The online parts market is booming, and there has never been a better time for dealers to sell their auto parts online. Over the next two years, the online parts market is expected to reach up to $22 billion, presenting an opportunity for dealers to reach new markets and sell to buyers across the nation. Some automotive manufacturers assist their dealerships through OEM incentives when they sell parts in volume to support their efforts.
For parts departments wanting to sell more parts and increase revenue, digital retailing is the best way to hit these large volumes. For OEMs wanting their dealers to sell more parts, creating incentives it’s a great motivator. Incentives also often let the dealer remain more competitive.
The rise in online shopping significantly impacts the auto industry, especially in the automotive parts space. Shoppers have made it clear that they want to make their purchases online, and if dealers want to keep up with demand, they will have to move to an online model. When selling online, staying competitive is everything, and providing dealers with incentives allows them to better compete against aftermarket parts.
Why Offer Incentives?
Selling parts online is a great way for a dealership to raise revenue, expand its reach nationally, and improve brand loyalty. With the booming online parts market, this seems like an obvious solution that every parts department should be taking part in.
So, why aren’t they?
Selling online comes with many challenges and perceived risks. RevolutionParts recently surveyed over 100 parts managers across the United States. Overall, we found that dealers agree that selling parts online is an important strategy for the future growth of their parts department. However, only 41% of those respondents said they had tried selling online. Those who were not selling online noted that these were their biggest challenges:
- Too expensive
- Lack of support
- Not enough staffing
- Not knowing where to start
Although eCommerce has become a common practice for businesses over the past two decades, for many parts departments, eCommerce is still a relatively new idea and can seem like a daunting task. However, selling online doesn’t need to be difficult and can be done without increasing staff. Most parts departments don’t need to increase staffing until they are selling over $30k online a month, on average.
With the proper support and incentives from their OEM, dealers are more likely to see selling parts online as a smaller risk and a strategy worth adopting. It encourages dealers to invest in programs that can benefit the dealership and their OEM.
There are many types of incentives manufacturers can provide to dealers to encourage them to modernize their parts departments and move to an online platform. These can include rebates, digital marketing promotional funds, and financial support for eCommerce parts programs.
A Breakdown of Effective Incentives
Rebates and Additional Incentives
Parts departments work best when they have clear goals to hit. Providing additional incentives and rebates to your parts managers for hitting certain sales targets can help reward them for selling parts in high volumes.
When the manufacturer provides these incentives for their dealers, the dealer can pass those savings along to the customer. This can help sell more inventory, stay competitive, and draw more customers to the parts department.
These incentives can also trickle down and positively impact the customer, who is now more likely to purchase an OEM product directly from a dealer than an aftermarket retailer. Additionally, that customer now associates the brand with a positive buying experience. This makes them more likely to have higher trust in the brand and the quality of the product.
The most successful online sellers are the ones that advertise. Unfortunately, for many parts departments, this isn’t the main priority. A survey of over 100 parts departments around the U.S. shows that 15% admitted that they don’t use any type of marketing to sell their parts. This leaves OEMs with an opportunity to help support parts departments through promotional incentive programs to incentivize parts marketing. Dealers taking advantage of RevolutionParts marketing services see an average of $8.75 return for every ad dollar spent, showing the impact investing in advertising can have on parts revenue.
Alternatively, manufacturers can use program promotional funds to financially support dealers as they get set up online. This can be done by either paying implementation fees or adopting a portion of their monthly costs. This eliminates the perceived roadblock of selling online as being costly. Although some manufacturers hesitate to offer this type of Co-Op or promotional funds for eCommerce, it has been proven to be the most effective at incentivizing more dealers to adopt eCommerce solutions. One manufacturer recently found success in getting 75% of dealers to adopt an eCommerce solution by providing partial funding if dealers committed to a year-long contract. One key benefit is that dealers are still invested in these programs when they also share in the program’s cost, which improves long-term engagement.
Support Through a Custom eCommerce Platform
Aside from these incentives, the best way for manufacturers to support dealers is to offer them an eCommerce platform that is easy to use and has the backing of their OEM.
RevolutionParts partners with North American automotive manufacturers to help get their parts departments online to sell parts and accessories in high volume. We have worked with some of the top manufacturers to provide parts eCommerce solutions, including dealer web stores and official national eStores.
To learn more about how RevolutionParts can help you support the parts departments in your dealerships to get your OEM parts into the vehicles of more customers, contact us to schedule a free consultation.