Investment advice

[T78Supra1]

Hi Just need some info,

A friend of mine is planning to open an Online performance parts company based in Calgary. He is basically going to cut prices, so they are allot cheaper then store front companies in calgary. He is looking for me to invest in the company.

Some backround he is not some teenager with a daddy's credit card, he has two successfull companies that are now self running in the Oil and Gas Industry. Like me he loves the tuner world and wants to do this for fun at the same time maybe make some money.

What i am wondering before I invest is, is there a market for this...Would you Guys buy parts online knowing the company is in calgary and the prices are cheap.
What i know is that after ordering the part online you can go to one of his companies located in Calgary and pay with cash or cheque or pay with credit over the internet or phone. Then you have the option of having the part delivered to you or you can pick it up. There will be a full return policy or exchange.

Let me know what you think...

[sputnik]

It really depends on how well he competes with the current guys in town.

There is already a couple very well established shops in Calgary along with countless shops that have either failed or are barely staying above water.

I think for him to get a decent return he is ultimately going to need to be able to carry a wider range of brands and have impeccable service and support.

One thing he should also remember is that he will be catering to the DIY crowd where as the other shops do a ton of business from people who buy something and then get them to install it as well.

[AllGoNoShow]

Not to mention with the dollar being so good, lots of cheap competition now too. Is he still going to be cheaper in the end?

[pinoyhero]

Yeah I'd have to say I'm out for some of the reasons mentioned above and others ...

-tons of competition already, what is his unique selling feature, either a. its local OR b. its online and cheap, can't be both without destroying margins
-this business is becoming commoditized, I wouldn't hesitate to go to my shop that I know and trust and pay an extra 5%, how is he going to steal my business
-given that he's after the DIY crowd, I assume he's going to focus on parts for the sub $30K car (but may look to gain some business from the less common high end car DIY crowd), there are a ton of online part co's to compete with that offer mid to low end product, one need not look fiurther than ebay
-without size and a serious comitment to move product he will not be in any position to negotiate lower supplier costs which will not even allow him to offer discounted prices vs. other larger shops
-what is stopping every other person on this board from doing the exact same thing? again, this proposition is not unique

[Pacman]

Originally posted by pinoyhero
Yeah I'd have to say I'm out for some of the reasons mentioned above and others ...

-tons of competition already, what is his unique selling feature, either a. its local OR b. its online and cheap, can't be both without destroying margins
-this business is becoming commoditized, I wouldn't hesitate to go to my shop that I know and trust and pay an extra 5%, how is he going to steal my business
-given that he's after the DIY crowd, I assume he's going to focus on parts for the sub $30K car (but may look to gain some business from the less common high end car DIY crowd), there are a ton of online part co's to compete with that offer mid to low end product, one need not look fiurther than ebay
-without size and a serious comitment to move product he will not be in any position to negotiate lower supplier costs which will not even allow him to offer discounted prices vs. other larger shops
-what is stopping every other person on this board from doing the exact same thing? again, this proposition is not unique


That is Dragons Den material. Kevin O'leary couldn't have said it better himself.

[pinoyhero]

Haha, oops