dickens parts online

Dickens Parts - Online

Prepared by Stephen Harrison

E-COMMERCE

BUSINESS PLAN Strictly Private & Confidential

Dickens Vauxhall Croesfoel Industrial Park

Rhostyllen LL144BJ

Tel: 01978 290077 E-mail: [email protected]



Contents

1.1 Executive Summary 1.2 The Market 1.3 The Mission 2.1 Products, Services and Delivery 2.2 Objectives 2.3 Keys to Success 3.1 KPIs and Metrics 3.2 Industry Developments 3.3 SWOT Anaysis 4.1 Market 4.2 Technology 5.1 Future Products 5.2 Stratagey and Implementation Summary 5.3 Competitive Edge 6.1 Marketing Strategy 7.1 Pricing Stratergy 8.1 Sales Sratergy 8.2 Web Plan Summary 8.3 Important Assumptions 9.1 Operations Team 9.2 Financials 9.3 Start up Summary 11.1 Sales Forecast 12.1 Global E-commerce Market Research



Executive Summary Dickens Vauxhall in Rhostyllen is a modern and contemporary Vauxhall dealership specialising in the complete range of new Vauxhall models whilst catering for the customer wishing to purchase a vehicle up to 5 years old and the aftercare of vehicles up to but not excluding vehicles of 15 years plus.

The Market Dickens is not currently participating in an exciting, growing market. Automotive parts, sales and service online has seen explosive growth in the last couple of years. The market is worth £1.5 billion annually. A recent survey indicates that over 80% of all automotive sales start with some type of research online. Additionally, social media has increased dramatically helping fuel this growth. What the service and after-sales business requires is a fresh injection of enthusiasm for success and growth bringing plenty of fresh, new ideas in which to build a successful and profitable E-commerce client base, whilst still providing a sound customer facing base. Current market trends show a shift towards the online purchase of vehicles, vehicle parts, accessories, consumables and service items all of which have led to the decline in the previous client bases interest within the business. It has therefore reduced the sales and is having an impact on the profitability. This trend in the market elsewhere seems to be improving with a record new number of cars produced per annum since the recession, which in turn will lead to a requirement for parts, service, and after sales. Over the last few years there has been a noted reduction in the after-sales, parts sales and service department which could possibly be linked to a number of factors such as; increased local competition, a reduced spend per head, unavailability of parts, a consumer shift to online parts availability at the click of a mouse, with the ease of having parts delivered directly to their homes. National and local competition have already begun the process of creating an E-commerce platform in which to view (360 degree photographs, video etc), order, ‘click and collect’ , and delivery services for vehicles, parts and service. This downturn could easily be rectified by the implementation of a small scale Internet based sales platform which could be built upon in many key areas (sales, service, after care, mot booking etc) and with the support or backing through Vauxhall itself and it’s branding. This is obviously an item that would be discussed within the next 12 months. Businesses that do not move with the E-commerce market and do not have a strategy such as laid out below or an offering in this field will lose ground against their competitors.

The Mission Dickens E-Commerce mission is to provide the finest selection of Vauxhall Genuine parts and accessories using the Internet to increase the value to the customer whilst raising our profit margin, stock turnover, and raise parts availability both locally and further afield. We exist to attract new and maintain existing customers whilst improving spend per head. We aim to be the first choice for Vauxhall locally. Our services will exceed the expectations of our customers by constantly striving to supply what the consumer is asking for. We will continually review what is available in the marketplace, and what isn’t, thus improving on what we have available and providing new products and services to the areas of need. This will help ensure our success in a market driven by consumer demand. When we adhere to this maxim, everything else will fall into place.



Success of course will ultimately be measured by customers choosing us because of their belief in our ability to meet or exceed their expectations of price, service, and selection.

