MICHAEL ‘MICK’ CREAN knew almost nothing about the internet, so when he decided he wanted to sell car parts online he was blissfully unaware of the how hard it would be.
It was the turn of the decade when the Mayo native first began to explore the possibility of setting up a website, shortly after returning from a three-month trip to Australia with his girlfriend.
Although he had worked in sales in the automotive industry after finishing an engineering course in DIT, Crean was always interested in the possibilities of the internet and had moved into a low-level software testing position.
However, he found himself unemployed upon his return to Ireland just after the burst of the dotcom bubble, when tech jobs suddenly evaporated. With no sign of any great new opportunities in the near future, Crean decided to see if he could start something for himself.
That was around the time when he first had the idea for car parts website, MicksGarage.
“The initial aim was to set up an e-commerce website so that I could get back into employment,” he tells Fora. “I focused on car parts because I knew about car parts and they had been devoid of IT equipment.
“It was my first time working 12 hours a day and I was unemployed, but I loved it. There was no downside, there were only two upsides; one was to get employment for building a commerce system, and the other was to get a business out of it.”
Crean had a nonexistent budget and says that the only cash he spent launching the site was money to buy a basic computer programming book.
“It was 40 quid, so it was actually quite expensive at the time,” he says. “I followed it from start to finish. People asked me how I would do this when I didn’t have a degree in software development (but) I would say that a bit of naivety helps, you look at things and you don’t foresee problems.”
While it took a while to get up and running, MicksGarage would grow to become one of Ireland’s biggest e-commerce sites.
What do you do and how long have you done it for?
Based in Dublin, MicksGarage is a website that sells and delivers millions of different car and accessories.
Crean started the site from his house near Ballina in Mayo in 2003 with an initial selection of a few hundred parts for sale after convincing several automotive manufacturers to get on board.
“It was set up with (my brother) Ciaran, and we alternated working full- and part-time for a while. Towards the end of 2006 was when we started ramping up, when I eventually went full-time in the business,” he says.
Mick Crean served as the company’s chief technology officer, while Ciaran became its CEO. Although many businesses were devastated by the recession, Crean says it had virtually no impact on them.
“It is difficult to impact something so small, (if anything it helped) because customers became more savvy and they started looking to buy parts elsewhere,” he says.
The brothers raised about €550,000 from investors in 2008 – something that Crean says helped to “validate” the business – and continued to grow, taking on €2.3 million in 2012 as its selection continued to grow.
“In 2008 we had about €600,000 turnover. When we took on the other round in 2012 it was about €2.5 million, and this year we are looking at doing close to €12 million,” Crean says.
What are your costs and how do you make money?
MicksGarage makes all of its money from selling car parts, and there are two main ways that it gets them.
The company either buys in the parts and sells them on through one of its two distribution centres, which are in Dublin and the northern English town of Barnsley, or works with local distributors that get the car parts to their intended customer.
“It is about 50:50 and there is no difference for the web user (and) suppliers ship to us about three or four times a day,” Crean says, adding that about 85% of the websites customers get their purchase the day after they order it.
The company also devotes significant attention to marketing and its public image, which is kept light and breezy.
Transport and shipping are also big expenses for the firm, which employs 58 people, 20 of whom are split between the distribution centres. Crean is currently focused on trying to make things run more smoothly.
“We have five staff in Barnsley at the moment, but because much of it is automated, we will be able to ship more out of there with five than we can here (in Dublin) with 14,” he says.
“Our biggest cost is software development. Our order management system, image monitoring, the website, every single bit is developed in-house.
“If I make a change to the website I can get it done and be live today. When you outsource it you get put in a queue and it could take months, it’s far too slow.”
Although it has accumulated losses to date of about €2.5 million, the website is generating cash and recorded a slender profit of €24,000 last year.
What is your market?
With its base in Dublin, Ireland is unsurprisingly the company’s largest market, accounting for about a third of sales. However, that share is dropping as the company looks to push into more locations overseas.
“Our Irish sales aren’t falling, it’s because other areas are picking up more. For example, it’s easier to grow sales in the UK,” he says.
Crean says that the company sells parts to “about 25 countries a month”. The majority of these are countries where traffic drives on the left-hand side of the road and the vehicles are right-hand drive, as it is in Ireland, as different types of cars need different parts.
“The UK is our next biggest market, then Australia and Malta (although) we target the right-hand market too”, Crean says. “Lots of cars have differences, like dashboard types or lights, depending on what type of car it is.”
He adds that although the company sold some parts for high-end cars early in its lifetime, it doesn’t anymore. “It is a fickle market, we just do normal run-of-the-mill stuff,” he says.
What is the competition?
While it was somewhat ahead of the curve setting up online in 2003, plenty of other car parts selling sites have since come onto the scene to take their own slice of the market.
In Ireland sites like Findapart.ie are popular, while abroad, pages like Euro Car Parts dominate markets such as the UK.
Crean says that the company is helped by the fact that many manufacturers are wary about selling too much of their stock through a single portal.
“They don’t want to put their eggs in one basket, like in Euro Car’s basket, so they look to us and the market sorts itself out,” he says.
Crean acknowledges that some local Irish car shops will sometimes beat the site on price but adds that the company looks to make up for it with high-quality service.
“There is a lot (of undercutting) but we’re not targeting the small guys, we’re targeting big guys like Euro Car,” he says. “We aren’t the cheapest on everything, we can’t be, but we offer convenience and good service. Being on the web isn’t all about price.”
What is your vision?
Crean has stated on several occasions that the company’s goal is to pull in €100 million in sales by 2020, and it’s an aim that he is sticking too.
Although he previously indicated that the firm would launch a new range of products under a different website banner, and it did actually set up a bike part site called MicksBikeParts, the attention is definitely on MicksGarage for now.
“We have invested heavily in our Barnsley facility, we just need to get manufacturers in there and products on the ground and the growth will be exponential,” he says.
“We did launch MicksBikeParts, but we pulled back on it, there was a loss of focus and we are looking to focus on getting MicksGarage to the €100-million mark.”
Despite his focus on building the site, Crean says that he doesn’t see himself sticking around forever and will probably look towards a different project in the near future.
“I want to move on over the next few years if I can. I have lots of ideas and I want to set up several tech platforms,” he says
“I won’t go into detail but (it would be) some kind of software service. I love putting together tech on the web that customers can use and make products that solve real problems.
“Ciaran is able to run the business and, once it is on a really good footing, over the next 24 months or so I would be able to start something else.”
Written by Paul O’Donoghue and posted on Fora.ie
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