Should Your Dealership Sell Parts Online?

To eCommerce or not to eCommerce—that is the question. More and more, customers are demanding the convenience of online shopping, and the market of selling auto parts online is growing by leaps and bounds. There’s no better time to jump into eCommerce than now.

The benefits of selling parts with eCommerce can give your dealership the boost it needs, but some dealers hesitate to jump on board. Here are some key considerations to think about when deciding if it’s your time to tackle the online world.

Improve Profits

The first benefit of selling parts online is fairly simple. If you’re still chewing on the question of whether or not to sell OEM parts online, ask yourself this: do you want to increase revenue?

If the answer is yes, listen to this: the average dealer with RevolutionParts generates $360,000 a year in online parts sales. And that’s just the average. The top 10% of our dealers earn about $168,000 per month for a total of $2.2 million a year. JUST in online parts sales.

Automotive eCommerce is the way to go, especially when it comes to selling auto parts. Statistics and automotive experts agree that the focus is shifting to online, and you don’t want to be late to the party.

Reach Customers

According to a study by Auto Care Association, 85% of customers are using the Internet to research auto replacement parts. Google, with its own research, can confirm a similar statistic: overall searches for parts and service has increased by 38% from 2013 to 2014. The size of the market is only expected to grow in the coming years.

Maybe that’s not too surprising, since plenty of businesses are finding a surprising level of success online. But even among other markets, the sales in the online automotive world are growing really fast.

Granted, not all of these people conducting seraches are actually making a purchase online, but a good portion of them are. These customers WANT to buy parts online. They want to buy, and they’re searching for exactly what they want. If your competitors are online but you aren’t, then you’re already a step behind.

Even for the people not purchasing, they’re still spending a lot of time researching online. If you’re the one to reach out and give them the information they need, it’s instant and easy brand promotion for your dealership.

Jump Ahead of the Curve

Even though the online parts market is growing so quickly, hardly any dealerships are selling OEM parts online—only about 20%. Most dealership GMs don’t place much attention or priority on their parts & service departments, so for the most part, eCommerce has been overlooked. For now.

A IBIS world/Frost & Sullivan study claimed that the overall auto parts market is growing at 7%, but parts eCommerce is more than double that at 18%. Frost & Sullivan goes on to predict that the market with DOUBLE between 2016 and 2020.

And remember what we said about how only 20% of dealers are selling parts online? Right now the market is ripe for the taking. Once more dealers catch on to the power of parts eCommerce, it’ll be more difficult to dominate the market. It’s better to start now and claim your share of the profits before your competition can get comfortable online.

What’s next?

Whether or not you choose to sell auto parts online depends on your current goals and resources. The profits you can reap from a booming parts website is jaw-dropping, but it does require a bit of time and energy. You might need to move around some resources before selling parts online is a good fit for your dealership.

Anyone can sell online—it’s not as difficult as some people think. But before you sign up with an eCommerce provider, it helps to prepare your dealership ahead of time. Answer a few basic questions about the business so you have a direction to aim for.

The real question should instead be: what’s the best way for my parts department to reach customers online?

First, think about your goals: do you want to grow sales aggressively?

  • If you sell nationally, it will reach a much larger audience, but it will also be much more competitive. After all, there are only so many spots (10) on the Google’s first page of searches. The majority of internet shoppers only look at the first page, so if your website doesn���t make it as 1 of 10, it’s less likely to be visited. When you set your sights nationally, you also have the opportunity to sell on channels like eBay and Amazon and really rack up the profits.
  • On the other hand, if you sell locally, the market is much less competitive. You are looking to capture customers in your local area searching for parts, and some of them could be your existing customers. They would certainly appreciate the new convenient ability to shop online.

FREE DOWNLOAD: 7 Ways to Grow your Parts Business Beyond your Local Area

Another thing to keep in mind is your resources.

  • How well could your existing staff handle an influx of orders? Once your online store takes off, you will be very busy with shipping and fulfillment. There are plenty of best practices and tricks you can use to ship more auto parts with less staff. Other than that, you can invest in shipping management software in order to smooth things along.
  • What is your budget? This will affect the type of eCommerce platform you can get, and any branding and customization you add to your website. eCommerce platforms charge in a variety of ways: a monthly flat rate, fees per transaction, or a percentage of your total sales. If you want to grow aggressively and nationally, then it makes sense for the platform you use to charge transaction fees to scale the web hosting resources and customer support as the demands of your online store grow.
  • What marketing resources do you have? If you want to compete nationally, then marketing will be critical to your success. Does your dealership have the time, money, and dedication needed to invest in marketing your website? If you don’t have any marketing resources then you should consider outsourcing marketing to an agency who can take care of advertising for you.
  • What kind of website design do you have in mind? Your eCommerce solution will probably set this up for you, but it helps to have an idea of what works best when it comes to website design. Clean, professional websites are a must. As the years go by, having a mobile-friendly site is equally important. The Economist reported that half of the adult population currently has a smartphone and 80% of the adult population will have smartphones by 2020.

Customer shopping behaviors have changed; more and more, they demand convenience and the ability to shop anywhere at anytime. A lot of dealerships are scared to make a change, but ignoring the trends will only hurt in the long run. Luckily, a lot of training resources are out there and choosing a reliable eCommerce solution provider will help you out every step of the way.

Has your selling strategy changed with the times or will you be left in the dust?

9 Reasons to Sell OE Parts Online - fact sheet download

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