National Auto Parts Llc Executive Summary

LINCOLN UNIVERSITY

National Auto Parts, LLC.

(BA 392, MBA Internship Report)

Presented to
Lincoln University

By:
Liping Zhang

Advisor:
Professor Sergey K. Aityan

November 2013
Table of Contents
Acknowledgement 6
1. Introduction 7
1.1. Auto Parts Industry 7
1.2. Automotive Parts Sector Definitions 8
1.3. The Objective of Internship 9
1.4. Sources of Data Collection 10
1.5. Definition of Terms 10
2. Company 13
2.1. Company Description 13
2.1.1. General Information 13
2.1.2. Finance 13
2.1.3. Competition 19
2.2. Online Business Analysis 19
2.2.1. Online Auto Parts Market Analysis 20
2.2.2. Market Analysis of the Organization 20
3. Company Analysis 20
3.1. Company’s Competitive
Advantage Analysis 20
3.1.1. Company’s Suppliers 21
3.1.2. Company’s Technical Support 21
3.1.3. Company’s Customer Resources 23
3.1.4. Professional Warehouse Management 23
3.2. Online Business SWOT Analysis 23
3.2.1. Strengths 23
3.2.2. Weaknesses 24
3.2.3. Opportunities 25
3.2.4. Threats 26
4. Internship 27
4.1. My Duties and Responsibilities 27
4.1.1. Research Two Major Online Store Platforms-Amazon and eBay 27
4.1.2. Call Database 30
4.1.3. Setup Inventory 30
4.1.4. Research Shipping Fees between UPS and Fedex 30
4.2. My Achievements 31
4.2.1. 15,000 Products Get Edited and Uploaded 31
4.2.3. Price Matching 32
4.2.4. Enter Account Settings 34
4.2.4. Online Store Open 35
4.2.5. Set up Database for Online Selling 36
5. Learning Curve 36
5.1. Application of Knowledge Acquired at Lincoln University 36
5.2 What I learned while working at National Auto Parts 37
5.2.1. Attitude Decides Everything 37
5.2.2. Define What to Sell 37
5.2.3. Define the Target Market 37
5.2.3. The Importance of Database 38
5.2.4 Marketing Strategy Helps Sell More 38
6. Conclusion and Recommendations 38
6.1. Conclusion 38
6.2 Recommendations 39
6.2.1. Offer Incentives 39
6.2.2. Create Brand Promotion 39
6.2.3. Provide Fuel-Efficiency Products 40
6.2.4. Offer Additional Benefits to Employees 40
7. Bibliography 40
Reference:
Table 1: Revenue of National Auto Parts from 6/1/2013 to 6/30/2013
Table 2: Cost of Goods of National Auto Parts from 6/1/2013 to 6/30/2013
Table 3: Expense of National Auto Parts from 6/1/2013 to 6/30/2013
Table 4: Net Profit of National Auto Parts from 6/1/2013 to 6/30/2013
Chart1: Net Profit of National Auto Parts from 6/1/2013 to 6/30/2013
Chart 2: Revenue of National Auto Parts from 6/1/2013 to 6/30/2013
Chart 3: Cost of Goods of National Auto Parts from 6/1/2013 to 6/30/2013
Chart 4: Expense of National Auto Parts from 6/1/2013 to 6/30/2013
Picture 1: Auto Parts Companies Distribution
Picture 2: a screenshot of the One Source Software
Table 5: Cost Analysis between Amazon and eBay
Table 6: eBay’s 4 types of online selling: no store, basic premium, anchor
Table 7: Structure Analysis between Amazon and eBay
Table 8: Advantages and Disadvantages Comparison between Amazon and eBay
Table 9: Shipping fees discount comparison between UPS and Fedex
Picture 3: Webpage screenshot of Amazon’s “Seller Central”
Picture 4: Webpage screenshot of Amazon’s “Seller Central” (continued)

ACKNOWLEDGEMENT

Before we get into thick of things, I would like to add a few words of appreciation for the people who have been a part of the internship right from its inception. The internship has been one of the significant academic challenges I have faced and without the support, patience, and guidance of the people involved, this task would not have been completed. It is to them I own my deepest gratitude.
It gives me immense pleasure in presenting this internship report. It has been my privilege to have manager Apple Chen who has assisted me from the commencement of this project. The success of this internship is a result of sheer hard work and determination put in by me with the help of my guide. I hereby take this opportunity to add a special note of thanks for Mrs. Apple Chen, who undertook to act as my mentor despite her many other professional commitments. Her wisdom, knowledge and commitment to the highest standards inspired and motivated me. Without her insight, support, and energy, my internship would not have kick-started and neither would have reached fruitfulness.
I convey my heart full thanks to the staff members of National Auto Parts LLC with their help and cooperation.
I am very thankful to my guide Prof. Sergey K. Aityan for his full support and suggestion in completing this internship report.

