Where would I start?

[Oztrepreneur]

Ok I am stuck in the veritable wantreprenuer stage and I need some advice. Advice can be positive or negative as long as it is constructive. I am nearing my wits end with chasing ideas and want to execute or start a process.

So going from my gut feel and also advice given by @JackEdwards, I reall want to pursue a B2B style in a 'boring' industry. Im not an internet wiz and I don't think that is where I will find my footing. I am chasing a solid B2B distributor style of business.

So I have a few ideas of products that may be worth trying, but I have no idea on how to truly validate them. One of the ideas is listed below but I am sure there are many hundreds that could apply in this field :

1. Engine Coolant for mechanical workshops. Need- Yes alot of car servicing requires coolant change. Entry - Well anyone can source coolant and brand from Alibaba but here lies my dilemma. I fear the entry part will be impossible due to large existing suppliers here in Aus. (see Covs) Scale - Yes to a degree. In Perth, where I live, there are around 1500 mechanical workshops listed. Id be happy to be a supplier for even 200 of those. But my concept could be scaled if value is seen, Aus wide potentially. Control - Well again a difficult one, but if I build the branded product and service then I have some control, admittedly not complete. Time - Less relevant to me right now!!

So my thought process (vision) is to provide value to these workshops by providing value in the form of price and convenience of order replenishment. Essentially my margins would be low and profit based on turnover (as is expected of a distributor). If I could supply 100 shops and they each do 300 coolant changes in a year I would expect to make $2-3 on each change. Not stuff of millionaires at that scale, but it has ability to scale and also introduce other verticals such as gasket glues, cleaners etc. Plus I could offer on consignment to offer further value. And/or an easy refill, where we deliver 'x' amount once a week so they don't need to continually order.

Other areas I see potential are commercial cleaning products etc. Items where brands don't have alot of emotion tied to the purchase, but business absolutley need the product to function.

So please rip in.
1. How do I validate without having to order $2000 worth of coolant that I potentially can't get rid of.
2. Should my focus be on larger items that have potential for larger margins? Again if I wanted to import Gas Chromatographs (just from top of head) how the hell would I know if there are enough being sold that I could even justify trying?
3. Just because market size is large doesn't mean a new business can grab a piece of the pie. I understand risk is involved but how do you mitigate this risk or realistically judge what your prospects are. I mean alot of the odl boring industries are only really able to compete on price? Where else could you differentiate in something like this??

I didn't want to post in the INSIDERS, as it may be perceived as devaluing that section with 'idea' posts, but I really do feel stuck and want to make a go of something ASAP.

Sorry for the long post, I appreciate your patience!

 

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[KRothschild]

I have family in a very similar business targeting the Australian mining industry and automotive workshops. They're a small business, are inconveniently located in Cairns and the prices are not 'competitive' but they do well. They have little motivation to expand and are comfortable in their rut. That is an example of what much of your competition will be like, so don't stress too much.

1. You can experiment at first with selling small amounts of an item at a time to test the waters. You don't need $2000+ worth to start with.
2. That's 100% to do with what you'll do better at selling. Pros and cons of small/large items are common sense and it's up to you.
3. That first sentence is pure pessimism. You can differentiate in customer service, sales skills, reliability, building relationships with clients, etc. You'll probably have more motivation than others-- for example, my family's business in this sector isn't even talked about. It just sits there and runs itself, and people are too lazy to make it bigger as they have other projects. That is where you can take the spotlight, but you can't take it if you keep fretting about even entering the market.

If you're really that stressed about the ODL ideas then go for something more malleable, cheap and flexible like the cleaning products idea maybe? With commercial cleaning products you have the potential to infiltrate almost any industry.

Best of luck

 

[MJ DeMarco]

How do I validate without having to order $2000 worth of coolant that I potentially can't get rid of.

Pick up the phone, call the shop and ask. Be truthful and tell them what you are doing and how much it could save them. If the shop says "yes" then you've just validated. Carrying this further, you could even take a vocal pre-order. "So can I count on you for 1 barrel of coolant if I can get it for just $X a barrel?" BTW, Fridays are the best days to do these types of calls as people's spirits are generally in high order with the coming weekend.

I used to do my collection calls on Friday and did much better than say a Monday.

 

[Oztrepreneur]

@KRothschild thanks for the insight. I suppose I do come across pessimistic, normally because I have this ingrained self limiting belief that, why the hell would anybody pay for that service...is there really that much value? Obviously there is. I just need to find a manufacturer who is willing to do small amounts to test the waters.....or I do like MJ mentions and validate the idea upfront based on manufacturer quoted prices.

@MJ DeMarco Thanks for chiming in here MJ. I think your advice is spot on, and to be honest I probably new it all along. I suppose it is a fear of rejection, I just have this feeling that I either won't be able to speak to the workshops (not interested in cold calling) or they won't see much value....which is good I guess...on to the next idea!

I will try approaching a number of businesses next Friday (completely agree with the end of week high spirits) and see what they say. Fingers crossed they see the value!

Appreciate the answers.

 

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[100k]

Hmm... you are only competing on price.... isn't that a no no?

I don't think you are adding any REAL value. You would be better of becoming an apprentice (working for free) in a garage for 2 weeks and keeping your eyes and ears open from the complaints of the customers and the workers... then offer a solution to one of those complaints.

Just my 2cents. Good luck

 

[Oztrepreneur]

Hmm... you are only competing on price.... isn't that a no no?

I don't think you are adding any REAL value. You would be better of becoming an apprentice (working for free) in a garage for 2 weeks and keeping your eyes and ears open from the complaints of the customers and the workers... then offer a solution to one of those complaints.

Just my 2cents. Good luck

Thanks 100K. Hence my question. Alot of these boring industries are only competitive by price. I mean something as basic as coolant, doesn;t really conjure too much emotion....but if I were a mechanic and could save a few thousand a year just on coolant, and increase my margins...is that not also value?

I think I read somewhere along the lines of be ten times cheaper or ten times better. I am not experienced but I wouldn't rule out only competing on price...time will tell I guess. I may not even be able to be that competitive on price!!

Happy to hear others views on this.