Sramana Mitra: What was the average deal size? These are pretty high-ticket items, yes?
Dara Greaney: Yes, they’re pretty high-ticket items. We are looking at the $350 to $450 range, which was good because it was so cumbersome for us to get them out the door. Every order has five touch points, but we didn’t have the system in place back then.
Sramana Mitra: At what point did you start bringing in these systems and how did that proceed?
Dara Greaney: We had this in-house system that we kept building on and evolving on. Piece by piece, we would develop. We were using an offshore Indian team to develop the website for us. We had an internal person who was building some of these internal systems. They were constantly working to help evolve our catalog and just every month, do something to make things a little bit easier.
We introduced an inventory management systems and some forecasting, and some basic crude stuff. It was all built either in-house or through an offshore team. We can’t really afford a full-blown ERP or an internal US-based team, so we offshore it to get it developed.
Sramana Mitra: How did the business ramp through 2005 to 2010? Were there key strategic moves that you want to discuss the business-building process? Things must have been changing, right? The competitive landscape must have evolved.
Dara Greaney: It got real interesting because, obviously, there was an economic downturn and everyone freaked out thinking that the whole world is crashing and we’d be in trouble. What we started to see was that the reverse was happening. People were, instead of buying new cars, fixing cars and instead of just paying the dealer, they were looking for deals on parts.
Suddenly, the demand actually increased for the automotive sector during the downturn. We went crazy and said, “We’re going to double down and add a bunch of new categories to capture this demand and really grow the company.” We added turbo chargers, fuel systems, and some other drive line components. We added these other categories that we weren’t really experts in but we knew there was demand for. At about 2005, we started sourcing from China.
Now, we are bringing in our own products from overseas as well and managing that. That was probably one of the craziest times from about 2006 to 2010 and we decided to take advantage of it. We were definitely bootstrapped, and every penny went back into inventory and new products. That was one of our fastest growth rates. We skyrocketed from a few million a year up to $18 million by 2010.