A report by Reynolds & Reynolds estimates half of new-vehicle buyers plan to customize their purchases.
- 90 percent of new-car owners customize within 90 days of a vehicle purchase
- 6 million new-car owners accessorize in the first two years of ownership
Most of those purchases take place outside the dealership, says Reynolds & Reynolds.
The Missing Profit Opportunity, Increasing Accessory Penetration Rate
When it comes to automotive accessories, there is a missed opportunity for the dealership. Unlike maintenance parts, accessory sales have high profit margins. According to Automotive News, these margins routinely approach 50 percent.
The accessories market generates $40 billion a year. How does that break down per sale?
The average car owner spends between $300 and $800 to accessorize their rides, with truck owners spending an average of $1,500. There’s a lot of potential there for those currently selling, or interested, in the eCommerce world.
Bosak Motors reported accessorizing a fifth of their new vehicles – accounting for $20-25,000 in gross profit every month.
Even if the profit margins on replacement and maintenance parts don’t offer a lot of wiggle room, with the potential there for accessories to compensate, those who drive attention and focus to this area can see profits grow despite having to be competitive elsewhere.
With half of new car buyers planning to customize their purchases at some point and statistics that back up the claim (6 million new vehicles are accessorized within first two years of ownership), dealerships and online stores alike are smart to jump on the trend early and carve out a lane dedicated to accessory sales and promotion.
A Profit-Winning Strategy for Accessory Sales
Pushing more accessory sales doesn’t have to be complicated. Given the statistics, people are actively looking for products to customize their vehicles that will fit with their tastes and lifestyles. It’s just a matter of promoting these items so they’ll be seen by a large audience.
Today at the physical dealership, the conversation of accessories happens with F&I. Although, based on a study by Foresight Research, only half of new car buyers at the dealership remembered talking about accessories during the purchase process.
As far as the online sphere, promoting accessories can even be easier considering there doesn’t have to be a face-to-face conversation.
Some simple tips for selling accessories online is to offer discounts or specials for accessory purchases. For example, a dealership could offer free shipping with an accessory purchase of $100 or more, or a 10% off code for accessory orders over $200.
Another great way to promote this category is to send email marketing campaigns promoting items that may be on sale or offering a discount for completing an accessory order that may still be in a buyer’s cart.
Whatever way accessory sales are approached, the important thing to remember is the profit potential. Keeping that in mind will ensure that this market is not neglected in the future.
Interested in diving in online? We can help you here at Revolution Parts. Request a demo today!