Whether it’s iSelect, Compare the Market, or Finder, there is no scarcity of product comparison sites in Australia. These digital platforms have become the new ‘second opinion’ that consumers use to help them make informed purchasing decisions. Most of these types of services exist within the FinTech and insurance sectors, and are driving millions in sales for that space.
New Sydney-based startup Tyre Compare, founded by Matt Banks, is applying the same methodologies used by these large insurance sites for tyres.
“The idea for Tyre Compare came about when, as a customer, I had a rough time buying tyres for a truck that I had,” says Banks. “The journey I was on trying to buy these tyres was more painful than it needed to be because of the way the industry is structured. I had to phone and visit a lot of retailers, and when I turned to the internet, all the websites were just store locators and the cycle of calling and visiting just started again.”
So Banks created a new platform that, from a UX perspective, has a similar feel and familiarity to an iSelect or Health.com.au, where users can log on, input the details of their vehicle and their postcode, and be shown a list of dealers and retailers in their area with a number of “buy now” style deals on tyres, solving the headache in a matter of minutes.
The startup officially launched in August 2014, but this year has seen a lot of traction regarding onboarding dealers / retailers and acquiring a significant number of users. One of the biggest challenges that Banks faced was that the tyre industry is one that is stuck in the past – many dealers are working with old technology, with few having a website of their own.
Many in the industry have their tyre inventory sitting in their heads instead of on an online database. Banks’ challenge was to show them that, by using the Tyre Compare platform, not only would they give their businesses an online presence, but the platform would help drive sales in through the door.
“Convincing dealers to come on board was about me getting on the phone and talking about the solution with them, to offer the retailer a way to provide a service and present a solution to the consumer,” Banks says. “If we can help the customer shop, we can then become a reliable source of revenue for the tyre retailers. Most tyre retailers that sign up with us want to be on the online space but they don’t know how.”
Tyre Compare offers these retailers a very low cost e-commerce solution via a SaaS and clip-of-the-ticket model. Retailers pay a $29.70 subscription fee to be part of the platform each week and on top of that Tyre Compare also takes a 7 percent to 9 percent success fee. While that means that the SaaS revenue stream is quite lucrative at scale, the real success and money is made from sales being made on the platform.
The weekly fee covers administrative and management costs the retailers account, which in reality would be considerably less than paying someone internally to do a similar role involving inventory management and marketing within their business.
Right now, nationally there are 300 paying retailers that have come on board the platform, and Banks is focusing on rolling out all major metro cities to begin with.
Bootstrapped for now, Tyre Compare is beginning to explore raising a seed round; Banks has told Startup Daily that he will be looking to raise around $500,000.
Interestingly, most of the customers currently using the platform are females. Feedback suggests that being able to make an informed choice and compare efficiently is a major part of the platform’s growing success with the demographic.
“That’s part of the reason I started this business,” says Banks. “No matter which retailer you find, they’re always trying to sell you what’s in their best interest and push product that’s out the back. With Tyre Compare, you make up your own mind without the influence of any of the retailers, but you also have the benefit of having all their inventory in front of you. So in your own time, you can make up your own purchase decision.”