Sramana: Your policy of being selective with distributors makes perfect sense. How many relationships do you have with distributors in order to allow you to serve the entire car parts market?
Michael Dash: I have one distributor who covers 99% of my aftermarket parts requests. For my body parts, I have one distributor that I use for 99% of my fulfillment requirements. For performance parts also, I have one distributor that I use who satisfies 99% of those requirements. We tried to deal with multiple distributors and we found out that it was not worth it and it did not pay off for us.
Sramana: What percentage of your business is traditional car parts and when did you introduce the additional niche wholesalers?
Michael Dash: The majority of our business, well above 90%, is comprised of revenue from traditional car part sales. The new agreements have been very recent changes.
Sramana: How do you select what categories to get into?
Michael Dash: We like antiquated businesses. I like a business that has been around for a very long time. The next business we entered was plumbing parts. I like a business area that does not have a lot of online competition. These businesses are not really all that sexy. There are a million people out there selling iPhone accessories. I could easily get into that but there are just too many people in that area. Plumbing parts are not sexy. However, people need it and people look for it online every day. I can buy those parts at a good price and they ship at a reasonable rate.
Sramana: It sounds like you have a very specific type of business that you want to be involved with.
Michael Dash: Exactly. I go after businesses that have been around a long time. They have had a hard time going online, perhaps because they are older businesses. People just have not taken the time to bring these businesses online.
Sramana: You are doing $6 million with just 14 people, correct?
Michael Dash: Yes. And we are forecasting $10 million this year.
Sramana: Will you have to add headcount to achieve that target?
Michael Dash: As of right now, we don’t. We will probably add additional team members next year.