1. INTRODUCTION
1.1. Auto Parts Industry
The U.S. auto industry is a key component of the nation’s manufacturing base. In a typical year, it accounts for about 5% of GDP and 16% of all durable goods shipment. The automotive industry, including the automakers and automotive parts sectors, accounted for about 674,000 U.S. employees in 2010, a slight increase of 1.5 percent from 664,200 in 2009, and accounted for 5.8% of all U.S. manufacturing employees.
However, the auto parts industry, since its inception, has always been somewhat of an elusive creature. Typically a man's realm, until recently, it was only a place to go to of necessity. From its simple beginnings, the auto parts company has grown into a multi-billion dollar industry.
The history of auto parts, actually, begins with the history of automobiles. Unless the first automobile had been manufactured, there would have been no need for automotive parts.
In 1901, the first mass production of automobiles was begun by Ransome Eli Olds, precursor to the Oldsmobile. In 1913, Henry Ford Ford became the world's largest automobile manufacturer. It was at this point that the need for automotive parts began.
Almost in the meantime, Western Auto Supply Company was a specialty retail chain of stores that supplied automobile replacement parts and accessories. It operated approximately 590 stores across the United States. Western Auto originally started as a mail order business for replacement auto parts. The first retail store was established in 1921, and grew quickly as automobiles became more and more common. At one point, there were over 1,200 company-owned stores nationwide, usually located in metropolitan areas.
Manufacturers started marketing their cars in an aggressive manner after the war. They started targeting individuals instead of families, came up with numerous new designs and models, which stimulated the consumption of cars as well as auto parts.
1.2. Automotive Parts Sector Definitions
Automotive parts are defined as Original Equipment Manufacturer (OEM), Aftermarket parts (AM) and Recycle.
OEM
OEM parts that are used in the assembly of a new motor vehicle (automobile, light truck, or truck) or are purchased by the manufacturer for its service network are referred to as Original Equipment Service (OES) parts.
Suppliers of OEM parts are broken into three levels. The first level is “Tier 1” suppliers who sell finished components directly to the vehicle manufacturer. The next level is “Tier 2” suppliers who sell parts and materials for the finished components to the Tier 1 suppliers. The third level is “Tier 3”suppliers who supply raw materials to any of the above suppliers or International Trade Administration/Manufacturing and Services/Office of Transportation and Machinery directly to vehicle assemblers.
AM
Aftermarket is the secondary market of the automotive industry, concerned with the manufacturing, remanufacturing, distribution, retailing, and installation of all vehicle parts and accessories, after the sale of the automobile by OEM to the consumer.
Aftermarket parts are divided into two categories: replacement parts and accessories.
Replacement parts are automotive parts built or remanufactured to replace OEM parts as they become worn or damaged. Accessories are parts made for comfort, convenience, performance, and safety, or customization, and are designed for add-on after the original assembly of the motor vehicle.
This is what my internship company National Auto Parts LLC focus on.
Recycle
When people want a new car, they will sell their used car or just throw it into the junkyard. The recycle industry produces goods that are partially comprised of components recovered from end-of-life products combined with new components in place of certain worn or damaged parts that are no longer usable. The process transforms the recovered and new components into “like-new” goods.
Recycled goods generally have the appearance, performance, and life expectancy of new goods.
1.3. The Objective of Internship
The main objective of this report is to analyze the online market of Aftermarket auto parts on Amazon and to introduce the process of opening store on Amazon for National Auto Parts LLC.
Specified Objective:
To know about auto parts industry and AM replacement market
To know about ecommerce and online selling
To open online store on Amazon and eBay
To identify online market feasibility and forecasting
1.4. Sources of Data Collection
The inputs are collected from two sources:
1) Primary Sources:
Work experience
Discussion with manager and officers
Meeting with Amazon customer service and manager
Personal observation
2) Secondary Sources:
Shared portfolios and data
Policies, files and templates of Amazon
Consultation of related documents and publications
3) Data Processing:
Collected information is processed by the use of Microsoft Excel. Detailed analysis, working variables and definitions are embodied in the report.
1.5. Definition of Terms
a) OEM
Original Equipment Manufacturer, When referring to automotive parts, OEM designates a replacement part made by the manufacturer of the original part.
b) AM
Aftermarket is the secondary market of the automotive industry,
c) SKU
Stock Keeping Unit (SKU) is a specific merchant's product identifier. Amazon.com uses the SKUs in your inventory file to associate your products with the appropriate product detail page in Amazon’s catalog (if one already exists).
d) UPC
Universal Product Code (UPC) is the primary product identifier used in North America for 30 years on products other than books. It is usually 12 digits in length, although a variant used in periodicals is only eight digits.
e) ASIN
Amazon Standard Item Number (ASIN) is a 10-digit Amazon.com product identifier. Each ASIN is unique. When you submit a product, it is linked to an ASIN.
f) EAN European Article Number (EAN) is an equivalent of the UPC used outside the United States. The EAN is a 12- or 13-digit product identification code.
g) SAE
Society of Automotive Engineers, a U.S.-based, globally active professional association and standards organization for engineering professionals in various industries
h) DOT
Department of Transportation
i) Amazon Template
It is a Listing Loader used when you sell many products which are already in the Amazon catalog, which is simple template that requires UPC/EAN codes to create listings.
j) Amazon Marketplace
It is a general term where buyers can purchase from sellers on Amazon.
k) Inventory
Inventory is used by Amazon to describe the total products offerings of a single merchant, or the total quantity of a unique product.

