How are parts departments dealing with their obsolete parts?

[Mustafa Mustafa]

Yes, my point exactly - 99% of dealers will just sign up with one of the parts website providers and expect instant success and profit.

That's far from the truth, as you know. It requires a significant time and financial investment, and even that doesn’t guarantee success.

There are 4,000 GM dealers across the country, all with the same parts catalog, all shipping nationwide, and all able to launch a parts website overnight. If a dealer thinks local SEO for their dealership website challenging, national eCommerce SEO is even tougher, as they’ll be competing against hundreds or thousands of other dealership parts websites selling identical part numbers.

I can't even imagine the churn rate these parts website providers must experience.

99% of dealers? Let's not make a broad generalization.

Before a PM can sell online, the DP or GM will need to sign off after identifying the proper business case for starting a parts/accessories e-store.

I've spent considerable time training hundreds of dealership management personnel to identify these business cases.

Some dealers will invest in a volume play and sell at discounts to get back-end money.

Some dealers will spend $100 month, zero ad spend, sell at MSRP and are happy with the several thousands of $ they make a month.

Some dealers will sell online because none of their nearest competitors are selling online and use that as a strategic opportunity to gain customers for aftersales and new car.

Some dealers will sell only apparel in one of the marketplaces because they identified a market gap.

One interesting fact, more than half of parts/accessories orders are placed online, but picked up in person. What does that tell you?

Customers do not want to wait at the retail counter or stay on hold just to know if a part is in stock or not. They want to buy and shop whenever they want wherever they want and still will prefer to go in person to pick it up from their local dealer. Whether it's the dealer they purchased the car from or the nearest one that has an online store.

eCommerce is here to stay and grow for parts, whether it be retail, B2B or marketplaces.

 

[Ryan Everson]

99% of dealers? Let's not make a broad generalization.

Before a PM can sell online, the DP or GM will need to sign off after identifying the proper business case for starting a parts/accessories e-store.

I've spent considerable time training hundreds of dealership management personnel to identify these business cases.

Some dealers will invest in a volume play and sell at discounts to get back-end money.

Some dealers will spend $100 month, zero ad spend, sell at MSRP and are happy with the several thousands of $ they make a month.

Some dealers will sell online because none of their nearest competitors are selling online and use that as a strategic opportunity to gain customers for aftersales and new car.

Some dealers will sell only apparel in one of the marketplaces because they identified a market gap.

One interesting fact, more than half of parts/accessories orders are placed online, but picked up in person. What does that tell you?

Customers do not want to wait at the retail counter or stay on hold just to know if a part is in stock or not. They want to buy and shop whenever they want wherever they want and still will prefer to go in person to pick it up from their local dealer. Whether it's the dealer they purchased the car from or the nearest one that has an online store.

eCommerce is here to stay and grow for parts, whether it be retail, B2B or marketplaces.

Do your dealers advertise the same prices for parts online as they charge in the service drive?

That's another important issue to keep in mind since online margins are razor-thin due to the nature of platforms like Google Shopping and Amazon.

If your online parts store shares the same branding as your dealership, it could lead to upset customers in the service drive asking for a "price match".

I'm not against e-commerce, I'm just against the unrealistic expectations that many parts website providers tend to pitch to dealers at Digital Dealer and similar events. The idea that you can spend $1,500 / month on a website, $2,000 on SEO, and $3,000 on ads and make a guaranteed profit usually ends up being only a fantasy.

E-commerce makes complete sense if it's part of an OEM initiative where they provide a branded subdomain for each dealer to refer customers to, which it sounds like might be the case with what you're working on. It also works well as an online portal where wholesale clients can log in and order parts without needing to call a parts guy.

 

[Ryan Everson]

Some dealers will spend $100 month, zero ad spend, sell at MSRP and are happy with the several thousands of $ they make a month.

If there's a parts website provider that offers an e-commerce website for $100 per month and can generate thousands of dollars in monthly sales at MSRP with $0 ad spend - disregard everything I've said and sign up immediately.

 

[Carsten]

I have been following along and I love ecommerce. Learned to code basically to do ecommerce sites.
But this is hard since you are you are fighting a battle against: rock auto, FCP, and amazon.

I guess it works for the people who use picking up parts as an excuse to save a few dollars on shipping. I would do it so I could window shop but when I go to the dealer it's for service that I think the dealer is better off doing than some mechanic or I have a warranty to use.

What parts sell the best on a dealer website?

 

[Tallcool1]

Valid arguments have been made that (depending upon the amount of obsolete parts) the best thing you can do is throw them in the dumpster.

 

[Ryan Everson]

Valid arguments have been made that (depending upon the amount of obsolete parts) the best thing you can do is throw them in the dumpster.

Agreed, otherwise you're often just throwing good money after bad.

And if you have so many obsolete parts that it’s painful to toss them, it likely points to a larger issue that needs to be addressed.

 

[Netionster]

Just a word of caution to any dealers considering making a significant investment to sell parts online...

With a few exceptions, the parts website providers are typically the only ones who end up making money when a dealership sells parts online.

Parts are a commodity, leading to a race to the bottom with the lowest price. Customers will just buy from the cheapest seller they find on Google Shopping, Amazon, eBay, etc.

As a result, margins are razor-thin, and you have to spend money on shopping ads to generate sales, further cutting into those margins. And don't even get me started on the amount of long-term SEO investment and commitment that would be required to forgo paid ads.

And then you have the hassle of dealing with fraudulent orders, credit card chargebacks, and more.
And then you will have to deal with fraudulent orders, credit card chargebacks and many more. For this, I advise you to use a reliable service linkpay for making transactions on the Internet.
You also need to pay someone to pack and ship the parts, manage customers with unrealistic delivery expectations (thanks Amazon Prime), and handle returns when customers order the wrong part or claim it’s defective.

Many manufacturers now offer parts buy-back programs, which help mitigate the issue of obsolete parts.

To be fair, there are some success stories such as Flow Chevrolet's GMPartsDirect.com, Suncoast Porsche's SuncoastParts.com, and a handful of others.

Dealers can also succeed if they are active in online forums dedicated to specific makes and models and build a strong reputation among members.

But case in point - Mustafa's parts website, which he was promoting last January has already been taken offline.

Dealing with fraudulent orders and credit card chargebacks can be incredibly challenging for any business. Not only does it lead to financial losses, but it can also impact cash flow and the overall reputation of your business. Implementing secure payment solutions and fraud prevention tools is crucial for reducing these risks.