The New York-based, online parts marketplace was conceived as an international trading portal that would make it easier (and less costly) for U.S. buyers to obtain imported parts. "We saw an opportunity for small and mid-sized WDs and some large dealership groups to be able to get low-cost country pricing," says Joe Zucchero, CEO of inTelligentparts. "A lot of these guys are competing against the big six retailers, and they go to market 30 points behind because of acquisition costs."
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Zucchero, the former COO of CARQUEST Technologies, formed the company with executive vice president Frank Pagano in 2011. Zucchero and his partners already had experience in China, so they began lining up suppliers there using their existing contacts. The next step was to develop an e-commerce model that would streamline the process of buying imported parts and hopefully reduce costs in the process.
"We're playing on our own expertise in direct importing, technology and the aftermarket," Zucchero says. "Buyers get low-cost pricing, direct import, and access to high-quality parts in partial container loads, which is huge for them. Sellers have complete control of their pricing and whether or not they want to do business with a given customer."
Early in 2013, the company revamped its website to more closely resemble the Amazon.com shopping cart motif. Buyers get free access to the vendor database and full-service brokering from the company in exchange for an 8 percent fee per transaction, while vendors pay $750 for a 12-month membership. (A 90-day free trial is also available.)
Buyers can contact the vendors directly via the site, or by using the inTelligentparts brokering service. After registering and saving vendors to a user "favorites" page, they can also automatically generate request for quote (RFQ) documents to any vendor. The site provides confirmation of the purchase, as well as updates on shipping status. Once a shipment is ready, buyers make a wire transfer payment to inTelligentparts, with a detailed invoice that shows all costs. Vendors are paid before product is shipped, and shipments are tracked through UPS. Either party can stop the process at any point, and buyers can use their own freight-forwarding partners if they choose.
The value-add, according to Zucchero, is that inTelligentparts handles all the paperwork, vets the suppliers and manages the import process. "One question I get is, what stops the buyers from going around us and to the vendors directly?" Zucchero says. "It's a nightmare to get stuff through the import process. We take that headache away. If they go direct, chances are they have to have a full-time person watching their imports. Is it worth that? We're only charging 8 percent."
That arrangement can also reduce costs. "We're not marking up the product," Zucchero says. "We get a transaction fee. We're trying to pull away the shroud of secrecy when it comes to cost. Buyers like that because they are importing on the true cost. We're working with agents, but we tell them if they're getting a percentage, that will be listed right on the paperwork."
Zucchero says the company proved out the basic concept using e-mail and phone call connections between buyers and sellers; the e-commerce piece will make everything move faster.
The company hopes to expand globally as well. "We thought we would be selling mostly to North American buyers using China, India and other countries as suppliers," Zucchero says. "It turns out we've got buyers that want to participate in Russia, Mexico, the Philippines and other countries. We're now talking to U.S. manufacturers about exporting product to those countries."
To identify potential vendors, the company is setting up country managers and working with local chambers of commerce to identify and help vet suppliers. "A lot of vendors, especially smaller ones, don't know how to reach out for new customers internationally," Zucchero says. "For an annual fee, we can open up new markets they didn't have before, and they don't have to invest in a sales force to go beat down doors."
The company hopes to have 100 vendors online by the end of 2013.
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