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Diagnostics

Designing & selling an online diagnostic training course

I saw a great opportunity to make money selling diagnostic hardware & software

DATE

2010

COMPANY

Diagnostic Training and Sales

INDUSTRY

Business

Introduction

After needing to buy a diagnostic tool myself to use for a car sales business. I saw other people were selling tools with quite good success. So I set out to import them myself. Ending up being invited by UK garage owners to train staff and install software. 

Sold software and hardware

Made £600 on average per day selling software. £200 selling diagnostic hardware every day.

Offered diagnostic repair service

Offered diagnostics service to Joe Public. Converted £40 sale into full repair work £300-£900.

Created training courses

To help improve sales. Created online training courses for diagnostics and repairs. Also allowed people to install software themselves.

Trained garages and staff

Garages then employed me to install software and hardware in their workshops. And to also train staff on use of them. As the business owners were too busy dealing with things that would actually make them money. Taught over 1000 people. 400+ garages.

Situation

After leaving University I needed something to do, a way of making money. Otherwise my decision would be wasted.

What better way to start searching for ideas than stick to what I already knew, which was sales. I trawled through the largest e-commerce stores to see what was selling and how much money people were making. eBay was one of these marketplaces.

As I had already been involved with vehicles I looked for items that could be used in and around them.

I saw two trends that were huge.

  1. Vehicle diagnostic software was selling by the bucket load.
  2. Diagnostic cables and hardware were also selling in the thousands.

It was unbelievable how many sales were happening for these items.

I began a test by purchasing some items from existing sellers in the UK and then reselling the same goods cheaper. Under-cutting them by some margin just to see if anything sold. It did. Every single item I put up sold for the money I wanted.

The hardware would be the type that would connect to the ECU of a vehicle.

The software would be a Disc, that you install in a computer. It contained all of the manufacturer repair information and servicing guides, wiring diagrams and general vehicle data.

Hindrances

– I needed a way to ensure the money came rolling in consistently.
– I needed to beat the competition.
– I needed to find a way to buy the stock at a low enough price to maximise profits and be competitive.
– Some manufacturer’s tried to stop me from selling goods. 

Actions

– I expanded my inventory by putting up for sale every single piece of diagnostic software from every manufacturer in my online store.

– I also went out to find a diagnostic hardware solution for every single vehicle and manufacturer. China was a fantastic source for vehicle cables, computers and other devices. I had hundreds of items I could import and resell.

– On every listing I created the highest quality photos and ensured my search tags, descriptions and every area fitted the algorithm the best way possible. This would get the most people in front of my listings, then once they are looking at my page, it would increase the conversion rate. I made people want to buy from me rather than anyone else.

– I also created training / installation videos for every single product sold. Most people buying these items were clueless (that’s why they were spending money buying them from me). So these videos helped them to install the things on their computer and help them to use it on their cars. Otherwise I’d be stuck answering questions for hours and hours and hours. I would sometimes get 50 emails a day that needed responding to before I made the training videos.

– Did deals with Chinese companies to import their goods and resell the items for huge profits.

– Gained contracts with a courier company to ship the goods at the right price. 

– Did deals with vehicle manufacturers and the marketplaces to get permission to sell certain software and hardware. This was a challenge. 

– Contacted every single local garage, servicing & repair workshop within 40 miles to sell them on my hardware and software. I wanted to try and get them to buy it all. Bundled up the software as a package so it seemed like a better deal and that they were saving money.

– Provided installation services for these garages. I would travel to their premises and install everything for them. Multi million pound companies were paying me hundreds and thousands for a few hours work to do this. And they were still saving money due to my negotiation skills.

– Saw an opportunity to offer a diagnostic service for people who wanted their car fixed using the tools I had lying around. So there was an additional source of revenue coming in.

Results

– Was able to sell literally 40 pieces of software every single day. Some pieces of the software would generate £40 each. On an average day I’d be bringing in around £600. This was nearly all profit. No real expenses were needed once the deals had been made initially to obtain the software. The entire day was nearly spent just sending out orders.

– The diagnostic hardware also sold really well. One cable would be purchased for £20 as an example and I would sell it for £250. I can’t remember exactly but the most popular item would sell about 25 units a week consistently. At £8 profit each. About £200.

– I had 50-100 different diagnostic items for sale. Their sales would vary depending on demand. It was a competitive market. Then when I started dominating sales, people would try to drop their price and then race to the bottom. People are stupid and willing to work for nothing. 

– One of my main competitors actually purchased one of my products, then reported me all over the place. They even then stole my personal details and ordered things on the internet. They hacked into my account and tried to ruin me because they were jealous I was stealing thousands a week from them. I rectified this situation promptly. 

– My adverts performed better than the competition looking at the sales history. My photos, videos and instructions were far better. Even though I was charging a higher price. I went for more profit, less busy work.

– People loved the training videos. But some couldn’t be bothered to do it themselves. So they paid me to do it for them. On average a computer installation job and providing training for them and their staff, would net probably £500 a day. I just thought of a random number for a few hours in the evening. I didn’t want to rip them off.

– The Chinese companies would ship out their goods to me at stupidly low prices. I made a deal whereby they would handle the paperwork. Thus making more profit for me. I built their trust.

– When the online sales were waiting for the orders to come in, I went out to see if I could skip the middleman of the marketplace and offer everything directly to the local garages instead. Most garages would already have the best of the best equipment. They had spent thousands for commercial quality computer equipment to service every vehicle. I found success with the smaller people. Those who would be considered a bit more dodgy. But they still had money. When I had a couple of references, I used them to gain more traction. People could see I knew what I was doing and then bought into me. Garages would buy everything from me at once. Say 20 different pieces of software. At £30 each. £600 all in.

– The diagnostic service was mixed. I was making far more money doing the sales than simply offering plugging a computer into someone’s car. When you take into account the expenses and the time for one customer, the £40 you make turns into nothing. What was good however is that I had repair facilities ongoing at the same time. My Father handled that side. So this £40 could easily turn into 3,4,5, £900.

But the volume wasn’t there. You would get a lot of messers when purely advertising a diagnostic service. It would need to be a more focused approach. But then that is encroaching on a full on repairs/servicing business. A different ball game, with competition.

Evaluation

Selling software and hardware was very easy to do. Using a bit of intelligence I was able to beat the main competitors out there. But I wanted bigger and better things. There were only so many garages to sell to. And if the marketplace decided to change their rules, or if they shut down. Or changed the algorithm. (Or if other sellers copied me and decided to cut their prices so they would get the majority of sales, but they would actually not be making any money.) Then the entire business would be doomed. It wouldn’t be worth doing.

I stopped selling the items simply because my focus changed to other more real world objectives. Where it would have higher potential. The profits would be much larger per hour of labour.

I would consider starting this up again as a side income and just pay someone a few pennies an hour to fulfil the orders. I just haven’t gotten around to it.

I learnt how to market items though. How to meet the needs of customers. If customers had a problem I learnt how to resolve them without upsetting them.

Although some people aren’t worth bothering with. You can only do so much. There is no point in refunding them, or going out of your way to make them happy, if they are just moaning or looking for reasons to get a discount. There are plenty of other customers out there to get sales from. No point in spending too much time worrying about one customer.

If a customer is unhappy, it’s not likely they will ever come back or refer you to other people. Unless the customer is going to spend hundreds of thousands of pounds and their happiness is going to change whether you get the money or not. Then it’s best to just move on.

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