THE DPE STORY

I’m not sure if anyone is still visiting the site at this point, but as promised here’s a little writeup of the aftermarket performance parts industry and our time in it. It’s hard to know how to structure such a document because there is a lot to say and I’m not exactly an English major, but I’ll do my best to make this cohesive. For anyone wanting to go into this business, you may pick up a few pointers here.

For the sake of background, DPE was essentially a one-man-show as far as day-to-day operations. It was run out of my house and garage. However, I did have two extremely generous business partners who donated countless hours of time; one of them built the entire website from scratch (yes, he’s a talented fellow; TheArchitect on RX-8 club, or Craig as we often call him), and the other handled all of the graphic design and marketing efforts. DPE was my sole occupation for 2.5 years.

DPE went out of business for a variety of reasons, but suffice to say it wasn’t profitable or I’d still be at it in one form or another. I think given more time and money it may have become so, but sales weren’t growing fast enough for me to continue to go into ever-increasing debt to keep it afloat. The reason people go into business is to make money, and DPE wasn’t able to do that. Pretty simple, really.

So what went wrong? Plenty of things, as with any startup business. We did a few things right as well, and I’ll elaborate on those, but we’ll start with the negative….

1. Focused on what we like.

The idea was to capture what seemed to be growing markets within the import car scene. We all (ourselves and our friends) liked and drove WRXs, 350Zs and RX-8s, and could claim at least a little expertise in those platforms. Not inherently a bad idea to concentrate our efforts on those particular vehicles, along with other sporty Mazdas, Nissans and Subarus. We also like to turn and stop at least as well as we accelerate, and are probably better suspension tuners than engine tuners. We also don’t care much about appearance, preferring the sleeper look on the road and at our local road courses. So we decided to focus more on suspension and brakes for those platforms. Inherently a bad idea. While there are a few others like us out there, most folks like to go fast in a straight line and look good doing it. Or just look good period. And there’s certainly nothing wrong with that. We just didn’t cater to that market, and it hurt us accordingly.

2. Competition, points of difference.

What I believed was that, despite the ease of searching for the lowest price on the internet, a number of people would value customer service and technical insight and that could win the day over them saving $10 or $30 or what have you. In general, it didn’t. We had good prices on a lot of things, but it’s nearly impossible to be the lowest price out there. What I wanted to do was mark everything up X% and I built my cashflow models around that. In reality, margins were thinner, costs were higher, and price sensitivity was a big factor. People really like good customer service, which we had, but the low-price leader usually gets the sale if they aren’t total idiots. Which many of them are, and sometimes they get the sale anyway, but so be it. With our customer service levels and my charming pesonality, a brick and mortar shop would have likely been more useful for playing to our strengths (customer service plays even better in person than online), but we never got there. The idea was to open up as an online retailer first, get some business established, and then move into a shop. As it happened, I wasn’t ever quite confident enough to make the transition and buy equipment and get into a lease and hire someone to help me out. Once you go there, you spend lots of money fast, and I didn’t want to dig a hole I couldn’t climb out of. It might have saved the business, or I might have gone bankrupt. Not sure which, but as it stands right now I’m glad to not be bankrupt.

3. Bought too much inventory.

So we’ve focused on particular cars and particular aspects of what we like, and then we go off and BUY the stuff we like as well. The idea being if we had it in inventory we’d have a leg up on most of our competitors, and customers would quickly learn that we could get parts to them quickly. That was partially true, as we did earn a great reputation for fast and reliable service, but that doesn’t change the fact that we had numerous items in inventory for WAY too long. And to sell some of it we had to sell it for a loss just to get rid of it. Kept a lot of money tied up, and had to pay lots of interest on it. Once we figured out what sold and what didn’t, we got things lined up a little better, but by then the damage was done.

