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.