We are trying to put our heads together here at WCCC and come up with some solutions to some very common problems. Due to the surge in popularity of the early Cougars in recent years, we cannot meet demand for many parts. We have a multitude of suppliers and factories coming to us ready to do business with us and they are giving us competitive quotes on parts of top quality with reasonable manufacturing runs of 500-1000 units at a time. We have customers literally begging for products that cannot be found anywhere at any price. We have been able to do about 4 dozen WCCC exclusive parts and the response has been very good. But… These investments do not pay back overnight. Rarely do we see a financial break even after one year, usually it takes 1-3 years to break even when you factor in tooling costs and everything else that goes into making a new part. We are looking at creating a separate entity whose sole purpose is to raise capital and bring to market new reproductions. There is nothing new about what I am trying to accomplish here but I feel our customers are of a different breed than you average investor. I am thinking the customer who is considering investing in WCCC would be willing to engage at a different level than many investment vehicles out there. My idea lets the customer choose which part he wants to be involved in directly. We have the opportunity (for example) to get 69-70 fuel door lenses made for under $25 if we will commit to 1000 of them. If you own a 69 and need this part, it may mean more to you then say a 71 xr7 door pull strap. This means some investments will pay off sooner than others as opposed to pooling all monies and paying out an average or set amount of return. From an accounting perspective it could be a challenge but I can see the average Cougar owner being vested at a different level when he can see the tangible results of his personal financial outlay. He would be a part of the approval process, get the first prototype to use on his car and maybe be an enthusiastic advocate for WCCC at shows as he can point to “his” project. The other method seems like I am just turning my customers into common members of a co-op. What do you guys think? Would you be more inclined to want to pool your money (less risk) or pick your own pet project (More fun)? Also… Do you guys know of any other sites that are doing something like this? It’s great to have this group to bounce ideas of of, thanks for hearing me out!
When we consider that the options are:
- continue parting out solid cars and cannibalizing marginal cars that could be revived, eventually running out of donors…
- create a new parts market so the marque will continue on for some period of time
I like option #2 as a long term strategy.
I would totally invest in something like this, provided I could afford to do it. 
69-70 fuel door lenses is one part, do you have a list of other parts to give some other options? I have plans in the future to make a couple parts for the XR7-G. One of them will come to pass some time this year. I know this probably doesn’t count, but it just means more available parts for ours cars.
Interesting concept Don, but I can think of a whole slew of problems with that type of transaction. First of all, if you call it an investment you are opening yourself up to scrutiny by the FTC. I can’t give you any specifics as to what may apply, but I have seen people do jail time when a bunch of angry “investors” don’t do as well as they think they should have. Sometimes the intent doesn’t matter, only the expectations and the results.
If you structure your deal like the website you linked to, you are asking people to give you an unsecured loan. That puts all the money at risk. No offense to you, but what if WCCC goes under? I’m sure you don’t think that way, but what if something catastrophic should happen? If I was to consider writing you a check, I would have to consider that possibility.
Which brings me to my next issue. Let’s say I’m all excited about being involved with making some new Cougar widgets. These widgets are going to cost $25 each and we have to buy 1000 of them. I’m guessing the minimum you would need from me would be half. So what is my cut going to be? To be honest my expectations are going to be pretty high considering all my money is at risk. Even if I ignore the worst case scenario, what if they simply don’t sell? If it’s a Cougar specific part the market is very limited. There would be a certain amount of satisfaction to helping bring a new part to market. But I don’t think there are many that are willing to shell out a big chunk of money for that reason alone. With a substantial amount of risk there has to be the possibility of a big reward. Otherwise it’s just a fools errand.
I don’t mean to appear negative about the idea, these are just some of the things that popped into my head. I would actually consider getting involved if you could present a reasonable argument why it would be a fiscally sound decision. I don’t need any guarantees, but I do need to know I’m not just flushing my money.
Yes! Everything from $1000 runs of T-shirts to correct Cougar oval air cleaners that will cost about half of the incorrect ones currently being offered on our site. Smaller investors could take on concours correct 68-73 lock knobs or 67-79 turn signal wands. Larger investors could take on 1968 Headrests, correct looking 68-73 AM-FM Radios and the like. I have several in the works now and easily could come up with another 100 viable parts.
I would love to invest into making this a possibility. Bundy does make a point, but I think the concept is good. You just have to be very careful of wording and risk.
If you get this off the ground I could see you “building” a first gen Cougar from all your parts, like Year One, for SEMA.
