Sramana Mitra: What was the inventory strategy at that point?
Dara Greaney: We had inventory as much as we could because we weren’t really getting a lot of traction with people drop-shipping. If you placed a PO, a month later, you get the parts. Nobody really kept a ton of stuff on stock. It was just the nature of parts back then. We were constantly building our inventory out and extend our working capital, and trying to convince the banks to give us a bigger line of credit.
Sramana Mitra: Was bank line of credit your primary inventory financing strategy all along?
Dara Greaney: Yes. Auto parts are seasonal. They’re real big in the spring and summer. The automotive season is Q2 and Q3. We would stock a bunch of inventory and draw down our line in February, and try to sell it all in Spring and Summer. Then pay off the line in the Fall. >>>
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Sramana Mitra: I imagine that you immediately went and sold the same product to a bunch of other customers. Can you talk about some of the early customers and what kind of price point you sold it at?
Pierre Guelen: At the engineering firm, I did my own consultative selling. Here, I needed a sales team. When the software was ready, we hired a few good sales guys and a marketing lady. It took at least half a year to get that on the road and to build a pipeline. It became an overnight success in Netherlands. A number of big companies were pleased about it.
Sramana Mitra: After the first product was in the market, how much revenue did you do?
Pierre Guelen: Half a million.
Sramana Mitra: The next year? >>>
Sramana Mitra: What did you do first to get this thing off the ground? Were there other car parts site at all, or was this the first one that came online?
Dara Greaney: The way the auto parts industry grew was everyone started selling their own niche products. If you were in the wheels business, you’d just sell tires. The fuel guys sold fuels. None of the major brick-and-mortars were online. There was no one that had a full line offering of auto parts online. We identified that we had some expertise in steering and some connections in steering products and that we could be successful just starting with steering. Our business plan was to focus on a limited narrow niche that we could capitalise on and be the steering experts online.
Sramana Mitra: Where did you get the inventory from? Did you buy the inventory or did you get it on consignment? >>>
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Sramana Mitra: We have to capture the story of how you put one foot before the other. You said you started the company right out of school. How did you get it off the ground? What was the premise of the company? What were you going to do and how did you get started?
Pierre Guelen: I started mostly out of technical interest. It was not my plan to build the company. I was a Building Engineer. I liked to consult people on buildings. It was a very technical-driven approach that I chose in the first 10 years. I had around 20 people, and we were doing all kinds of interesting technical projects. That drove me in those years. I really love designing maintenance programs for large plants. One of the biggest semiconductor factories in Netherlands was one of my customers. I worked with them to optimize the maintenance of that plant. I also did maintenance plans for the biggest Heineken brewery in Netherlands.
Sramana Mitra: Was it primarily a consulting company? >>>
Dara bootstrapped BuyAutoParts to $54 million in profitable revenue and sold the company to private equity. Yet another story of success in the niche e-commerce domain.
Sramana Mitra: Let’s start at the very beginning of your personal journey. Where are you from? Where were you born, raised, and in what kind of background?
Dara Greaney: I was born and raised in Ventura, California. I was the first one in my family to be born in the US. My family is all Irish. My grandfather got a visa and came to New York. My father immigrated in ’78 and I was born that year. I’m a first-generation American. I went to school in Ventura. I enjoyed beach, surfing, and soccer. I was always fascinated by technology and marketing. I went to University of San Diego for undergraduate studies. I got a degree in Marketing and Finance there. Then I went to San Diego State’s entrepreneurship school and graduated there in 2002. At that time, I did a startup with an e-commerce company that quickly got bought by a bigger company, but I didn’t want to move to Chicago. >>>
In case you missed it, you can listen to the recording here: