1970-01-01 08:33:28
Objective
The VinWorks was formed to solve a specific problem facing the automobile dealers, the ability to effectively manage and prepare information displayed on window stickers. The VinWorks solution increases productivity and streamlines the process of creating a window sticker for a used vehicle. To most consumers, the window sticker(s) displayed on each vehicle is an essential part of their purchasing decision. A window sticker contains vital information on a vehicle such as year, make, mileage, value-added options, selling price, dealer warranty, and assorted dealer promotions. It is a requirement by the Automobile Information Disclosure Act that a window sticker must be affixed on every new vehicle for sale in the United States. This requirement was adopted quickly by the used vehicle market as well, as it helps build consumer trust and removes the mystery of buying used vehicles.
The Issues
The process of preparing window stickers and buyers guides is time consuming and requires a coordinated effort to get accurate information onto the stickers. The manufacturers only supply window sticker for new vehicles, whereas in the used vehicle market, it is the dealer’s responsibility to provide the vehicle information for the sticker. Unless a dealer provides its own service to print window stickers, the dealer must schedule and wait for a service provider to come by. Depending upon the arrangement (financial) made between the dealer and the service provider, it can take anywhere from hours to days to get window sticker printed (or reprinted), and applied. This time lag costs money, since the vehicle cannot be sold until appropriate stickers are affixed.
In addition to the cost of time lags and effort, the cost of preparing a window sticker is $12 to $15 for each vehicle. To be competitive, the dealer often reduces price or introduces new promotions to attract more buyers; with each event requiring a new window sticker to be reprinted. The window sticker reprint fees come at a cost of approximately $8 to $10 per vehicle.
The limited real estate on the paper-based window sticker also prevents dealers from displaying valuable sales and marketing information to potential buyers. Information such as vehicle history report, consumer reviews, aftermarket features, and the availability of similar vehicles are essential data that plays an important role in selling vehicles.
The VinWorks Solution
The VinWorks utilizes its patent pending solution, VINPaper. VINPaper is a wireless display panel that will replace the current paper-based window sticker inside each vehicle. The VINPaper is built on an emerging display technology called electronic paper (e-paper). E-paper presents information exactly like a LCD panel, CRT, or any other computer display. Unlike these other displays, e-paper is as thin and flexible as regular paper, consumes minimal power, and in fact, once the information is projected on the display, it can be viewed indefinitely, without requiring any additional power.
Our innovative design includes a low power consumption wireless transceiver that allows information to be transmitted over the internet to the VINPaper display. Our proprietary power management controller uses rechargeable batteries with the aid of solar cells, enabling the VINPaper to function for at least 6 months on a single charge.
In conjunction with VINPaper, we have developed a suite of web-based applications which enable a dealer to manage and display information on the VINPaper remotely. One of the key component applications is the inventory management system that retrieves vehicle inventory directly from the dealer’s database. By referencing the Vehicle Identification Number (VIN) within the database, it builds detailed vehicle information to be used on a window sticker for each specific vehicle. The information is then transmitted over the internet to each associated VINPaper device and displayed at the intended vehicle. Our VinDesk application enables dealers to create multiple pages of text and/or images, such as vehicle history reports, consumer reviews, incentives, advertising, and any other additional sales information. In addition to generating these vehicle documents, the customer can also upload other professionally generated images or documents to be displayed on any or all VinPaper devices. These pages of information are transmitted to VinPaper where it can be displayed in slideshow format or through user interaction with VinPaper. The addition pages allow the dealers to provide much more readily available information to the consumer than they could by pasting these documents in the window.
Competition
Our patent pending solution is innovative and new in the market today, specifically in the automotive window sticker service arena. There is no existing business offering the same type of technology solution like ours. In addition to being first to market with our innovative solution, our experience and knowledge of the automotive market with our prior venture, CDMdata, Inc. will make The VinWorks a successful venture. Founded in 2001, CDMdata, Inc. is a prominent window sticker and online marketing provider for automobile dealers. CDMdata was acquired by Kelley Blue Book in 2004.
Market Environment
The used vehicle industry is one of the largest retail industries in the United States, reporting annual sales of $370 billion, representing half of the auto retail market in the United States. Annually, the number of used vehicles sold in the United States exceeds 44 million, while new vehicles sold are approximately 17 million. Our research indicates there are over 72,000 franchised automotive dealers in the United States. The majority of the dealers outsource the window sticker responsibility to national or local window sticker service providers.
Our initial sales and marketing will focus on the top 120 dealer groups. These groups are either publicly owned corporations or privately held companies with dealerships across the country. Their dealerships maintain large inventories of vehicles that make the tasks of preparing and managing window sticker more difficult. Their needs for the Vinworks solution are much more urgent than the individual franchised dealers. Our solution allows these dealer groups to instantly update price promotions, special events, certified warranties, etc. from one central location rather than at each of their dealerships. The key to the VinWorks option is maintaining a consistency between each dealership and yet still allowing the dealership to target its own messages in order to sell vehicles base on its geographical location.
Our business model is based on recurring revenues from leasing the VinPaper displays and associated web applications/services to dealers. The monthly lease payment will be between $12 to $15 per vehicle.
Financial Analysis
The goal of the VinWorks business model is to generate recurring revenue. The monthly lease payment will be $12 to $15 per vehicle. We know from our past venture as a window sticker service company, that a typical dealer will require an average of 150 units of electronic window stickers. Our estimated cost of manufacturing each electronic window sticker is $180. This cost will be amortized over a 36 month period. The tables below demonstrate the financial projection over the 5 year horizon.
Management Conclusions
As in all business ventures, timing is critical. Our innovative solution will offer significant advanced marketing opportunities ahead of our competitors. In addition to being first to the market, our patent-pending, cost-effective solution will increase customer productivity and profitability. Ultimately, our market opportunities are measured in hundreds of millions of dollars.
The VinWorks is adopting a plan that requires an investment of $2 million. The financing will assist us in bringing our wireless e-paper to production, building IT infrastructure, funding sales and marketing efforts, paying for software and hardware license fees, and providing operating expenses for human resources and facilities.
If interested, please feel free to contact Mr. Shen,Linchang
Mobile: 0086-15000355201
skype: charlie_soas
msn:yzslc@hotmail.com