Diesel Laptops: From Selling on eBay to Making $20M/Year

$2,000,000
revenue/mo
1
Founders
90
Employees
product
Diesel Laptops
from Gilbert, SC
started May 2015
$2,000,000
revenue/mo
1
Founders
90
Employees
631K
alexa rank
shipping
accounting
crm
other

Hello! Who are you and what business did you start?

My name is Tyler Robertson, and I’m the founder and CEO of Diesel Laptops.

We are a B2B company, and our business is selling diesel diagnostic hardware, software, and services to the trucking and off-highway diesel industry market.

The business originally was started with the idea of making it easier for customers to purchase the products and services they needed. As time went on, I started to create our own software and services that would support the customers. Since I quit my “regular” job to launch this company, we’ve successfully doubled revenue each year.

In three short years, it went from me in my dining room table and garage to a 21,000 square foot facility with over 90 employees.

diesel-laptops-from-selling-on-ebay-to-making-20m-year

What's your backstory and how did you come up with the idea?

I had worked at commercial truck dealerships for my entire career.

Through those years, I’ve seen commercial trucks become more and more complex, and more difficult to diagnose. Customers kept asking me how they can perform their own diagnostics, or get their own repair information. All of this was confusing, difficult, and expensive for a customer to figure out on their own.

My employer asked me to make a decision -- Quit my side business and take a nice raise and bonus, or resign.

One day back in 2012, I found a person in Canada that made this great little software program. While it was focused on commercial trucks, it would also work with automotive, farm tractors, and some off highway equipment as well. It would read and clear codes, view live data, print some great reports, and basically allow the user to do basic troubleshooting on electronic system on these vehicles.

diesel-laptops-from-selling-on-ebay-to-making-20m-year First kit sold on eBay in 2012 (link below)

I emailed this person and asked if I could put a kit together, which included a laptop, his software, and then the hardware to interface with the equipment. He agreed, and I put one on eBay to see if it would sell. A couple days later it did, and then I just started adding more content to it and raising the price. I ended up doing this for about 3 years while I was working full-time for someone else. While that original kit has been upgraded many times, we still continue to sell it on eBay.

In early 2015, my then current employer asked me to make a decision -- Quit my side business and take a nice raise and bonus, or resign. At the time, my wife was a stay at home mom, and I had a 1-year old and 3-year old. I was making a great salary, and I had been with this company for almost 10 years. I was going to quit the side business, but my wife really urged me to give it a shot. We had been pretty frugal with our money and had saved a bunch up, so I took her advice and resigned.

Here we are, around 3.5 years later and growing fast. We just landed #422 on the Top 5000 fastest growing companies in America, and quickly have moved from my garage and dining room table to a 21,000 square foot building. We have almost 100 employees now, and are focused on expanding as quickly as possible.

Describe the process of designing, prototyping, and manufacturing the product.

At first, my company was simply just bundling various products to create an easier, more simple way for customers to buy what they needed. To connect to a commercial truck to perform diagnostics, you need three things -- Diagnostic software, laptop, and a adapter that interfaces between the truck and the laptop. As you can imagine, most of our customer base (diesel technicians and repair shop owners) aren’t the most technical savvy group. They didn’t understand what was needed to make everything work, and they would have to purchase from multiple vendors to put together what they needed.

My solution was taking different vendors products, bundling them into one kit, and making sure it was “ready to go” out of the box when the customer received it. As simple as that sounds, no one else was doing, and no one else does this today. If you buy a kit from another vendor, you are doing all of your own installation, licensing, configuring, and testing. While a lot of people are tech savvy, our customer base typically is not, and this is another advantage we have when selling diagnostic kits.

However, what I quickly found out was that customers needed two more things -- Technical support and repair information. We were selling a great tool, and it would give diagnostic codes and live data, but end users were still confused on how to repair the truck.

In the early days, I would help each customer via a phone call. It quickly moved from “I can’t connect to this vehicle” to “How do I fix this vehicle?” questions. I decided to make a software program called DTC Solutions. This program is essentially a quick reference for every possible diagnostic code that exists.

