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Which Business Model Is BEST?

GetShitDone

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Hey guys,

Need your feedback on what business model is better:

Which concept is better in the Auto Repair Industry where (quality) supply of mobile mechanics is low and demand for auto repair is very high?

1) Online Marketplace Model - A website that connects car owners to freelance mobile mechanics, where they can pay and book for the repair online before the mobile mechanic comes to service them. The mobile mechanics are existing businesses/sole traders contracted out to the platform (similar to Uber) and they will get auto repair jobs sent to them based on their schedule.

This is obviously more scalable as all you do is connect the existing mobile mechanic industry's businesses to car owners looking for mechanics online.

Eg. www.YourMechanic.com

YourMechanic, The “Uber Of Car Maintenance,” Offers On-Demand, Certified Mechanics At 30-50% Savings


2) Real Life Mobile Mechanic Business - A real life business where you employ quality/experienced mobile mechanics and customers can both pay and book online on your website for your mobile mechanics to service their car.

This is more profitable, but less scalable compared to #1 as you must keep hiring new mobile mechanics and purchasing tools, uniforms, etc as sales increase.

Eg. Wrench

Wrench raises $4 million to bring auto repairs to your door

---

Thoughts on what is the more Fastlane business model in an area where mobile mechanic competition is fairly low for both models?
 
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LeoistheSun

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1- Broker model.
2- Owns people and tools

1 is better. And I think its also MORE PROFITABLE.

Server Cost vs Personnel cost...
 

GetShitDone

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1- Broker model.
2- Owns people and tools

1 is better. And I think its also MORE PROFITABLE.

Server Cost vs Personnel cost...

Thanks for the response.

Just to clarify, the broker model takes a 20% gross margin and the #2 model has a 40% gross margin.

One could also simply do #2 by doing an independent contractor agreement with them (not employees) and try to get them to use their own tools as they're experienced mechanics too.

I'm leaning towards #2 based on the above of minimising personnel cost that way, but open to opinions.
 

LeoistheSun

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Thanks for the response.

Just to clarify, the broker model takes a 20% gross margin and the #2 model has a 40% gross margin.

One could also simply do #2 by doing an independent contractor agreement with them (not employees) and try to get them to use their own tools as they're experienced mechanics too.

I'm leaning towards #2 based on the above of minimising personnel cost that way, but open to opinions.

It sounds like you don't actually own any of these businesses (or will actually be an owner)... am I correct?
 
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LifestyleGem

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1. Scalable, can pay everyone as contractors, and you are just leveraging the situation as a broker.
2. Legal hassles, payroll, additional overhead, equipment requirements, etc. But more margin like you said, although I personally don't think the additional TIME suck is worth it. Not to mention the legal/management part that will be much more strained on the second model.

I'd go with #1
 

BD64

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#1. Also please, all I want is a better alternative to AAA. The amount of times my car has broken down and AAA has left me waiting for hours on end...
 

Greg R

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Which can you execute on better?
 
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