Southeast Racing Parts will sell racing products to the entry-level/novice racer. These products will include engine and chassis parts along with safety and set-up equipment. Services that we will provide include coil spring rating, along with a scaling service for race cars.
3.1 Product Description
Southeast Racing Parts will assist its customers in selecting the best parts for their application at a price that meets or exceeds their expectations. In the event of a problem, we will be there to assist and counsel the customer to a speedy solution.
We will carry or have quick access to most major lines of racing equipment. We will also carry generic “plain label” merchandise that we will market under our own performance name. Private labeling will allow us, in most cases, to greatly increase our profit margins since the procurement costs are much lower for these types of items.
Even though our target market is the entry-level racer, our product mix will be sufficient to fill most of the needs of even the most hard-core racer. With leisure time at a premium, our reputation for having needed items in-stock will save our customers both time and money. We will be open Monday through Saturday with hours yet to be determined.
Our experience has shown that most entry-level racers’ preference is for low prices. We believe we can offer products that indeed are lower in price without sacrificing the performance and safety concerns that our customers will demand. Southeast Racing Parts will provide precisely the level of service that today’s entry-level racer requires.
3.2 Competitive Comparison
Within our niche, we only have one significant competitor. They, however, do not carry engine parts, which should give us an edge in that respect.
In general, however, our competition is not in our targeted portion of the market. This competition consists mainly of these three groups:
- NASCAR Winston Cup suppliers.
- Asphalt late model chassis builders.
- National mail order suppliers.
More discussion is included later in this plan on competitive businesses.
3.3 Sales Literature
To drive sales initially, Southeast Racing Parts will utilize an existing supply catalog. This four-color catalog will have a different cover with the Southeast Racing Parts logo, phone number, etc., printed on it.
After much research, we found that the product mix in this catalog most closely resembles the needs of the consumer niche that we are focusing upon. An agreement was reached to supply these catalogs to us at no charge. This precludes the need to invest in catalog production at the outset. In turn, we will be using the catalog company as a supplier for some of the inventory lines that we carry. We have developed a price sheet to be enclosed with each catalog.
We will produce flyers in-house on an as-needed basis. These will primarily be to showcase new products and/or to advertise special sales promotions. The flyers will be distributed in the same fashion as the catalogs.
Following are planned means of catalog distribution:
- Give away in-store.
- Enclose in mail order shipments.
- Personally hand out at area race tracks.
- Distribute at local trade shows and auctions.
- Sell for $3 through local racing newspaper business card advertisements.
- Upon the release of a new catalog, we would need to check into the financial feasibility of utilizing direct mail as a means of bulk distribution.
This is an area that we feel we will enjoy a distinct advantage over much of our competition. Because of our past work experience in purchasing, we have a vast number of supplier contacts within the racing industry. We have good, long-term, solid relationships with many of these vendors which, in many cases, will allow us to achieve decreased cost-of-goods and/or additional terms. Many of these suppliers have already committed to special deals for us, such as waiving their buy-in requirements, additional payment terms, sales referrals, etc.
We will purchase our inventory from both regional wholesalers and direct from the manufacturers. We will use the regional wholesalers more initially because of their ability to service us faster. This will lower our margins slightly; however, we feel that the upside will be that it will allow us to turn our inventory faster. As our sales volume increases, we will shift our buying patterns away from the wholesalers and purchase more of our inventory direct, which will result in increased profits.
All computer hardware and software systems that will be utilized by Southeast Racing Parts have been carefully and diligently evaluated. We will use off-the-shelf, PC-based software for accounting purposes including AR/AP, inventory, purchasing, sales, and returns. We will start out with three workstations and expand upon that as necessary.
Many of the computer systems used in the racing industry today are outmoded and obsolete. The major suppliers are reluctant to change because of the huge capital expense to change over their systems at one time. Hence, they keep going with the old and outdated.
By choosing this software, our training costs will be reduced tremendously. Much of the software used by competitors takes weeks to learn and master. Southeast Racing Parts’s use of this software will enable a basic, computer-literate employee to learn the system in one day.
This system will speed our order entry process, assist us in sales forecasting, and allow us to give a higher level of customer service.
3.6 Future Products
We must remain on top of new products and trends. The most important factor in developing future products is market need. Our understanding of the needs in our market niche is one of our competitive advantages.
As stated earlier, we will have our own private label brand. Not only are profit margins better than name brands, but these accessories will help build name identity and awareness for Southeast Racing Parts when they are used on the race track. As our sales volume increases, this will be an area that we can expand.
Another natural area for expansion in the future would be the implementation of a website. On-line commerce is becoming an increasingly attractive option, due to relatively low cost of operation, the global reach of the medium, and the increasing security. Our business model could quite easily expand to include a form of Internet commerce in a variety of racing equipment.