Innovation

AA Auto Parts established a virtual store on eBay, they attempted to set up a new business module to make a profit which is the Business to Consumer (B2C) module. This module not only can reduce the rental cost but also save energy consumption.

The owner manages inventory and collates sales data to improve the potential areas of waste or inefficiency more than the traditional retail store by the use of electronic systems.

AA Auto Parts provides vehicle owners with both brand new and second-hand auto parts. The proportion of the second-hand auto parts is around one-third. The company wholesales the second-hand parts of the auto car which still has good quality. One major product is older versions of electronic screens due to updating. Another goods stream is damaged auto parts that need delivery to lower labor-cost areas for repairing to extend their product longevity. After quality testing, the second-hand products are sold at the online store.

When the customers receive the goods, the first impression will be the packaging of the goods. For AA Auto Parts, it is important to ensure that the goods will not be harmed in the process of transportation and to reduce the weight of packaging as much as possible. The company is attempting to minimize the filling of the plastic during the packaging process. The employees spend time on recycling paper; for example, they cut waste cardboard to create a three-dimensional space to protect the goods or filling the space between the goods and the packaging by using waste carbon paper. The company selects the single layer shipping boxes, thus reducing the amount of wasted paper and cardboard consumption.

Inspiration

Jiashi said that “In the traditional car parts market, the owners do the business in the B2B model. When I repaired my vehicle, it was hard to find the supplies in the retail store.” It happened that he had been the part-time employee of eBay, therefore the idea of establishing an online store suddenly came as sparks. He found that the car manufacturer companies maintain a high frequency to update their products which leads to the value of the car declining in the short-term. The payment for workers to repair damaged parts are more expensive than the cost of replacing a new one. Therefore, many car owners decide to use new auto parts, and the old car parts are just thrown away as garbage. Based on these facts, Jiashi attempted to “reuse all the parts”. Because many of the internal electronic parts of the car are not recyclable and harmful to the environment unless people try to extend their longevity.

And one of the main challenges is how to sell second-hand products to the customers and gain profit since the profit of second-hand goods is lower than that of ordinary goods. If the traditional business model is adopted, the company would be hard to survive. Therefore, he started by building up an online store to reduce the rental cost.

The main motivation for reducing the consumption of plastic packaging and cardboard is to reduce the potential environmental impact of wasteful packaging. The majority of the packaging waste of Australia ends up in the developed countries' landfills, one of which is the home country of the business owners. The capacity to deal with plastic waste in developing countries is far behind the amount of waste, and the overload of plastic waste causes great harm to the environment in developing countries.

Overall impact

Business owners have set a reasonable pricing strategy for these second-hand goods so that more people can buy quality products at an affordable price. Based on the concept of setting up an open and transparent market for second-hand goods, the company clearly describes the defects of every second-hand part to eliminate misunderstanding. With good faith in doing business, the company has won the loyalty of consumers.

Business benefit

The online model reduces the rental cost and consumption of electricity and heat energy of AA Auto Parts company compared to the physical stores since the storage method is more compact. Additionally, the average emission is higher with consumers driving the car to purchase the goods than delivery by post. Besides, with the reduced amount of packaging on every individual product, AA Auto Parts has been steadily saving money due to the reduced consumption of raw materials.

Social and environmental benefit

If everyone decides to extend the longevity of their auto parts, the turnover rate of cars declines, which is indirectly protecting the environment by increasing the recycling rate and reducing the carbon footprint. Although the recycling process increases the workload of employees, the company's values and ethics about protecting the environment also affect employees. Therefore, they will spread the sustainability and environmental protection knowledge to their peers and families in their daily lives.

Interview

Jiashi Lu, Owner/Founder