Products, Services, and Delivery Dickens will be both a brick and mortar company serving the local community as well as offering an E-commerce site with a mail order service. The E-commerce site can be hosted firstly on Ebay with links directly from our Home page, Twitter, LinkedIn, YouTube or Facebook feeds. Dickens will offer a wide variety of engine and chassis parts for almost all the current Vauxhall Models and a selection of high demand items for older models. Fitting and Painting of parts will also be offered. All of the popular parts and accessories will be offered in addition to an array of generic parts. This in the future can be blended into the main website until it becomes a platform in its own right. All parts can be made available to be dispatched locally through our parts van, locally via collection, or nationally through a courier of your choosing.

Objectives Dickens objectives for the first three years are:

To make Dickens E-Commerce an icon brand; which is the first choice for Vauxhall aftercare in our region.

To develop an effective, well placed E-commerce site for sales of Vehicles and Vehicle aftercare products and services.

To launch a focused Social media marketing campaign in a controllable and measurable market that will drive customer's toward the company's website.

To create an infrastructure for the fulfillment of Web-based sales.

To increase parts sales year on year and feed additional work into the workshop.

Keys to Success

Dickens keys to success are:

Social Media Marketing – Be an active member of our local E-Community

Web design and navigability.

Product quality.

Service.

Affordability.

Accessibility.

Prompt delivery of parts and or services.

Work with our customers on a personal level through the mediums of WebChat, Email, Social media etc.

Strive to improve spend per head / visit



KPIs and Metrics

In today's ultra competitive business ecosystem, only the strong survive. In order to keep our sales team on top of their game, we need to cultivate a data-driven culture by sharing the right performance indicators and business metrics with the team and develop training plans for those who aren’t hitting targets. Use of these KPIs and metrics should ensure our team has confidence and to ensure our business thrives.

Sales Growth – We should analyze our E-commerce growth and use that information to make important decisions about which products to sell, up-sell, or cross-sell.

Sales Opportunities – We can analyze how many sales we have made against how many we have lost and review the reasons why we may have lost a sale.

Product performance – We can measure and rank products based on revenue performance to inform our sales team which products are selling well and which products need special attention.

Sales Targets – We can measure the number of sales over a specific time period and compare it to target value and past performance to motivate and reward our sales team.

Average spend value – We can measure the average value of each sale and use this information to help quantify the value of each opportunity and develop further sales opportunities for a given product or customer.

Sales by contact method – Using basic data recording we can analyze which method of communication is developing the most leads and sales and dedicate time and training to develop these further.

Quote to Close – By recording and reviewing how many quotes we send out and how many of these quotes turn into sales we can aspire to developing future sales from opportunities that may have been lost or simply missed.

Industry Developments Current market trends show that the economic downturn is subsiding and overall sales are on the increase. E-commerce has had a great deal to do with this upturn and will aid in the rejuvenation, and as a whole it is appreciating thus becoming more economically viable. SWOT Analysis Strengths Dickens is a well established and thriving Vauxhall Dealership, currently offering the new Vauxhall range of cars, suvs, mpvs and crossovers. Dickens runs successful New Car Sales, Used Sales, After-sales, and Service department. Weaknesses Currently Dickens has a limited web and social media presence, no E-commerce platform and currently doesn’t offer a commercial representation, accident repair, cosmetic repair or a fast fit service lane. In addition to this our current parts set up isn’t able to email customers with production descriptions( still using FAX), there is limited or no up-selling or cross-selling and no ability to create new sales leads. There is a need to inject fresh enthusiasm, working knowledge and productivity to motivate, inspire and help to develop and train current team members.



Opportunity The E-commerce side of automotive sales and after-sales is currently undergoing a massive development with new businesses and suppliers appearing all the time. At present Dickens isn’t running any online promotions or social media oriented special offers on its products or services. These could easily be introduced and made profitable along with running an effective E-commerce platform with which to sell its services. Threats Dickens currently has 10 similar Vauxhall franchises within 30 miles, innumerable online parts factors, and local motor factors to compete against. In addition the department hasn’t moved forward and grasped technology as a means of generating new sales leads.

