SEMA News—September 2013
BUSINESS
By Mike Imlay
Retailer Spotlight
ModBargains.com Delivers Data, Product and More
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Located in La Habra, California, the company was co-founded in 2004 by CEO Mike Brown, then 19, and President Ron Hay, then 24. Their original business plan called for a sort of online clearinghouse of special automotive parts promotions and deals similar to those offered by tech-industry bargain sites. But the venture quickly morphed into something much bigger—and better.
“It just wasn’t that much fun,” conceded Brown. “So we started to focus on actually connecting people with parts instead. Since then, the business model has continued to evolve from parts broker to connecting people with parts based on our knowledge to inventory and installations.”
Hay added: “We started as a BMW aftermarket accessories company. We’ve recently begun to branch out into all sorts of cars: Nissans, Infinitis, Mercedes-Benzes, Scions, Camaros and Mustangs. We’ve just been expanding. Back then, there was a lot of fragmentation in the market. There weren’t a lot of shops specializing in what we were doing, and the prices seemed really high. Were they really the best products? Where were the reviews, the information? There weren’t a lot of product details out there.”
Executive Summary ModBargains.com Mike Brown Ron Hay
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Filling that gap became the pair’s immediate goal, and social media seemed the ideal way to attain it. They worked with both manufacturers and customers to gather product data, photos and video and then harnessed multiple forms of social media to deliver that information to consumers. Essentially, ModBargains.com has positioned itself as the expert “middleman” that connects manufacturers with the public. The company often fields hundreds if not a thousand consumer inquiries a day. Ultimately, the goal is to help potential customers find exactly the right product for their particular applications. To that end, the staff is composed of employees who specialize in different vehicles, brands and scenes, from sport compacts to American muscle.
“Not everyone we talk to buys from us,” said Brown. “Some people call us, get information and still end up buying from their local shops. There are things that local shops do that we don’t, and there are things we do that they don’t. Each of us has different roles and contributions, and there are a lot of customers to go around. We try to have more alliances than enemies.”
That attitude has led the company to tremendous growth in only a few short years.
“For the first year and a half, there was no office space,” Brown recalled. “I was working on a laptop while I was attending classes.” By 2010, however, the company had moved to its current 5,000-sq.-ft. headquarters, which boasts a reception area, work stations for 26 employees, an installation bay, a shipping department and plenty of inventory space. An
additional 8,000-sq.-ft. warehouse is located close by, and the company works closely with about 50 specialty manufacturers to meet customer demands. Moreover, ModBargains.com is highly organized. Its departments encompass administration and accounting, online and social media, sales, processing and customer loyalty, shipping, receiving and installation.
“Installations are the newest part of our business, but they really work for us,” said Brown, who estimated that the company does between 15 and 20 installs per week. “We get to learn more about our customers, interact with them and take that knowledge and pictures and videos of their installations and feed that to tens of thousands of other consumers who need information about products.”
Hay explained that ModBargains.com uses before-and-after pictures, videos and sound clips to get information out to the masses through Instagram, Facebook, YouTube, online forums and other
social media.
“It’s also about us contributing—not only with our customers by giving them the right information for their vehicles, but also with our manufacturers,” he said. “We have direct information about customers that we have to get to manufacturers: ‘This is what customers want; this fits or doesn’t fit; we’ve tested it here in our installation bay and it doesn’t work; or customers don’t like this or that color....’ We can help the industry grow because we’re helping the manufacturers.”
Inspiring the Staff
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“We’ve carefully picked the staff who connect with our customers on the phone, through e-mails, on forums, message boards and social media,” said Brown. “Over the last year and a half, we’ve spent a significant amount of effort on maximizing the strengths, abilities and character of everyone.”
One strategy has been to use book groups. Brown and Hay choose personal and professional-improvement titles, ask employees to read 20 pages per week, then break the staff into weekly discussion groups of five.
“I was nervous when I first started the groups,” said Brown. “There was probably a little bit of ‘what the heck is this’ at first, but as people started to actually see an impact not just at work but in their personal lives, and see their relationships start to change; they really got behind it.”
Brown said that the company has developed a list of 10 core values that the co-founders believe in strongly and would like to see their employees adopt,
behaving in ways they’d like to see their customers treated.
“Instead of focusing on things like part numbers and what’s the new product, we like to focus on our people and ourselves, trying to become the best people we can be,” he explained. “We like to develop a culture where people enjoy coming to work and feel like there’s some sort of purpose. We’re not here to be this big company and sell parts. We’re here to help fellow car enthusiasts modify their cars in a smart, fun way that makes them happy.”
Like every young retail operation, ModBargains.com has faced more than its share of challenges. One has been convincing manufacturers and WDs that they’re legitimate retailers amid a world of drop-shippers.
“The name of our company—especially as we’ve evolved—leads to a lot of misconceptions,” Hay explained. “We’ve enjoyed a good reputation with our customers, but we haven’t always enjoyed that same reputation with the industry. Explaining our company has always been a challenge.”
Brown and Hay enjoy working with all types of aftermarket companies. They don’t lead out by undercutting prices and prefer manufacturers with healthy distribution networks that maintain and enforce their minimum advertising pricing.
In the end, ModBargains.com strives to “be memorable” to customers.
“We’re a really specific, boutique expert retailer that just happens to get a lot of customers from the Internet,” Brown concluded.
