A lot of GMs simply don’t spend enough time with the parts department to understand how everything works. With so much focus on vehicle sales, the parts and service department ends up taking a backseat to dealership operations.
It ends up hurting the dealership as a whole since these departments can’t operate as efficiently as they could if more time or effort was spent on them. Fixed operations can help cover dealership costs, making the process of selling cars easier. It’s all connected.
It’s time to face the facts: parts are valuable for sales and profit. We’re debunking some common myths today.
Myth #1: The parts department can’t be profitable.
Vehicle sales at the dealership bring in a great deal of profit. As a result, GMs like to focus on vehicle sales and ignore everything else. However, that doesn’t mean the parts department can’t add to the dealership sales, too.
Online parts sales can be a brand new profit center for the dealership. Top performing dealers on the RevolutionParts platform are making millions in parts sales each year. These top performing dealers aren’t reaching numbers like that through chance. Instead of a strict focus on vehicle sales, the GMs are communicating with Fixed Ops and giving the parts department the attention it needs to be successful.
Myth #2: If you build a website, people will come.
The internet is large enough that it’s rare for a customer to stumble across your parts website by accident. Often GMs will pay to have the site set up, only to be left disappointed by the lack of sales and decide that it was a bad idea to sell auto parts online.
However, with some work, your website can be profitable with a marketing budget. As long as there’s some way to spread the word about your parts site and make it easier for customers to find, sales are likely to improve.
If you don’t want to handle marketing yourself, look into hiring a marketing agency.
Myth #3: The everyday customer doesn’t care about the parts department.
The parts department isn’t always customer-facing. It’s not constantly interacting with the public like the sales team does. In fact, since the parts department’s best customer is the service department, GMs tend to think it’s okay to ignore parts as long as service is running efficiently.
But when a customer purchases their car from the dealership, don’t you want to maintain their loyalty? Ideally, that customer will rely on your dealership’s parts and service departments for vehicle maintenance.
If a customer’s car needs maintenance but the parts department doesn’t have the right parts on hand, you might end up with a frustrated customer. Likewise, if the parts department takes too long to find a part or ends up bringing the wrong part entirely, you might lose that customer’s business for good. It’s important for GMs to keep the parts counter well-staffed, trained, and stocked with in-demand parts.
Myth #4: Parts can be sold online at retail price.
Without much experience online, management sometimes believes that selling online is the same as selling over the parts counter, including the best prices to sell at.
If you price the auto parts on your parts website at retail prices, you won’t make many sales—if any. Online, you’re competing with places like Amazon and eBay. You’re competing with wholesale pricing. Even though you don’t have to set prices as low as Amazon’s, you should be conscious of the difference and try to price competitively.
Instead of “list pricing,” think along the lines of “cost-plus pricing”. Even a few percentages of difference in the cost + % pricing strategy can have a major impact on your sales.
Myth #5: Online customers are a lower priority.
If a customer walked up to the parts counter and had to wait for several hours before being helped, how do you think they’d rate their customer service experience?
Upper management tends to consider online customers a lower priority. If it’s a busy day at the parts department, they’ll insist that you focus on the in-store customers and wait a few days on the online portion. They might even restrict handling online orders to one or two days a week, instead of making it a daily task.
Your online storefront should be treated like an in-store storefront when it comes to customer service.
However, there is a bit more flexibility when selling online. You don’t need to fulfill orders within 20 minutes of receiving them. You don’t need to constantly hit “refresh” on the browser in case someone stopped by. Just make periodically checking your orders part of your daily schedule! Ideally, you can check the online situation at least twice: once in the morning, and once at night.
If you don’t have the manpower to give ALL your customers the attention they deserve (both online and offline), then it’s time to hire more staff.
There’s a lot that goes on in the parts department, both in-store and online. Both customer groups are important to build relationships with. Starting your online parts selling journey with a platform like RevolutionParts can put you on the path to success.