We have since expanded pass fault codes to include things such as wiring diagrams, specification values, remove and replace instructions, labor time guides, parts cross reference, and more.

diesel-laptops-from-selling-on-ebay-to-making-20m-year Full software product lineup.

The other was technical support. We are selling diagnostic software and hardware to diesel technicians and shop owners, many of which aren’t technology savvy. We have both IT professionals and ex-diesel technicians on staff. This allows us to help customers with all issues, from computer related to helping diagnose a truck properly.

In our case, the process for new products, services, and ideas all come from the customer. We try very hard to listen to what their complaints are, and then work on solutions around that. Almost every software product and service we have launched I can directly tie back to conversations I had with customers about pain points in their day-to-day work environment.

Describe the process of launching your products.

I started this company with just a couple thousand dollars, but I have been ultra-conservative in taking money out of the company.

Our company has grown so fast, that we’ve needed every dollar to continue to expand operations, accounts receivables, inventory, acquisitions, and pay taxes. Basically, my mantra around here is to keep reinvesting in the business until we are broke. It is a bit frustrating to not see that huge bank account balance, but I feel the long-term play here to build something great and sustainable for decades to come.

We are constantly launching new products and services. This year alone we’ve launched 10 new “major” products, services, or platforms for our customers. An example is that we are about to sell and market marine diagnostic tools on a whole new level. We previously had one listing on our website, and we’ve sold over $500,000 from that one product, and we knew nothing about marine diagnostics.

This is our step-by-step playbook in how we decided to branch out to this industry. First, we hired someone to become our marine diagnostic tool expert. We purchased one of every marine diagnostic tool that existed, and sent him out to local boat repair shops to get permission to connect to engines and start learning. He is about 4 months into it now, and he created a great network of people assisting us. He does weekly reports, pictures, and videos that we send to our sales team and our technical support team.

Secondly, we will want to market marine diagnostic tools. Our company name of “Diesel Laptops” doesn’t make sense in the marine world, so we purchased MarineDiagnosticTools.com, and had our web designer start creating a new website. This means we had to come up with a color scheme, logo, product photos & descriptions, blog posts, videos, and everything else needed. It’s a large project, so this it taking a couple months to get it to where we want it.

diesel-laptops-from-selling-on-ebay-to-making-20m-year The front of a Marine Diagnostic Tools Post Card showing our brand colors, fonts, logo and a complete kit.

So now is where the marketing comes in. We’ve learned about the product and we created a great website, but now we need to get the word out. The first thing we did was outsource some data entry people from UpWork. We literally had them go do Google searches by US State to find and document every possible marine repair facility in the country.

They documented the company name, physical address, phone number, and email address if they could find one. We now have a directory of over 30,000 marine repair facilities in the USA. We will use this data to send postcards, mailers, and have our sales people make phone calls so they will be introduced to our solutions.

In conjunction with the launch, we will be doing paid search across Google, Bing/Yahoo, FaceBook, and YouTube. In our case, customers don’t know or realize that there are diagnostic tool options for the marine industry, so it is all about making that impression to the customer that there are solutions to their problems.

Since launch, what has worked to attract and retain customers?

Diesel Laptops started as an online only company, and we still have a strong presence online.

Backlinks

I’ve devoted a lot of time to obtaining good, high quality backlinks from companies in our space. This includes vendors, customers, business organizations, directory services, and much more.

When starting out, my goal was to get one additional high quality backlink each week. Today, if you do Internet search for terms such as “diesel diagnostic tool” or “heavy truck scanner” you will see that our website pops up organically on page 1, even though our website looks horrible.

Obtaining relevant backlinks should be a priority for every business owner that wants an online presence. Don’t worry if they are “do-follow” or “no follow”, you shouldn’t be building backlinks for just SEO, you should also be building them to get people to your page!