Market Main Competitors Customer Base How do they attract

custom? How Could we attract their custom?

Arthurs Oswestry and surrounding areas.

Arthurs currently have a wide local catchment of loyal customers

Arthurs currently have negligible Web presence; aim to attract web savvy customers to purchase parts and service from us.

Lookers Chester, Ellesmere Port, Speke

An established and large company with many different brands and a large marketing budget

By offering a greater range of items at a better price with local delivery or click and collect service

Euro Car Parts/EBay/Amazon

Mainly younger, Internet led.

Reduced price none OEM parts

By offering Genuine parts with Vauxhalls warranty at a competitive price

Technology

All computer hardware and software systems that will be utilised by Dickens Parts Online have been carefully and diligently evaluated and are currently in use by other E-commerce platforms. We will initially use EBay shops, EBay analytics and seller dashboard, Auctiva (listings and template tools) Photoshop, our own inventory, purchasing, sales, and returns. We will start out with one workstation and expand upon that as necessary.

By choosing this software, our training costs will be reduced tremendously. Much of the software is based online and only takes hours to learn and days to master and above all is free.

This system will speed our order entry process, assist us in sales forecasting, and allow us to give a higher level of customer service



Future Products

We must remain on top of new products and trends. The most important factor in developing future products is market need. Our understanding of the needs in our market niche is one of our competitive advantages.

As stated earlier, we will have Vauxhalls brand behind us. Not only are profit margins better than non genuine brands, but these parts and accessories will help build Dickens brand identity and awareness for Dickens when they are purchased online. As our online sales volume increases, this will be an area that we can expand.

Another natural area for expansion in the future would be the implementation of blending the EBay shop into our E-commerce website. On-line commerce is becoming an increasingly attractive option, due to relatively low cost of operation, the national reach of the medium, and the increasing security. Our business model could quite easily expand to include a form of Internet commerce in car sales and service. Other avenues that could be explored are SMS marketing, an android dealership App, etc but these can be discussed in the future as can links to tuning or performance houses.

Strategy and Implementation Summary

Dickens strategy is based on initially capturing a small percentage of the growing parts and after-sales market share through Web sales.

Also, Dickens intends to create a ‘One Stop Shop’, so that they can eventually capture market share across broader geographic lines.

Competitive Edge

Dickens competitive edge will be their easy-to-use website and superior customer service. The website design will be a competitive advantage because research indicates that an easy-to-use website significantly increases sales. The design of Dickens site will encourage purchases because it is so easy and quick to make the purchase. Too often sales are lost because of complex websites that are far from intuitive.

Dickens other competitive edge is superior customer service. The mantra of the customer service department should be to serve the customer in any way required. Customers that call in/initiate WebChat/ or email with a problem/issue should be amazed at the amount of personal attention they receive and how quickly issues are not only resolved, but significantly improved. This will be a powerful asset.

Marketing Strategy

The retail marketing strategy for launching our E-commerce platform should centre on utilising our corporate identity so that it clearly defines our market niche in terms that will benefit our customer. Other specific strategies that can be used follow:

1. Print Ads - Keeping the Dickens name in front of the customers mind while getting established will be necessary. We could tag on to existing limited space ads in the local newspapers to keep our name/phone number/website in front of the consumer. We may attempt to showcase a single product in an effort to return revenue from the advertisement.



2. Social Media Press Releases – Using Facebook, Twitter etc run releases and/or stories concerning the opening of Dickens Parts Online. We could also use the above media to run new product releases.

3. Decals - We should have additional decals manufactured with the Dickens Parts Online logo onto the delivery van.

4. Apparel - We currently don’t have any apparel that denotes different departments. A line of premium Dickens Vauxhall Parts apparel could be designed and produced in very short runs to reduce inventory costs whilst giving a professional and wow factor for customers entering the dealership.