2. COMPANY
2.1. Company Description
2.1.1. General Information
National Auto Parts LLC was established as an aftermarket auto parts distributor in 2004 with 2 locations in the Bay Area - Oakland and San Jose. The company is member of the ABPA (Automotive Body Parts Association).
The company is a franchised subsidiary with more than 40 employees, divided into purchase department, account department, sales and marketing department, warehouse department, human resource.
National Auto Parts LLC caters to the needs of both local body shops, like O'Reilly Auto Parts, and individuals, occupying an important share of aftermarket replacement parts market.
The online selling department is just set up.
2.1.2. Finance
With permission from general manager to use one month’s income statement for analysis, I chose Income Statement of National Auto Parts – Oakland, from 6/1/2013 to 6/30/2013 as foundation.

REVENUE:
40000-001
Sales: Oak
$764,190.99
177.57%
40001-001
Sales Credit Memo: Oak
($54.71)
-0.01%
40900-001
Sales Line Item Discounts: Oak
($333,783.83)
-77.56%
Total :

$430,352.45
100%
Table 1: Revenue of National Auto Parts from 6/1/2013 to 6/30/2013
COST OF GOODS:
50000-001
Cost of Goods Sold: Oak
$140,089.28
32.55%
50100-001
PO Freight: Oak
$154.20
0.04%
50700-001
PO Discounts: Oak
($594.89)
-0.14%
Total :

