qworx: I build prototypes for Ford Motor Company

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qworx

Grosse Pointe, MI
United States

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qworx

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I build prototypes for Ford Motor Company

Description:

Q work’s Special Equipment Team will be an automotive aftermarket accessories broker that will partner with vendors and dealerships, facilitating dealerships to operate as custom installation shops that allows consumers to shop for vehicles online and personalize them with a wide range of aftermarket accessories to be installed at the dealerships. This plan is in the developmental stage. The principal goal of this plan is to become the leading supplier of aftermarket accessories in the U.S. by pairing the sales of aftermarket accessories with the sales of new and used vehicles. And that will make this company a viable entity for acquisition by a larger automotive company or part retailer.

SET Solution
This venture will contract with more than 10,000 new and used car dealerships (the initial dealerships will be contracted after funding is acquired), transforming them into franchised custom installation shops. This allows them to increase their vehicle sales due to increased website referrals and access to a streamlined source of accessories while reducing their marketing, advertising, and surplus costs (93% of our target audience use the internet to research vehicles, targeting ten percent of those 29 million consumers generates 2.9 million additional referrals per year translating 50 % of those into an average sale of $2,000 ($500 profit) equals an additional 72.5 billion dollars in revenue which also gives dealerships a greater slice of the after market accessory industry without any additional inventory costs (all parts will be order on request); all parts will be installed professionally under warranty. Providing the vendor with a larger distribution opportunity (using the previous formula and assigning the vendors $1,000 per transaction equals revenue of 145 billion dollars) will allow us to negotiate a contract which gives us the lowest prices (even with a 5% mark up). Personalized vehicles will then be more appealing, affordable and available for not only auto enthusiasts but also general consumers who would have by and large avoided personalizing their vehicles because of how difficult, time consuming and expensive it can be. We will also be able to focus on an opportunity that big automotive companies miss - used vehicles. All market segments and age groups will be targeted as end customers. However, our 5 year initial target is 600,000 used car consumers from the youth segment (ages 16 through 35). According to the following data taken from the 2004 SEMA youth study report, this segment represents the largest opportunity for growth:
• This segment numbered 32 million consumers in 2003 (3 million entering the market every year)
• They spend an average of $22,000 a year
• 74 % of the automotive consumers are in this market segment, 2/3 purchased used vehicles in 2003
• 93% of this segment use the internet to select their next vehicle (versus 62% of the general population which used the internet to do the same) & 63% of these consumers in this segment prefer to have a distinctive vehicle
• 52% have spent between $250 to $3,000 to personalize their vehicle, 11% spent greater than $10,000
These facts illustrate a clear opportunity in vehicle personalization, although it is being done on a limited and fragmented scale, there is a huge percentage of this target audience that is being missed because of inefficient distribution.

SET Advantage
This venture will give customers access to a wider range of accessories (eventually over 500), at more installation facilities (over 9000) than any of the large automakers or aftermarket parts retailer (installation shop or store) along with the option of having them installed under warranty. Patented networking software, a business method patent (a 3yr process which is currently underway) , exclusive service & strategic partnerships (which will give us the most comprehensive marketing and parts distribution channels), and full dealership participation will not only create barriers to entry for companies wishing to join this virtually un-touched segment of the automotive after markets industry, it will also give us a sustainable advantage over other companies currently competing in this segment as well. The companies charted below are industry leaders in their own areas of the automotive industry, capitalizing on the strengths of these companies or their biggest competitors by negotiating (5 year non-compete ) exclusive contracts (the price of these contracts are included in start up or operating costs) Their services will be purchased for the first 24 months after which they will have a negotiated share of the profits which gives them a performance based incentive and a vested interest in the continuous improvement and success of this venture.

Business & Revenue Model
This plan will have three revenue streams:
• 2.5%- 5% commission on accessories sold through the website (dealership or self installed)
• $50 sales commission for every vehicle sold (begins after 24 months)
• Website revenue from monthly online gaming subscriptions, banner advertisements, apparel sales, etc.
The dealerships will be paid first, when the vehicle is purchased or financed by the customer. The purchase will trigger the electronic payment process. SET will be paid from the dealer who will then pay the vendor. Service partners will be paid by the SET according to negotiated contracts. Parts will be shipped directly from the vendor to the dealership (which eliminates dealership inventory costs)

Investment Summary & Exit Strategy
This venture requires an initial investment of $900,000 dollars, which will be applied to seed & start up costs such as; forming a senior management team, contracting with service & strategic partners, project vehicle , office supplies and equipment leasing, accounting and website firms) and daily operating expenses. (All accessories will be shipped directly from the vendors; SET will not be responsible for any inventory costs). The second round of funding (an additional $900,000) will occur six months later for ongoing operating expenses. The first quarter of year 2 is the projected break even point and the revenue from the next 3 quarters will be reinvested into the company. The investor/s will start seeing a return on their investment (dividends) in the first quarter of year three. This venture is designed to become an acquisition by a larger automotive company within 5 years (J.C. Whitney, APC, Carparts.com, and Dealer Access were all similarly acquired for undisclosed amounts in the last five years), after we’ve demonstrated the process and feasibility of this business model. The investor/s will then see a return on their investment of greater than ten times .The following goals and milestones are based on an August launch date, (assuming funding is secured by August 15th).

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