5. Grand Opening - A Grand Opening is the most successful of any in-store promotions. Loss leader pricing on a few high volume consumable products will attract in-store traffic.

6. Trade Shows – Could we exhibit at local trade shows annually? Revenue that we could produce at the shows would outweigh our expenses for attending.

7. Word of Mouth - By giving first-time customers great service and a fair price, the word is sure to spread. Also, the many industry and public contacts that we already have in the area will prove to be most beneficial in spreading the word.

8. VAT free day – This technique is used to great success in many commercial applications. Offer a 24hr period ‘VAT free’ (i.e) 20% off all items purchased there and then on production of an invite with the buyers contact details and email. This is a sure way of attracting new custom and encouraging older custom to return whilst generating a solid bed of customer contact information.

All marketing decisions with regard to specific media choices, frequency, size, and expenditures should be conducted on an on-going basis with careful considerations of returns generated.

Pricing Strategy

Our customers are especially sensitive to value. We must ensure that our price and service are perceived to be a good value. However one message rings true: someone can always beat you on price.

Across a number of sectors now, be it selling car parts, baked beans or even banking - the important thing to touch on, is not to be the cheapest on the market - this will impact on our margin. We don’t get involved in a race to the bottom. The important thing is to differentiate ourselves from the competition via our Service and After Care. Having the ability to measure service satisfaction levels and promote the same, will help us stand out from the crowd. We can then create a start up baseline and build in KPIs and benchmarks as to how we improve gradually.

Therefore, our pricing strategy is to be competitive within the various product categories, but not to rely on the selling price to overshadow the other advantages of doing business with our company. We will sell ourselves on the basis of the quality products that are readily available, reasonably priced, and backed up by our extraordinary customer service. The products will be checked prior to shipment and all promised shipping dates will be met!

We will strive for a competitive gross profit margin of initially 30%, increasing steadily by year on year.



Sales Strategy

Because Dickens Parts Online is a new entity, it should be understood that we will have to prove our company's worth to customers in order to earn their respect and business.

Most importantly, we need to sell our company, not necessarily the products. We will need to push our service and support capabilities.

Web Plan Summary

Dickens Parts Online will use our website as our catalogue and ordering device. The website will be a complete product offering as well as to provide company information.

The webshop will be designed with simplicity in mind. It is imperative that customers are able to navigate throughout the site intuitively with no problems. Dickens Parts Online will be benchmarking websites to develop best practices for the different elements of the site.

A phone number, email, EBay’s own messenger and WebChat will be offered on the website to remedy any problems that customers encounter. WebChat is an invaluable tool as it allows customers to connect with us at point of purchase and rather than just clicking away or ‘I’ll sort it later’ a sale can be made there and then along with possible Up-Sells!

Dickens Parts Online will process 90% of it's sales online through a secure socket layer (SSL), a secure Internet connection. All orders will be charged to Paypal, or Visa, Mastercard through the PDQ.

By ensuring that the website is easy to navigate as well as simple to order from, Dickens Parts Online will be ensuring that people who make it to the website will end up purchasing something. This last point is key! Research indicates that too many sites that are not easy or intuitive lose customers who migrate through the site, often putting products in their basket, yet leave without purchasing anything. We can measure through many different pieces of software and analytics how many people view, place orders in their basket, and how many purchase items.

Important Assumptions

Key assumptions for Dickens Parts Online are:

We do not sell anything on credit.

We assume the continued popularity of Social Media and E-commerce.