$139,648.59
32.45%
Table 2: Cost of Goods of National Auto Parts from 6/1/2013 to 6/30/2013
EXPENSE:
60105-001
Advertising: Oak
$5,461.35
1.27%
60150-001
Automotive Payment: Oak
$8,529.41
1.98%
60355-001
Consulting: Oak
$11,000.00
2.56%
60365-001
Contract Labor: Oak
$12,023.76
2.79%
60470-001
Dues & Subscriptions: Oak
$218.00
0.05%
60550-001
Employee Meals & Incentives: Oak
$216.05
0.05%
60560-001
Equipment Rental: Oak
$1,352.84
0.31%
60615-001
Finance Charge: Oak
$1,131.57
0.26%
60660-001
Freight Out: Oak
$13.15
0.00%
60955-001
Insurance - Auto: Oak
$1,720.01
0.40%
60960-001
Insurance - Health: Oak
$4,439.82
1.03%
60965-001
Insurance - Property: Oak
$957.11
0.22%
60970-001
Insurance - Worker's Comp: Oak
$1,721.58
0.40%
61305-001
Maintenance - Corp. Auto: Oak
$4,692.79
1.09%
61315-001
Maintenance - Software: Oak
$1,000.00
0.23%
61530-001
Office Supplies: Oak
$1,647.36
0.38%
61535-001
Office Expense - Others: Oak
$915.96
0.21%
61590-001
Over and Short: Oak
($125.00)
-0.03%
61605-001
Payroll Tax: Oak
$4,900.66
1.14%
61670-001
Professional Service: Oak
$205.52
0.05%
61820-001
Rental or Lease: Oak
$24,109.51
5.60%
61821-002
Rental or Lease - SJ
$3,617.00
0.84%
61920-001
Service Charge: Oak
$617.23
0.14%
62020-001
Telephone: Oak
$3,522.60
0.82%
62070-001
Transportation - Gas: Oak
$4,601.59
1.07%
62075-001
Transportation - Toll: Oak
$22.00
0.01%
62170-001
Utilities: Oak
$2,567.42
0.60%
62170-002
Utilities: SJ
$386.94
0.09%
62310-001
Wage: Oak
$90,092.29
20.93%
62400-001
Warehouse Supplies: Oak
$262.79
0.06%
Total

$191,821.31
44.57%
Table 3: Expense of National Auto Parts from 6/1/2013 to 6/30/2013

NET PROFIT:
Total Avenue
$430,352.45
100%
Cost of Goods
$139,648.59
32.45%
Total Expense
$191,821.31
44.57%
Net Profit
$98,882.55
22.98%
Table 4: Net Profit of National Auto Parts from 6/1/2013 to 6/30/2013

Chart1: Net Profit of National Auto Parts from 6/1/2013 to 6/30/2013

Chart 2: Revenue of National Auto Parts from 6/1/2013 to 6/30/2013

Chart 3: Cost of Goods of National Auto Parts from 6/1/2013 to 6/30/2013

Chart 4: Expense of National Auto Parts from 6/1/2013 to 6/30/2013
According to the tables and charts listed above, National Auto Parts LLC has one month’s net profit of $98,882.55, accounting for 22.98% of total revenue.
The Cost of Goods just accounts for 32.45%, which is competitive in terms of purchase cost. In terms of Expense, wage expense is the biggest one accounting for , followed by rent expense.
2.1.3. Competition
There are numerous auto parts distributors serving the East Bay forcing National Auto Parts operate in very aggressive market environment. Here is a screenshot from Google Maps when input keyword “auto parts” on which all red spots are auto parts company.

Picture 1: Auto Parts Companies Distribution
2.2. Online Business Analysis
As the global ecommerce market reached $1 trillion for the first time in history in 2012, selling online has become more attractive than ever. More and more businesses and individuals try to sell online in hope to expand their business and to get higher profits.
Despite the substantial profit of National Auto Parts LLC’s physical store, it may lose customers due to the fierce competition from ecommerce, so it’s time to defend against market feeding by stepping into online business.
2.2.1 Online Auto Parts Market Analysis
According to my research and statistics and ASIN Matching Template given by Amazon inbound manager, there are no more than 50 sellers selling auto parts on Amazon.
Even, among the 15,000 products we are going to sell online, only 3 products hasve more than 20 competitors. The average number of competitors is 4.6.
Hence, we can draw a conclusion that the auto parts ecommerce is sprouting, meaning a lot of opportunities while less competition.
2.2.2. Market Analysis of the Organization
National Auto Parts LLC’s target customers are mainly Oakland’s local body shops and sometimes individuals, while the online store will face customer nationwide, mainly individuals.
3. COMPANY ANALYSIS
3.1 Company’s Competitive Advantage Analysis
As much as I understood from my internship and research on secondary data stored in company’s common information system, auto parts companies require high investment to startup, like assured source of supply, technical software support, stable customer resources, professional warehouse management, etc. Hence, the market is not completely competitive, profit margins are substantial.
The main strength of National Auto Parts LCC comes from its business experience, suppliers and customers accumulated during all years since it set up in 2004.
3.1.1. Company’s Suppliers
There are several manufactures giants in the field of aftermarket replacement for cars: TYC, DEPO, Eagle Eyes, etc. Most of these manufactures are based in Taiwan, for a long time being National Auto Parts LLC’s suppliers whose prices are acceptable and competitive.
On the other hand, “Made in Taiwan” is more and more accepted by Americans. Compare to Native America’s manufactures, Taiwan replacements are more cost effective, and the quality is also SAE1 and DOT2 approved.
3.1.2. Company’s Technical Support
National Auto Parts LLC has its own software to back whole company running - One Source.
One Source is directly related to company’s inventory database, and can reflect the dynamic information.
When the purchasing department buys goods from suppliers and when the goods enter warehouse, One Source will update the inventory automatically.
When customers call in, the salesperson can use several keywords, like car brand, model, year, category to search what product is suitable for the specified car, the price, whether in stock or not, etc.
When order is created, the system will decrease inventory automatically and print out the order information, transferring to warehouse and driver.