4. Got in with some really marginal vendors.

Another thing we tried to do was only sell parts that we’d put on our own cars. However, you can’t test out everything ahead of time, and there is an astounding amount of junk out there. And sometimes even when you could test things out, you’d discover just how bad it was only after a lot of time and energy was expended. Not to mention a lot of money. I won’t name names to the negative, but here are some fun examples:

• We did a buy-in with one suspension company and ordered several spring kits and a coilover kit. Of the four part numbers we ordered, exactly one fit correctly. The coilover kit screwed up the alignment and interfered with rear tire clearance, one spring kit literally didn’t fit, another spring kit went on okay but lowered the rear of a Maxima a bit more than the front (not a good look for a Maxima), and the other spring kit fit well but lowered a Z entirely too much without some additional alignment adjustment parts. Which of course there was no mention of needing. And this was a German company, not one from China. They’ve supposedly been in business for a long time in Germany. I’m unsure as to how. And while I won’t say who it is, I will confirm it is NOT Bilstein or H&R, both of which seem to make mostly fine products.
• The worst was a brake company. We bought one set of STI OEM-size rotors, a 4-pot 350Z front BBK, a rear BBK that extended the caliper bracket and used a larger rear rotor, one 6-pot 350Z front BBK with 355mm rotors, and a WRX front 4-pot BBK. The STI rotors cracked after one track day. The rear Z BBK rotors cracked in less than 200 miles. The front Z 4-pot BBK had leaking caliper seals after 2 track days and maybe 2k miles. The front WRX BBK pistons seized on one side after maybe 6 months, and both front rotors cracked. And when I say cracked I don’t mean surface cracks like all rotors get, I mean cracked all the way through the rotor. The kicker was the 6-pot Z BBK. Figured that might just be adequate to stop a Z on track. Instead, on the second track session just as he was getting warmed up, the caliper seals failed completely and the pedal went to the floor. Fortunately in a good spot on track with some room and he kept it on, but suffice to say that one led to some angry phone calls. I mean, I understand we’re ‘power users’ of this type of equipment what with going on track and all, but these were on mildly modded cars not running R-comps or anything of the sort. Just pathetic. Needless to say we immediately took all of their parts off our site and didn’t speak with them again. I cringe every time I see people on forums extolling their name. And again, I won’t say who it is, I’ll just confirm it is NOT Stoptech. Stoptech makes great stuff.
• Another brake company that puts together Wilwood kits. One caliper showed up with bare aluminum exposed due to grinding to clear the rotor. Not a big fan of grinding on calipers. But the real trouble was, they only did it on one caliper. So was it supposed to be ground down or not? Turns out it was, but we sent the kit back and opted not to deal with them again either. And actually this was another Z kit, and prompted us to make our own Wilwood Z kit which worked quite well, but we never went into production as we didn’t believe enough Z owners really cared enough about brakes to buy a kit from a company that wasn’t known for producing brake kits.
• A suspension and exhaust company that makes some good stuff, but some doesn’t exactly fit right. Or fits, but might fall off during use. That sort of thing. Oh, and instructions? Torque specs? Baseline coilover settings? Forget about it. Heck, they even started making wheels that looked nice, and when I asked if they were hubcentric for specific cars or used rings the guy didn’t know what I was talking about. He didn’t understand what ‘hubcentric’ meant. And this was a lead sales guy in the USA for this Japanese company. I understand if you don’t know the specs of everything off the top of your head, but in my world you should at least know the basics. And wheels aren’t all that complex.
• A Japanese tuning company that makes all kinds of stuff sends me coilovers for a US spec car with instructions in Japanese. Forgivable for a new company, not so much for a company that’s been in the USA for 15+ years. No, I don’t need instructions to install coilovers, but that’s not the point. A customer might.
• Numerous hit-or-miss companies that make some stuff just right and some stuff just so wrong. I think the average consumer may have more tolerance for tweaking things to fit than I do, but hey, I like things done right. I’m probably missing a few good stories, but this is getting awfully long already.

4A. Vendor packaging and shipping.

Not necessarily a cause of our demise, but at least half of the vendors, if not more, couldn’t package their products to save their life. Or to save their product anyway. When the stuff comes over on a pallett from Japan or Europe, it’s generally going to stay upright and not be subjected to a lot of abuse. However, once it gets into the hands of any shipping company in the USA (be it UPS, FedEx, USPS or DHL), it’s going to get thrown around a bit. Occasionally stuff was damaged because those guys were too rough with it, but 90% of the time it was damaged because it simply wasn’t packaged well enough. I was generally able to clean up or touch up and repackage most items, but I spent hours upon hours doing so to make sure my customers didn’t get stuff that looked like it was already well used. And that was time I’m certain I could have spent doing other things. Like marketing….