Correct… I am not going to structure a bit of this myself, that’s where the pros come in, spent quite a few hours in meetings already. The amounts of money we are talking about are going to have less restrictions than some of high profile cases we have heard about as of late.
One way I have done it in the past is the investor actually takes physical possession of the parts and dribbles them out to us as we send cash. Others (including members of this forum) have placed their parts on consignment with us and trusted us to cut a check every-time we dip into the crate or pallet of widgets. However I structure it, I do not want to own all the parts at once! My inventory levels are killing me at tax time. [/quote]
One idea is you would be writing a check for 100% of them and I would pay %100 of the retail sticker price each time I sold one even if I sold it at 10% off on one of our specials or sold it 25% off to NPD, CJ Pony Parts, MU, Scott Drake or one of the many others we currently wholesale to. Yes, I would loose money on every transaction initially but when you got all your money back plus a nice fat profit, the rest of the remaining widgets would belong to WCCC free and clear. If you selected a home run part you would get all your money back in 12 months and your profit in under 4 months. If you happen to select a slow performer it may take 3 years to get your initial investment back and a year to see your promised profit. I plan on setting it up so WCCC ends up somewhat vulnerable but with a very transparent, profitable program like this, we anticipate having more investors than potential parts ideas thus we will be able to hand select who we offer to bring into the program. BTW, I forgot to mention the perks of being an investor! Like the company I linked to, there would be substantial discounts for investors… Up to 30% on some items, 10% on everything. Keep in mind these are just ideas we are batting around with the accountant and a very sharp consultant, might (most certainly will) look a lot different once the attorney gets a hold of it.[/quote]
For some, they will want the rock solid investment with a proven track record. Those folks can buy into already proven, profitable parts already in our warehouse. One part in mind is our AC vents. Each time we have to do a run it is 2000 pieces, not cheap parts by a long stretch but since they are built into multiple vintage Mustang / Cougar aftermarket AC systems on the market today, you can be pretty well assured they will do just as well this year as the last three years, probably better… Want to put them in your attic? No problem! I am getting tight on warehouse space, just drop ship them to Old Air Products and Vintage Auto Air on a weekly basis and everyone is happy.[/quote]
No offense taken… Before we put together an investment plan /packet I need to address everyone of these questions and many more so that is why I am throwing it out here first. Quite frankly we are in a really sweet spot here at WCCC. We have the samples nobody else has (in one place) and we know what sells, the other guys who do not do salvage often are shooting in the dark and they often lose, we have NEVER lost. The Mustang market is beginning to look very saturated and companies like Drake, Carpenter and Dynacorn or showing up at our place in person drilling us hard for the next parts to reproduce. I do not mind sharing our knowledge and samples with them, they have all treated us VERY well but why not spread the wealth and talent pool? That’s where my customers come in. I have actually been doing variations of these ideas for years on a small scale, its now time to go public, make it professional and make it HUM!
Dynacorn has in fact bought a 67 Cougar body from us. They claim demand on their current products is so great they have yet to be able to do much with it. They also said the Tsunami set them back. Why the heck this sector of the economy is doing so well confounds me…
I appreciate the response Don. It really does sound intriguing.
“One idea is you would be writing a check for 100% of them and I would pay %100 of the retail sticker price each time I sold one even if I sold it at 10% off on one of our specials or sold it 25% off to NPD, CJ Pony Parts, MU, Scott Drake or one of the many others we currently wholesale to.”
One thought I had when reading this statement was if I was going to put up the money for a part, I want WCCC to be “fully committed” right from the start. That’s not really coming out the way I want to say it, I couldn’t come up with the right words. What I mean is, I think it’s better to have WCCC making a profit when they’re selling the parts. I want the guys that are selling the most Cougar parts pushing my stuff as much as their own. Human nature would be to give stuff you’re losing money on lower priority. Let’s say our $25 widgets retail for $50. If MU wants 100 of them, that means WCCC would lose $1250 by paying me full retail. That’s great for me to get paid quicker, but as a business owner it has to make you cringe a bit. I understand long term it works out by having a box of parts with zero cost. But the short term pain might be a bit much.
Of course I like the idea of a built in discount. Who doesn’t like a deal. Warehousing parts myself, not sure. I guess that alleviates some of the concern in the event of a catastrophe. That’s one of the big hurdles. It isn’t a matter of trust so much (from my point of view anyway), but let’s face it any one of us could get run over by a bus tomorrow. Without Don Rush there probably wouldn’t be a WCCC. But of course one would have to have a place to store the parts. I guess if space is tight, you need to choose a small part. 