Monthly sales are the largest indicator for this business. There are some seasonal variations, with the months January through June being the highest sales months



Operations Team

Nick Crump – Dealer Principle Trevor Jones – Current IT and Marketing Manager Trevor will handle the graphical design of the website, marketing strategies and its background maintenance. Neil Blackhurst – Current Parts Manager Neil will be in charge of ordering the day to day stock for the website, selection of products of special note or value, set product margins and act in a supervisory nature to the physical side of the e-commerce set up Stephen Harrison – Internet Sales Supervisor/ Assistant Parts Manager Steve will design and run the EBay shop, deal with inbound customer enquiries, be involved in lead generating, assist in stock ordering and management, train fellow members of staff on the E-commerce function ability, be involved in daily reconciliation of PayPal and PDQ payments, handle the stock picking/packing/ and dispatch of web sales. It would be highly beneficially for these four to have a monthly meeting to report on progress, develop new ideas, and to discuss future releases or recommendations.

Financials

Start-up Summary

Our start-up costs are listed below. The only major costs include computer hardware, a set of postal scales, a label printer, software and initial time to setup up the EBay shop.

We will start out with the current inventory on hand plus the addition of the overstocked items and New Old Stock which is currently unsellable. This means the majority of company assets will consist of inventory which we already have on site and the start up cost will not be significant.

Additional funding and time may be required later in order to expand the initial platform, but this can be done on an ad hoc basis as and when.

Later in this plan, when you view the Projected Profit and Loss, you will notice that we do not show any debt or interest expense for the above reasons. Dickens will incur the following start-up costs in order to open an E-Commerce sales platform:

Office and packing supplies (Negligible cost as most of the items come in their own packing or packing can be recycled from other items reducing our rubbish disposal costs)

Web development. (£600 -£2000 based on current quotes but this would be building from scratch. I am led to believe our current website is a Vauxhall template which could be extended upon easily and at a great deal less cost)

Postal Scales 40kg. £15-£35 online

Label Printer Dynmo 50 £51.99 online

Desk & chair (I’m sure we have a spare in the building so again £0 or negligible cost)

Digital Camera (I believe we have at least 3 different cameras in the dealership already)

Computer system with Microsoft Office, photo editing software, scanner & printer, and a broadband Internet connection. (Dell Inspiron 23 5000 Series All-in-One Desktop currently £450 although I’m sure we have a deal in place with a supplier that would be cheaper, the other items are already in place in the dealership)



Dickens will incur the following day to day running costs for an E-commerce platform:

Paypal Fees

Ebay Shop fees

Ebay Final Value fee

Member of staff to run the platform (although this can be shared alongside another job role in the parts department)

Fortunately these costs are pretty fixed and will only rise in small increments based on number of items we sell.

Paypal Fees are currently as follows

Standard transaction fee within the UK : 3.4% + 20p per transaction

Ebay Final Value Fee for our chosen items would fall under Vehicle Parts and Accessories @ 7%

Dickens Parts Online will be profitable from month one. Margins are forecasted to be respectable. Year one sales will be exceptional with a steady growth rate for the first five years.

Dickens Parts Online is an exciting opportunity that combines a customer-centric organisation with an explosive industry. E-commerce in relation to automotive parts and after-sales is becoming increasingly popular in the UK with more and more people becoming active participants. Even for those who are not true participants, it is now common practice to ‘window shop’ or ‘shop around’ online before ever setting foot in a dealership. An investment by Dickens in Dickens E-commerce is potentially a high growth, low risk opportunity.



Sales Forecast

The first month and a half will be used to develop and ready the site. There will be limited sales while the templates and website sales platform is tweaked. From month two on, Dickens Parts Online expects a surge in sales as New Old Stock items are disposed of and regular stock items can be added to the site from then on a gradual rise in sales is to be expected.

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Sales £

Based on an approximate 2000 sales at a very conservative average spend of £24.99 per sale expected turnover for the first year should be in the region of £49980. For example Inc VAT:

Item Cost Wholesale Retail Price Profit after fees

Movano B Gear Cables £78.65 £126.36 £117.51 33.1%

Barometric Sensor £34.46 £53 £48.81 29.4%

Corsa D Brakes Front £90 £133.30 £ 43.30 32.5%

More accurate GP figures can be created with access to our top 100 items but I foresee that our profit margin will still be in the 30% region and considerably higher on many items. The implementation of an e-commerce platform to the after-sales department should therefore be beneficial to adding to the parts departments’ stock turn over, overall GP, and help to increase and facilitate the Vauxhall parts bonus scheme within the dealership as a whole.