5. Marketing, marketing, marketing….

This was our most fatal flaw; we’re not good marketing types. We had a marketing guy, but unfortunately he was halfway around the world and wasn’t in touch with the particular nuances of the aftermarket performance parts industry. Not his fault though; he had a lot of good ideas, I just didn’t implement them well and keep doing the same things consistently, which is what needs to be done. When you’re running a business by yourself, there’s so much to be done that you can’t give your full attention to everything, and you tend to avoid the things you’re not good at.

The other problem is I’m not a sales guy. I’m not a ‘type-A’ personality fellow who can bounce around multiple forums every night answering questions and really getting the DPE name out there. I have what you might call a life, complete with a wife, little kids, the whole bit. But a promoter with boundless energy is precisely what a new company in this business needs. Constant exposure and as many contacts as you can get. Proof of this is everywhere. There are vendors out there that have horrid reputations when you really look for negative feedback on forums and such, yet their name is EVERYWHERE. And people keep buying from them. Oh, they might have to wait a couple months for something that was promised in a week, but hey, the sale is made. And that’s just the bad ones. There are plenty of mediocre companies out there that sell stuff and some that manufacture marginal parts. Yet they go nuts on marketing, and thus are successful. And I’m not condemning these folks. They are in business to make money, and they’ve found the best way to do it. Good for them.

Anyway, those are the main reasons that DPE didn’t work. There are no doubt many others, but I have no time to write a book. We also did some things well, the most obvious being customer service. I don’t believe there was a single issue in nearly 1000 transactions that wasn’t quickly resolved. And 99% of the time, there were no issues at all, just happy customers. I am proud we were able to do that, and keep our name on forums in a positive light (as far as I know). We also reached out to the international market, selling to 11 different countries. We even shipped an entire engine to Sweden with the help of DHL. That certainly kept things interesting.

As for what I’m doing now, I sadly had to sell off my sports car (for now) and purchase a used SUV. Not going to lie, it’s my first automatic transmission vehicle, and my first SUV, and I hate driving it. But on the flip side, it’s necessary for my new occupation in the oil and gas industry, which is a decent place to be right now. You just can’t drive a sports car out onto oil leases. Or at least it’s not a good idea to.  I’m with a small company doing a variety of different things for them, and we trade on the bulletin board under EJXR. The company name is Enerjex Resources (www.enerjexresources.com), based out of Overland Park, Kansas. I’m not saying you should put all your money into our stock, but I’ll just say it probably wouldn’t be the worst investment you could make. 

So that’s the story of how DPE came and went, in a nutshell. I had a good time, got to play around with a lot of cool stuff, and always had an excuse to go to the track (I HAVE to test out the new parts, honey!). It ended up costing me a lot of money, but I think my children will still have food and shelter so it’s not the end of the world. I’d certainly recommend to anyone who wants to be in this industry to give it a shot, but there are more pitfalls than you can imagine and you have to make sure you want to run a business first and play with cars and parts second. I didn’t have much trouble with that aspect, but a lot of guys I talked to over the years sure did. My troubles are listed out above, for your reference :). In closing, I’d like to thank my customers from all over the world for the opportunity to meet you and earn your trust. It was a lot of fun, and despite the overall result I’m still glad to have given it a try.

You can still reach me at phil@dpeweb.com for the forseeable future, so don’t hesitate to email me. And with any luck we’ll keep the dpeweb.com site up and going, and use it as a site for commentary on all things automotive. And maybe some things that aren’t automotive. And if you’re ever in the midwest attending a track day at Hallett, Mid-America Motorplex, or Heartland Park, be sure to look us up as we like to get to those places as often as possible :). Despite not having a sports car for myself at the moment, I’ve got generous friends that will donate seat time (in exchange for all those cheap parts I got them :) ) and a generous wife (I hope) that will occasionally allow her 6spd TSX out to play. I may be out of the business, but I’m still a diehard car enthusiast and always will be. Keep the shiny side up!

Phil Frick

Driven Performance Equipment