An Interview With Parts Industry Insider, Jim Sinclair
This is the second post in Spork Marketing’s interview series, offering our readers even more insights to the business of auto parts ecommerce.
Today, we’re speaking with Jim Sinclair, founder of Channel Spyder. Jim started as a small retailer looking to compete on eBay and Amazon. His business model was based on high volume channel sales using a select group of drop ship suppliers. To be competitive in channel sales, his business had to keep overhead low and maintain the flexibility to drop margins as the market dictated. This was the beginning of Channel Spyder – a simple to use, turnkey software solution.
Can you describe your product/service as if I knew nothing about it or the market?
Channel Spyder allows marketplace (eBay and Amazon) sellers, using multiple drop ship fulfillment suppliers, to easily manage and scale their businesses. Using our tool, a seller can update and combine inventory from all available suppliers on day one. When orders arrive, Channel Spyder handles the price/stock checks with all available warehouses, and automatically vends orders based on that seller’s selected order vending rules. Orders can be routed by brand, SKU, or to the lowest cost supplier. As the orders ship, tracking is posted back to the marketplace and shipping costs are captured by Channel Spyder for real time accounting, reporting, and auditing. We know of no other system on the market that provides this type of real time detailed reporting in a drop ship fulfillment environment.
What’s your standard ‘elevator pitch’ for your company?
Channel Spyder fills a unique niche for drop sellers on Amazon and eBay Motors. Channel Spyder allows these marketplace sellers to easily manage and scale their businesses, using a multiple drop ship fulfillment suppliers and maximizing profitability. If you sell (or want to sell) auto parts on eBay or Amazon, there is no other tool that does everything Channel Spyder does.
Who would you list as your closest competitors?
For sellers who don’t want to spend their time finding product data and building listings, Channel Spyder’s tools for automation and reporting, combined with providing sellers the lowest service cost in the market, makes them unique among a short list of “competitors.” Currently, Channel Advisor is the biggest player in the market, but their service level for sales of automotive hard parts is lacking a vital connection to the two biggest catalog providers in the business. Channel Spyder is an approved vendor for WHI/Nexpart (an eBay company) as well as Epicor/Listing Expert.
There are many companies in the market that connect to the sales channels. Ship Station is one of the more popular, affordable, and they provide a great service. Channel Spyder’s key differentiator is our connection to drop ship suppliers. Ship Station and other competitors just don’t have it. Nexpart B2C would be the closest comparison to Channel Spyder; however, Channel Spyder offers a more robust list of features and tools for sellers. In addition, Nexpart B2C “brokers” parts from their connected drop ship suppliers. Channel Spyder believes this “middle man” approach increases part cost to sellers in an already competitive market.
Can you tell us briefly about your parts industry experience?
I started selling parts in the marketplaces in 2010 and quickly realized I needed technology if I wanted to scale. Downward pressure on profit margins meant I had to process more orders with fewer staff if I wanted to make any money. I looked all over the market, and found many satisfactory tools that would’ve worked if I was shipping my own products. Nothing provided the connection I needed to multiple drop ship suppliers. Nothing offered me the real time “all in” reporting I wanted to manage my business. Nothing was affordable for me as I was growing.
So, I built my own tool. The building took longer than I wanted, but when it was completed it did everything I needed. And, it allowed me to manage my marketplace drop ship auto parts business unlike anything else could. After five years of developing and adding features that I wanted as a seller, I decided to hire a development team, rework the program and make it available to the market. In September of 2015, the new and improved program was released to the market as Channel Spyder. I work every day with my development team to continually add features and tools that make life easier for sellers.
What is your favorite part about your job?
I love working with sellers to help them improve efficiency, list more parts, grow their business, and increase profit margins. We work on pricing, best practices to reduce labor costs, and managing seller ratings in the marketplaces. To hear about Channel Spyder sellers now actually enjoying the hours per week that they used to spend updating inventory and running reports brings me a lot of satisfaction. One of my favorite moments was when a new seller used Channel Spyder for a week and said to me: “Jim, this is the first Monday night for as long as I can remember, that I got to spend with my family instead of working all the weekend orders.” Almost immediately, I helped that business owner re-capture 4 hours of his life, and now he’ll get that 4 hours every week.
Are there any common misconceptions that people have about the products or services you offer?
Channel Spyder is not a sales or marketing tool. It is a business automation tool. It saves time, labor costs, and allows sellers to focus “on” their business rather than getting caught up working “in” their business. Channel Spyder removes things from the list of repetitive and tedious tasks, allowing sellers to focus more time on sales and marketing.
When you’re talking to potential customers, what are the 3 most important things you want them to know?
The “big three” would be:
- We specialize in marketplace sales of auto parts for sellers who ship from (or want to ship from) drop ship warehouse sellers. For sellers who want to also ship their own in-house parts, we do offer a pre-built system for selling your own in-house parts.
- Sellers can set up accounts with and connect to any of the suppliers from our list of available suppliers, right “out of the box”. We are constantly adding new suppliers and making them available to our sellers with no additional charge.
- Channel Spyder will help sellers reduce (by as much as 90%) the time spent on inventory updates, order processing, identifying the losing SKUs, calculating profit & loss, and auditing supplier invoices.
Where do you see the market for your product/service moving over the next 5 years?
E-tail (online) sales of auto parts is currently around $8B (7%) of the overall ($103B) automotive parts sales. This is split almost 50% from DIY purchases and DIFM (mechanics) purchases. Mobile phone sales account for half or more of this business and is growing rapidly. Amazon recently announced they plan to sell $20B in parts by 2020. Current data trends show DIFM sales growing rapidly, and overall sales of auto parts is expected to hit 20% by 2025. I think this is a conservative estimate. The big box retail stores can’t compete with the low margins in our market. The auto parts business as a whole has been fighting technology for the last 20 years. In many ways, they are still living in an old world. Over the last 10 years, more and more suppliers and distributors are noticing the opportunity, and getting in the direct to consumer e-tail sales. We are near a tipping point.
If you’re a seller or considering becoming a seller on Amazon and eBay Motors and plan to use multiple drop ship suppliers, Channel Spyder may be your best solution to improve efficiency, list more parts, grow your business, and increase profit margins.