Global E-commerce Industry - http://www.reportlinker.com

Thanks to convenience and increasing internet penetration, consumers are readily turning to online shopping, which has been fuelling the retail market in developed countries. The world B2C e-commerce industry generated between £400 billion and £600 billion in 2010, according to yStats.com, which estimates the market will generate somewhere from £700 billion and £950 billion in 2015.

There were over 2 billion internet users worldwide in 2011, and it is forecast this number will exceed 3 billion by 2015. Profit from B2C e-commerce represents less than 10% of overall retail revenue in established markets like the UK and France, which are expected to rise above the 10% mark in coming years. This figure falls to under 3% in less well-established B2C e-commerce markets.

Social media continues to fuel the B2B e-commerce market, which aims to boost electronic business process efficiency, reports T Systems. E-commerce is being considered as a separate, profitable field of business, and intermediary actors are updating their B2B business models, while embracing aspects of social media.

Key Market Segments

The world online retail market expanded by almost 18% in 2010 to reach close to £435 billion reports MarketLine. The market is expected to record 90% growth by 2015 to exceed £827 billion. Electronics represent the leading market segment, with almost a 24% share in terms of value.

The online grocery market continues to expand as consumers subscribing to home-shopping extend their online activity to a growing number of areas, including the convenience of grocery shopping on the internet. The trend toward online grocery shopping is particularly strong in developed nations like the US and the UK. According to research from private firm Key Note, the UK internet grocery market will record high yearly growth until 2013, and the overall market will at least double by then as compared to 2008.

Online grocery shopping is one of the fastest-growing segments within the grocery market, allowing shoppers to access a huge array of products online, compare product prices and schedule home delivery. Online outfits are rolling out this segment of their business by developing their websites, boosting stock availability and elaborating their distribution networks. Within the context of the economic downturn, online grocers are forced to compete on price as consumers can compare prices with the click of a button.

http://www.reportlinker.com/p0733750-summary/Global-B2C-E-Commerce-Market-Report.html

http://www.reportlinker.com/p0284553-summary/Online-Retail-Global-Industry-Guide.html



Regional Market Share

The US online retail market generated almost $153 billion in revenue in 2010, reports MarketLine. The market is expected to record yearly growth of close to 11% between 2010 and 2015, when it is expected to reach almost $252 billion. Electronics is the leading market segment, generating almost $36 billion in 2010, which represents more than 23% of the overall market in terms of value.

The EU online retail market generated close to £163 billion 2010, reports MarketLine. Market growth is expected to slow to a yearly rate of just over 14% between 2010 and 2015 to exceed £316 billion by the end of that five-year period. Electronics is the leading market segment, generating just over £41 billion in 2010, which represents more than 25% of the overall market in terms of value.

Industry Leaders

Leading players operating in the global e-commerce industry include: Groupon, eBay and Amazon. There are hundreds of actors within the B2B and B2C e-commerce market.

Market Outlook

The global e-commerce market is set to continue showing strong growth due to the convenience factor. With widespread internet penetration and a growing trend toward reliance on online options, consumers are increasingly in the habit of carrying out a growing number of activities online, from social networking to shopping.

The growing consumer base for mobile devices means that people are more and more accustomed to accessing the internet from anywhere and at any time, be it to purchase goods and services or to use online content. Making consumers aware of the safety of mobile payment will be an important factor for e-commerce market growth moving forward.

http://www.reportlinker.com/p0137570-summary/Online-Retail-in-the-United-States.html

http://www.reportlinker.com/p0234454-summary/Online-Retail-in-Europe.html

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