is virtually nonexistent. There is only one other company that we know of that claims to cater to the automotive industry. InternetSource, based in Charlotte, North Carolina, has a package known as "E.MBRACE" that gives manufacturers and distributors of automotive products an affordable way to conduct business profitably over the Internet. It is a package that can be "quickly incorporated into your existing business systems without extensive customization or IT staff." Although they claim to focus around the automotive aftermarket, there is not one person on their corporate staff that has any automotive experience.
Another industry participant worthy of mentioning is Network Partners Incorporated (NPI), based in Austin, Texas. They would be considered more of an alternative product than a direct competitor. NPI has been a supplier of computer systems to the automotive aftermarket for many years. Their market share of distributor-to-jobber automation services is estimated at around 60-70 percent. It is best designed for interactions between the distribution center and jobber stores, although some major service shops have it, too. It is basically an online perpetual inventory system that runs on their supplied machines. The hardware is quite expensive, as is the software, maintenance, and in-house consultant. There are many drawbacks besides the expense, including that the system is not in real time (overnight refresh) and it is not Windowsbased. Regardless of its market share, it is known for being extremely user-unfriendly.
Sales Literature
The business will begin with a detailed corporate brochure establishing the different services AutoAftermarket.com will offer. It will quote various industry experts detailing what advantages other corporations have recognized after automating their supply chain. This brochure will be developed as part of the startup expenses.
Fulfillment
AutoAftermarket.com provides intellectual services and will employ three professionals with varying degrees of experience. One e-commerce professional with 5 plus years of experience will be hired for projects of medium to large magnitudes. A general web specialist will be hired with 3 years' industry experience for smaller applications as well as assisting the e-commerce professional. Also a graphic artist who has experience in the automotive aftermarket will be on staff so that AutoAftermarket.com can offer superior looking services. While all reports will be produced and edited by John Teller, the physical reports will be formatted, printed and bound by the secretarial services at Technology Towers. It is forecasted that another web specialist will be added in year two and another e-commerce professional will be added in year three.
Technology
The enterprise server where the physical data will reside is a PowerEdge 8450 supplied by Dell. It represents the highest performance in an industry-standard server with up to 8 Intel Pentium III Xeon processors. It is also armed with Intel's Profusion chipset which keeps the data moving with its advanced crossbar architecture. The machine we have selected comes with 4 Intel processors, 1 gigabyte RAM, twin 18-gigabyte SCSI hard drives, 10 hot-plug PCI slots, and the Linux operating system. We will also add 4 18-gigabyte hard drives every subsequent year. AutoAftermarket.com will be leasing this machine at $1,381 per month.
We will also be utilizing a NetForce 2200 manufactured by Procom Technology to provide instant storage for our internal network, as well as overflow for the web server. The model we have selected has 6 25-gigabyte hard drives. The NetForce 2200 acts as a data pump that offers file storage and sharing on the network, distributing 150 gigabytes of data more quickly than if it was stored on a general-purpose file server. It is designed for CAD/CAM or digital photo applications and will be a benefit to AutoAftermarket.com for a cost of $10,675.
AutoAftermarket.com will maintain the latest Windows and Macintosh capabilities including complete e-mail and corporate website on the Internet so that companies looking for our service will have a direct link to us. We will have state-of-the-art equipment, including 3 Compaq Presarios, 1 Macintosh, top-of-the-line peripherals, interoffice network, and all the latest software. Software packages will include Macromedia Dreamweaver UltraDev for e-commerce, ColdFusion for web development, the Adobe Publishing Collection for graphic art, and Acid Pro for online digital music.
Security issues will be a major technological issue, especially with regard to the e-commerce sites we will set up for manufacturers and distributors. We will plan on using all the latest data encryption techniques available throughout the industry. For locking up e-commerce security, we plan on using Entrust Technologies' patented certification revocation list distribution technology mainly because it is part of the Internet Engineering Task Force standards. We are also optimistic because they offer free licenses to parts of its patented technology.
If the customer plans on having high volumes of e-commerce transactions, we will also recommend that they get in touch with WebTrust Organization. Accountants who do on-site audits of e-commerce security systems, transaction integrity, and personal information administer this organization. The cost for a WebTrust seal will range from $5,000 to $100,000 per year depending on the site's amount of business. The accounting houses will then check in every 90 days to ensure that Net firms are up to compliance with all terms of the seal program.
We will also recommend that our customers look in to purchasing insurance to protect themselves against Internet hackers. There are many companies such as ACE USA, AIG, and Sedgwick that offer e-commerce insurance policies that cost between $25,000 and $125,000 in annual premiums for companies with less than $1 billion in revenues.
Future Services
We will continually expand our services based on industry trends and changing client needs. Some visionaries within the Internet industry believe that the Internet of the future will include utilities like cellular phones, microwaves, and even washing machines and refrigerators. The beauty is that for any of these items to interact over the Internet, a programmer's skills will be required. It will be critical for AutoAftermarket.com to stay abreast of all new technologies that will affect our customers.
Strategy & Implementation Summary