My advice on backlinks would be to get your Google My Business first, then open up on whatever social media platform fits your demographic. In our case, LinkedIn, Facebook, and YouTube do well for us. Instagram, Twitter, Reddit, and others not so much. Everytime we launch a new product, service, or new software version we always send a press release to every relevant media outlet in our industry and also local. Sometimes we get picked up, sometimes we don’t, but we always send it. We also signed up with our local Chamber of Commerce (backlink!), signed up for free on Manta.com, and various other business websites.

diesel-laptops-from-selling-on-ebay-to-making-20m-year A link back from one of our customers.

From there, we went to every one of our vendors that we purchase from and asked for a link back to our website. I also became active on various forums and Facebook groups, and I always try to offer great advice without promoting my own company. The only time I typically place links back to our websites is if someone is specifically looking for a tool or software program that we sell and support. I’ve also done a couple “blog swaps” with other companies in our industry, when it makes good business sense.

Currently we have around 300 high quality backlinks, and roughly 50% of them are industry specific to us. The other 50% is a combination of media organizations, social media, and everything else.

Paid search

diesel-laptops-from-selling-on-ebay-to-making-20m-year Sample of our paid Google Search results

We also do a lot of paid search advertising. We do this across Google Shopping, Google AdWords, Bing/Yahoo, YouTube, and FaceBook. We will easily spend over $1 million this year on paid search alone.

Currently our customer acquisition rate is around $50 for a high quality lead looking to purchase a higher end diagnostic tool (Priced $6,000 and higher).

eBay and Amazon

Diesel Laptops was started on eBay, and used to be 100% of our sales around 4 years ago. Today we have more than doubled our eBay sales, but it is now less than 10% of our total revenue.

We are also active on Amazon, which accounts for around 15% of our total sales. We are a bit picky on which items we place on which platforms. In our space, we are almost all business to business and selling tools that are $2,000 and more.

Customers usually have questions regarding warranty, functionality, financing, return policy, customer service, and a ton more. While customers mainly find us online, they usually end up purchasing from us through a phone call.

Email and social media

We also are active as possible with doing weekly email campaigns (40k subscribers), FaceBook (17k+ likes), & YouTube (Over 4 million views).

On LinkedIn, business pages don’t do very well but I’m pretty active on their personally trying to grow my network and posting content a couple times per week. If you want to connect with me and keep following our story, connect with me on LinkedIn!

We do post a little on Instagram and Twitter, but we don’t feel our customer base is very strong on those platforms.

Offline

We are also very involved in the industry offline. We will do more than 30 trade shows this year, all related to the truck or diesel engine industry. These include national shows, regional, and even local ones.

The expense of these add up pretty quickly, and it usually costs us around $10,000 to do a single show. That involves booth set up, employee time, registration costs, travel costs, and everything else. We’ve done a little bit of print advertising, and we just didn’t see the ROI there.

Part of our ability to retain customers is that we offer support and updates. So on our typical packages, customers will be receive updates & support for that first year. If they want to continue to receive those things, they need to purchase a support package. This gives us a revenue stream into the future, and also keeps the customer supported.

How are you doing today and what does the future look like?

Today we continue to grow very fast. In July we passed our total sales from 2017, and we are constantly pushing hard to launch our new products, services, and platforms.

I’ve been fortunate to be profitable through this process, but my role in the company has really changed a lot. It is difficult to “let go” of responsibilities and trust employees around me, but I have some really awesome, energetic employees that are helping us run at lightning speed. I’m now more focused on the longer-term goals and working on those projects.

Long-term, I really want to change the truck repair industry. Today, it operates like it did 30 years ago. A technician diagnoses a truck, and then he needs a part to fix it. He has to call around to local suppliers or pass that job to someone else at the store. They may have to call several different stores, and probably try to cross-reference it to other manufacturers.

I think we have a solution that will enable that technician to find the exact part he needs without making a single phone call, along with ordering it right from his phone or laptop. This solution would essentially save technicians and repair shops hours of wasted labor each day, and in that environment time is literally money.

Through starting the business, have you learned anything particularly helpful or advantageous?

I’ve probably made more bad decisions then good ones, but I always knew the risks.

