Sramana: Let’s double down on the evolution of your business. Can you talk more about the progression of the business chronologically? When did you actually start the business?
Michael Dash: We started it in September of 2011. We had sold our equity in our previous company in July of 2011. We started brainstorming our next step and we both had a good understanding of what it took to run a good e-commerce company. We also knew that there was a very low barrier to entry in e-commerce.
Since we were self-funding the business, we got a very small space in Brooklyn. Our very first step was to find distributors who would work with us and provide us the data we were looking for. We did not actually start selling products until February of 2012. We did the initial coding ourselves. Between development and outreach there was a good five months staging.
Sramana: Since you were selling on the marketplaces what development did you have to do during those 5 months in terms of development and coding?
Michael Dash: There was a tremendous amount of database work. Because we are selling auto parts and precise fit is required, there was a tremendous amount of database structure to make sure the parts were listed correctly. We also had to make sure the data behind the parts, such as descriptions, videos, and pictures, was correct.
We also had to work on the processes for taking and sending orders to distributors for fulfillment. We had to receive tracking information from distributors and pass that on to customers. Our data structure and process list was actually rather substantial and if you look at everything it required, you would find it to be almost overwhelming. We have a lot of processes running off of our databases.
Sramana: Did you use an off the shelf system like Magento for that?
Michael Dash: Yes, we used Magento to start. Out of the box open source modules were available and we could customize for our use case.
Sramana: Were you able to plug Magento into eBay when you started selling on eBay?
Michael Dash: Initially, we did that although it was a bit of a hack. Eventually, we had to move away from doing that ourselves just because our catalogue was too fast. We had to use a third party vendor to assist us with that and we are now evaluating that agreement as well. We have to determine what the investment required to do that ourselves would be versus continuing to use a third party vendor.
Sramana: You started selling on eBay in February of 2012. Did you sell on other marketplaces at that time as well?
Michael Dash: We started on eBay, and a month later, we added Amazon.
Sramana: That’s interesting because eBay has a car parts business.
Michael Dash: eBay is one of the largest third party marketplaces for cars and car parts. They have a program that parts distributors can get into which allows you to pay a percentage of each sell as opposed to paying for each listing.
Sramana: What was your pitch to the parts distributors? If you were selling on eBay, why did they not just do that themselves?
Michael Dash: Distributors are wholesalers of product. They do not sell to people direct. They use people like me to push their products into the marketplaces.
Sramana: Do they do drop ship fulfillment of individual orders?
Michael Dash: They don’t do individual orders. They only do that for third party business like us. There are other people like me who buy from these whole sellers as well, and many of them are my competitors. Most whole sellers in my space also perform the drop ship functions and white box the product shipments.