Picture 2: a screenshot of the One Source Software
3.1.3 Company’s Customer Resources
Since these years’ accumulation, National Auto Parts has established stable and long-term supply-demand relationship with local body shops and individual customers. The resources can not only help businesses recognize customer segment traits, but also record buying patterns to easier identify their needs.
Beside this, the company’s online store will dig and discover more potential customers nationwide.
3.1.4. Professional Warehouse Management
National Auto Parts has more than 40,000 items of products which value $1,000,000 in the warehouse. They are well organized with labels and two-dimension code.
The company adopts technologies like barcode and two-dimension code to locate specified product, thus system can increase and decrease inventory automatically without error.
3.2 Online Business SWOT Analysis
3.2.1 Strengths
Ecommerce’s strengths are the unique points that differentiate one company from their competitors.
24 hours - 7days -52 weeks Operation
Online store is a store never closes. The World Wide Web operates 24 hours a day, seven days a week. Businesses that sell ready-made products benefit most from this advantage. By creating an Internet store, these entrepreneurs have the ability to maintain a virtual retail shop that never closes, affording the owner the possibility of literally making money in his sleep.
Cost Effective
Opening and maintaining an online store costs a fraction of the budget required to open a physical shop. Advertising online is less expensive than in traditional media, and it allows business owners to reach a more targeted demographic.
Manage Your Store From Anywhere
Wherever the Ecommerce vendors are, as long as you have installed an Amazon APP in your mobile, you can manage your inventory and orders, control shipment, manage your bank account.
Products Reach to Customers Directly
You don't have to have a warehouse to keep your inventory. When the order is created, you can ask your supplier to ship to the customers, which means you are the media between supplier and customers.
Sometimes Investment Nothing, Get a Store
Because of the above feature, your supplier can direct ship out the products to customers, you investment nothing, but get a store.
Customer Review Influence Sales
It could be a double-edged sword. If you can get more positive reviews, then you may welcome a lot of customers.
3.2.2. Weaknesses
Customers May Fear Online Purchase
One of the top problems that all ecommerce merchants will face is excessive Charge backs. With security and fraud lurking in every corner, customers are often reluctant to use their credit cards for online purchases.
Online Selling Price is Much Lower
Compared to physical selling, online selling price is much lower, which will definitely influence the profit of business if you can sell only a few products a day.
The success of online selling is based on mass sales.
Sometimes, Shipping Cost Increase Product Cost
Shipping of products is another issue, where heavy, large, fragile and perishable goods are often a pain and very expensive.
Shipping duration could also open the customer’s options to purchase the products elsewhere.
No Direct Customer-Seller Interaction
Some customers prefer buying by reaching personally to the market, seeing the product physically before making a decision.
3.2.3. Opportunities
Ecommerce is a perfect example to expand a company’s growth and take advantage of areas where the competitor’s vulnerable.
Easy to Increase Product Awareness
Not too long ago, if a person starts a business, he might place a few advertisements locally in the hopes of building a name for himself in the area. The Internet has changed that practice completely. An Internet presence instantly gives his company a global audience. Customers from around the world are able to learn about and purchase his products and services. His potential population of customers is endless.
Potential Worldwide Customers
As time proves, Internet users are rapidly increasing, the internet links everyone on the world together. Besides, more and more are feeling comfortable buying through Internet
exclusively. The internet makes worldwide trading possible and practical.
Traffic Drives More Customers
Established traffic and high number of repeat customers may enable increased sales through the addition of complimentary product lines
3.2.4 Threats
Negative Reviews
Negative customer reviews and feedbacks may damage customers’ confidence and faith in the entire enterprise of Internet marketing.
Low Price Competition
Larger business with greater buying power may undercut price to gain online market share. Customers tend to buy the cheapest, so if we are facing price competition, we must adjust our price to compete with them.
Low Barriers for New Entrants.
Online business is open sourced and everyone can open it. That’s why the potential competition is uncertain.
4. INTERNSHIP
4.1. My Duties and Responsibilities
Overall, my duties are to set up an online store for National Auto Parts LLC.
4.1.1. Research two major online store platforms-Amazon and eBay
After reading and researching huge amount of documents, regulations and charge policies of both Amazon and eBay, I get conclusion of the following comparison:
Cost Analysis:

Amazon eBay Opening fee
$39.99/month,
first month free
4 types,
From $0 to $199.9/month (table 6)
Listing fee
$0
(Table 6) 3
Final-value fee4
12%(include shipping fee)
9%-10%(include shipping fee)
Payment
$0 (Amazon payment)
2.9% plus $0.30 per transaction (Paypal5)
Shipping
restricted6 charge by Amazon unlimited Total
12 % of sale price + $39.99
13 % of sale price7 + opening fee+ listing fee
Table 5: Cost Analysis between Amazon and eBay

No Store
Basic
Premium
Anchor
Basic fees
Subscription fee (Monthly)
$0.00
$19.95
$59.95
$199.95
Subscription fee (Annual)
$0.00
$15.95
$49.95
$179.95
Free-insertion-fee8 listings
50
150
500
2500
Optional Fees
Listing Designer (Selling Manager Pro9)
$0.10-0.3 / item
$0.10-0.3 / item
$0.00
$0.00
Gallery Plus
0.35-0.1/ item
0.35-0.1/ item
0.35-0.1/ item
0.35-0.1/ item
Table 6: eBay has 4 types of online selling: no store, basic store, premium store, anchor store
Structure Analysis:

Amazon eBay Format
Fixed price
Auction10 ; Buy It Now11
Listing Term
60 days
3,5,7 days for auction, 10days need extra fees
30 days for Buy It Now
Table 7: Structure Analysis between Amazon and eBay
Advantages and Disadvantages Comparison

Amazon eBay advantage
Inserting listings Simple, quick12
Longer free listing time (60 days)
No charge for listing fees
Fees are charged after successful transaction
Buyer friendly
Bulk upload products
Lower final-value fee
Customization of web design, product presentation
Flexible format
Seller friendly disadvantage Must have UPC13 or EAN14 or ASIN15 to post products
Money back only after shipment tracking code
Long time deposit of money in Amazon account
Shipping fee is restricted by Amazon
Need approval before opening online store
Higher listing fee
Time consuming, each product needs to post self
Table 8: Advantages and Disadvantages Comparison between Amazon and eBay
Conclusion:
1. We need to post 15,000 products. The listing fees are expensive on eBay.
2. Open on Amazon first because they don’t charge money for the first month and it’s easier to post goods than eBay.
3. In long-term, we definitely need to open online store on eBay.
4.1.2. Call Database
Database is the most fundamental and crucial to auto parts companies. Microsoft Excel is the most important way to use database.
On Amazon, after all the registration process, you can download a template which is used to bulk upload your items.
National Auto Parts LLC uses Microsoft Excel to save and call all needed products information, including Product identification (SKU, UPC, EAN, ASIN), Product attributes (title, description, bullet points), Product images, Product search terms, Amazon classification, etc.
4.1.3. Setup Inventory
Amazon provides two kinds of listing methods: list one by one, or bulk upload.
Because the products we are going to sell as a professional seller are more than 15,000 items, which is impossible to upload one by one. So we are going to use bulk import method, which needs me to fulfill all the required and preferred information.
In the template, there are more 50 different fields need to be fulfilled, for example, the SKU, the UPC, Keywords, Title, Product description, Image URL, Price, Manufacture, Brand and so on. After filling up all these, the inventory was set up.
4.1.4. Research Shipping Fees between UPS and Fedex
There are 3 biggest shipping companies in USA as everyone knows: UPS, Fedex, USPS. But due to USPS’s service is slow, so we mainly choose between UPS and Fedex. Here are the charge policies of UPS and Fedex.