I can’t think of any more questions or concerns at the moment. If you do work out more details, please consider me to be an interested party. This could be the distraction from my regular business that I’ve been looking for.
Don, you mentioned 68 head rests, is this already in the works or a needed part that we need someone to step up to the plate and make? I guess this goes as well as the turn signal wands as well. Are all the wands the same?
Morning all,
After reading about this, the one thing we need to do is come up w/ a list of parts and then priortizing it. Then get a # asigned to it as a rating on cost, size, run amount, possible market and return time. The community would be a great help rating each item. Then those who have all that extra cash sitting around then can choose the item(s) or route to take.
This is a interesting idea…
Don,
If you want to move forward with this, I know of the perfect vehicle for launching parts (no pun intended), it’s a website called The Point. It’s at ThePoint.Com, and it’s perfect for this.
The way it works is, you set up a group action on the website-- it has details and it has a “tipping point”. People are then allowed to pledge whatever dollar amount they will pay towards the action, and nobody’s credit card gets charged until the tipping point is reached. So if not enough capital is there to pay for the run, nobody gets charged. If enough is there, then at that point everybody gets charged.
I know the guy who invented it, a jackass here in Chicago who after demonstrating this concept went on to launch an even bigger and more successful website (with big financial backing) that most everybody has probably read about if not actually used by now, Groupon. He’s been on covers of magazines and junk.
I think ThePoint could be perfect for what you wanna do here.
I don’t know if they would be viable, but an alternative to the $500 that the cruise control wands bring would be nice. Maybe if they fit other models. One thing I think I would be particularly interested in is correct '68 trim rings. It seems like everyone needs those.
I’ll chime in here with a question or two. I like the idea of what Don is offereing/investigating. Being a small business owner myself, it doesn’t hurt to try to find ways to better your business.
How would this work out tax wise for the investors? Let’s say I invest 1000.00 into a widget and at tax time I am assuming the investor would have to report this on their taxes? Right? I assume that WCCC would be reporting or 1099ing or something to that extent on their taxes.
Secondly, if I have these widgets in my storage, I now need to ship this stuff out to WCCC when orders are placed. Is your model going to have shipping directly to other vendors directly or just to WCCC and then WCCC will handle the shipping from there?
I am intersted to see where this goes.
Bill
I would think there would a no competition agreement which would allow you to ship directly to the other vendors. That would save WCCC the freight and also protect them from other vendors trying to cut them out. Of course any retail sales by them they would want to ship themselves.
Just thinking out loud, not trying to speak for Don.
For many of these parts, the likely manufacturers will be offshore. That could put the individual investor in the position of becoming an importer, with all the federal regulation that implies to deal with. Has that aspect been investigated at all? Is WCCC going to be the importer of record for all the parts?
Good point! I will start a thread now.
While I’m no expert, by any means, my take on it is this: The economic down turn has made many people now more conscious of thier money decisions. While it has always been more cost-effective to fix up an old car for $2-5k than to endebt yourself for 5+years on a new car that costs $20-40k, in the good-times it wasn’t as big a deal since there was “plenty of money” for a new car.
Don, you mentioned “small investors”. What sort of investment dollar range are you looking at? $1,000 minimum?
Hmmm, This is a very interesting concept. Once the legal and how the parts would be controlled is worked out I could see myself investing in some parts being made. I could see the parts stored and shipped out from WCCC, but with the investor owning them as that will reduce WCCC taxed inventory and cost. I would want my investment returned first. Then the profit, and then WCCC takes over from their. I believe Don would push just as hard to sell them, and get to the point he is selling the part free and clear. The downside would be investing in a limited market with a slow selling part.
After doing a complete restore I can think of a few items that could be done. The number one that comes to mind is correct kick panels with the speaker holes as these could go to Mustangs as well. I actually though about doing this until I spent fours hours on a drill press making a repo pair correct and decided I couldn’t make money with my method. Setting up correct tooling to do it could pay off. Just about every Cougar/Mustang needs new kick panels, so I wounder what the percentage is that have front speakers and would like the correct holes in the kick panels?
Yes… $1000 would do a large run of T-Shirts and while we do not really need help paying for small items like T-Shirts, it does help to engage a potential investor. If he likes what he sees, he may want to go for $5000 next time. If that works out then he may want to do $10,000 so he can utilize the across the board 10% discount and %30 discount on WCCC exclusive parts. If you are someone who drops $10k plus (and there are many) at WCCC over the course of a project then the investment pays off even better when you factor in a $1000-$2000 discount on your tab!