One of them was putting 100% of my focus on sales and marketing. As we grew, I knew we needed to button up our digital security. I had no firewall, no antivirus, no company password policies, and essentially no controls setup. Well, someone ended up hacking our Amazon Seller account and diverting a $40,000 Amazon deposit to their bank account.

The other thing is that the saying “cash is king” is 100% correct. Keep an eye on your inventory levels, receivables, and every other area that you spend. Although we are growing fast and profitable, literally every penny goes right back into the company to keep funding it.

The minute you start making some good money, a lot of people tend to pull it out. Then you find out your growing company doesn’t have enough money to pay employees, taxes, or more inventory. Our cash position is a daily topic of conversation, and we focus heavily on managing that.

Since I’ve started this company, we’ve had tremendous growth. When I “quit” my full time job to focus on growing Diesel Laptops, I was already doing around $1.2 million in annual sales. In my first full year of business in 2015 we did $3.5 million in sales. In 2016 this grew to almost $8 million, and in 2017 we got up to $16 million in sales. We aren’t going to quite double in sales this year for 2018, but we will be very close. The challenge now is that it is getting harder to move that sales number each month, but we have plenty of new products and services in the pipeline to keep pushing it.

The majority of our sales still take place over the phone, but they often start online. The less expensive, “commodity” items in our industry are used as sales leads. Every week we have a customer that starts with a $50 cable purchase, but ends up purchasing a $8,000 diagnostic tool once they realize what we offer. In our business, if we can save our clients time, money, or both it is an easy decision on the customers part to purchase.

What platform/tools do you use for your business?

We use a ton of SaaS tools, as we have employees spread throughout the USA.

For collaboration, we use Slack, Trello, Zapier, OneDrive, and Dropbox. We are still using QuickBooks Online for our accounting, and it is a major pain point. We will be switching here in early 2019 to a new ERP.

We ended up building our own web-based platform for managing our customer's information such as which software license they purchased, and when it expires. We also use it to track all of our laptops that we refurbish for our customers.

Another great service is 71lbs. If you do any shipping with FedEx or UPS, look them up. They save me around $12,000 a year and it requires no extra work. For our CRM we use PipeDrive, but we will hopefully be switching to SalesForce in 2019.

What have been the most influential books, podcasts, or other resources?

I’ve read a ton of business books over the years, along with listening to a bunch of podcasts.

More than anything, I felt like the 15 years of my life previous this adventure was a paid internship. I made millions for other people, but I was constantly learning and trying new things through the process. Without that experience, I don’t know if I could do what I’ve already accomplished.

The other big influence was my father and family business. Conversations at our dinner table growing up were about business, so a lot of that followed me through life. I still will have frequent conversations with him when I have big decisions to make to hear what he thinks about it.

Advice for other entrepreneurs who want to get started or are just starting out?

I’ve seen some things through the years. The first one is that your product or service doesn’t need to be perfect. I’ve seen it more then once where someone is constantly re-designing and re-creating, just to get it to the point of “perfection”. I’m more of the mindset to get it to a working state, and start putting it out there and seeing what the public has to say about it.

Another one that I get asked about all the time is finding investors or funding sources. In most cases, you don’t need them and it is going to be a difficult road to finding one. If you have a product or service ready, just get it out there and start hustling to get customers. If you need money to create your product, figure out a way to get around that. Break it down into smaller chunks, and start bootstrapping it. Save every nickel you make and keep re-investing in it.

Are you looking to hire for certain positions right now?

diesel-laptops-from-selling-on-ebay-to-making-20m-year Camesha working in production at Diesel Laptops

We’ve hired a new employee every 3 days or so in 2018, and we always have a ton of openings.

While we do use Indeed and ZipRecruiter, we put all of our open job positions on http://jobs.diesellaptops.com. We have employees both locally and spread across the USA, so we always on the hunt for great talent!

Where can we go to learn more?

Our website, as horrible as it is, is located at www.DieselLaptops.com. Otherwise, I love hanging out on LinkedIn, so connect with me there! If you want to follow our company, here are some links:

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Tyler Robertson,   Founder of Diesel Laptops

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