Air
Ground
Large package16
Remark
UPS
16%
8%
60%
UPS can give online business more discount based on these;
Need contract.
Fedex
16%
8%
60%
Fedex can give more discounts if shipping more than 4 packages per day.
No contract.
Table 9: Shipping fees discount comparison between UPS and Fedex
Considering we are just starting up, daily delivery may differ or be uncertain, so we finally decide to cooperate with UPS, which can not only assure standard 2-3 days shipping, but also give us a big discount according to the contract.
4.2. My Achievements
Generally speaking, the online store on Amazon gets opened on 11th, November, 2013.
4.2.1. 15,000 Products Get Edited and Uploaded
VLOOKUP Function
In Microsoft Excel, the VLOOKUP function searches for value in the left-most column of table_array and returns the value in the same row based on the index_number, pulling data from the master table.
It is VLOOKUP function of Microsoft Excel that I used mostly to edit and fulfill 15,000 products into the Amazon Template from so many data without making mistakes.
IF Function
The IF function returns one value if a condition you specify evaluates to TRUE, and another value if that condition evaluates to FALSE.
I used IF function to compare the potential profit between online store and physical store. When the profit of a single profit is more than 10%, then filter it out. This helps us to decide whether to sell this product or not.
Excel Formulas
When using Formulas, you can compare two values, perform mathematical operations, concatenate (join) one or more text strings to produce a single piece of text, and Combine ranges of cells for calculations.
It is also widely used while conducting the Amazon template when need to enter the ideal price, using keywords to search online price and images.
4.2.3. Price Matching
A good offer starts with a great price.
Price will influence the following six factors:
Sales Volume
Sales Revenues
Market Share
Competitive Position
Business Image
Profitability
When developing the price structure, we are considering the following factors:
Cost of Goods
This cost includes the price paid for the merchandise plus freight, import duties and handling costs.
Operating Expenses
This cost includes warehouse lease cost, the salary etc.
Competitors’ Price
Customers tend to choose the lowest price in Amazon Marketplace.
Our Price should be set equal to, or below those of our competition. Because we are new entrants, low price strategy is the only weapon we can use. However, the price online and in physical store is totally different. There are a few reasons for this. First, online stores face worldwide competition while physical stores can form local monopolistic competition. Second, online stores don't need too much investment on warehouse, labor and management, so the total cost will be lower. Third, some online stores undercut to attract more consumers, which is a threat to new entrants.
Hence, we need to do lowest price match, which is especially important for new entrants who don't have positive comments supporting effect. I searched the prices of 3,700 best selling products on Amazon, which are used to set our price.
I also developed a formula according to the cost: (original cost + shipping fee) *112% *140%. (Original cost + shipping fee) *112% is the total cost of selling on Amazon. 140%, among which 40% is the ideal profit portion. This formula is for the less sold products.
4.2.4. Enter Account Settings
Confirm business name
During the registration process, I was asked to provide both business name which will be shown on the Amazon site and legal name and address which is stored in your account for Amazon’s reference. The business name shown in Amazon we used is Tri-Cloud Trading, rather than National Auto Parts.
Contact information for Amazon and customers
The Amazon needs e-mail address and phone number to contact me with order notifications, Guarantee Claim notifications, as well as service and technical updates. It also allows customers to reach you if they have any questions about their orders.
Payment information
Amazon sales funds will be disbursed to the seller’s bank account once every 14 days. Setting up payments account is not just for receiving money back, also for paying monthly fee and service fee to Amazon.
4.2.4. Online Store Open
Amazon has a special segment “Seller Central” where you can upload or drawback your inventory; manage your order, ship out your products, etc.

Picture 3: Webpage screenshot of Amazon’s “Seller Central”

Picture 4: Webpage screenshot of Amazon’s “Seller Central” (continued)
4.2.5. Set up Database for Online Selling
The methods I used to create inventory is universal for all online selling, and the data we collected is universal for eBay and other platforms.
5. LEARNING CURVE
5.1. Application of Knowledge Acquired at Lincoln University
The knowledge I learnt from Lincoln University played a vital role in my attempt at becoming successful in this internship. I was able to apply the knowledge like cost analysis, platform choice, price setting strategy, business model research, to better understand the company and its operations, management, marketing, as well as to make critical decisions for the benefit of the company.
All the classes I took played a fundamental role in my decision make process. For example, the Financial Accounting course helped me to compare the cost-efficiency of Amazon and eBay. The Survey of Business course helped me to understand the form of LLC (Limited Liabilities Corporation) properly.
5.2 What I learned while working at National Auto Parts
In retrospect, I can confidently state that I greatly benefited from my tenure at National Auto Parts LLC. in a number of ways.
5.2.1. Attitude Decides Everything
The manager told me to assume the online store is my own store, and also gave me the right to make decision.
I run this online store with full passion and patience as if it is my own store. I decide which platform to choose, what products to sell, at what price to sell etc.
5.2.2. Define What to Sell
In the warehouse of National Auto Parts, there are more than 40,000 products lying there, but not all of them are suitable to be sold online.
The products selling online should be light, nonperishable, and simple for individual to install. So we choose door handle, mirror, lamp and radiator to sell online.
5.2.3. Define the Target Market
Target marketing is the practice of identifying a product’s ideal customer and targeting them to maximize sales.
5.2.3. The Importance of Database
If you want to expand the product line and scale of your business, it’s necessary to build database of your products.
Microsoft Access and Excel are the most important and strongest methods to save inventory.
5.2.4 Marketing Strategy Helps Sell More
Social Media Marketing
Use social media like Pinterest, Twitter, Facebook, Google+ to market our products.
Email marketing
Send email to interested buyers who subscribed
Official Website marketing
Post online shop entrance on our official website: http://www.napoakland.com/
6. CONCLUSIONS AND RECOMMENDATIONS
6.1. Conclusion
National Auto Parts LLC has a vision to lead the auto parts market in America. My internship experience at National Auto Parts LLC was overall great and creative. It has superb company culture and great working environment. Ever since I started taking an interest in this internship, I really did not think that my experience with National Auto Parts would be so interesting and enriching.
I worked for a very short period of time with the company, but I learned a lot. I was able to apply my knowledge that I gained from Lincoln University into a real-life scenario and see the positive results that motivated me to work harder.
Another aspect that really motivated me was the opportunity to work as an intern with a creative position that nobody else in the company tried or came up with. The online selling department is my work-out.
Besides, interaction with the management and employees benefited me as I was able to get a lot of knowledge about the company and the industry by getting training, observing and performing the tasks that I was assigned, providing recommendations that would be beneficial to National Auto Parts LLC.

6.2. Recommendations
No one is perfect in this world and there are always rooms for improvement. After my internship in National Auto Parts LLC, I have developed several recommendations:
6.2.1. Offer Incentives
National Auto Parts LLC competes in a free market. In order to increase customer sales volume, the company should offer some kinds of incentives, or special prices for the customers to stimulate and achieve more sales.
6.2.2. Create Brand Promotion
National Auto Parts online store is a new entrance needs brand promotion. Setting its online business vision, culture and logo is necessary for customers to go to.
6.2.3. Provide Fuel-Efficiency Products
Aftermarket suppliers do need to be able to keep up with new technology. Higher fuel prices could be an opportunity for aftermarket suppliers by providing incentive to purchase fuel-efficiency technologies, and keeping vehicles maintained for better fuel efficiency.
6.2.4. Offer Additional Benefits to Employees
Offer additional benefits to the employees to make them happy and try to keep them within the company. Organize employee gathering, picnics, and dinners to strengthen the employee management bond.

7. BIBLIOGRAPHY
1) Understanding Business, by William Nickels, James McHugh and Susan McHugh, ISBN: 978-0073511702
2) Introduction to Financial Accounting, by Charles T. Horngren, Gary L. Sundem, John A. Elliott and Donna R. Philbrick, ISBN: 978-0136122975
3) On the Road: U.S. Automotive Parts Industry Annual Assessment 2012, by U.S. Department of Commerce
4) Income Statement of National Auto Parts – Oakland, from 6/1/2012 to 6/30/2012
5) The Horseless Age (on Google Books)
6) http://www.seller-amazon.com/: Amazon Seller Central
7) http://www.ebay.com/: eBay Website
8) http://www.napoakland.com/: National Auto Parts LLC’s Official Website
9) http://office.microsoft.com/en-us/ : Microsoft Office Support
10) http://www.ups.com/ : UPS Official Website
11) http://www.fedex.com : Fedex Offical Website