We’ve had a handful of parts staff, parts managers, general managers, and dealer principals ask us “Why should we sell parts online?” over the years, and we decided to put together this short list of reasons for dealers to sell OE replacement parts online.
1. It’s a great way to grow. For most parts departments, Internet part sales are the only clear path to revenue growth. This is because parts department growth is often “held hostage” by the growth of sales and service departments. If these departments don’t grow, the parts department is often stuck in a rut.
Selling parts online, however, is something a hard-charging parts manager can do to grow their department’s revenue without waiting for service to write more tickets or for sales to sell more cars.
2. Automakers love parts departments that grow volume. From bonuses and trips to “back-end” money, there are a lot of perks and profits available to parts managers who find a way to grow their departments year after year. Since online parts sales are expanding annually, all a parts department needs to do to grow volume is start selling online.
3. It’s a lot like the wholesale business you’re already doing. Selling parts online is a heck of a lot like wholesaling them. An online parts customer expects a cut rate price and fast delivery, just like a wholesale buyer. However, unlike wholesale, the department doesn’t need to put a driver and a truck on the road all day long. The department also doesn’t need to compensate reps, invest in loyalty programs for wholesale customers, fight with difficult wholesale customers who demand complex quotes, etc.
In many ways, selling parts online is easier than wholesale. All it requires is a website, a good fulfillment process (with someone in the department in charge of filling orders), and an investment in marketing.
4. It’s a great career move for the parts manager. It’s not a stretch to say that many dealer principals and/or general managers don’t fully understand the parts department. Many of view parts as a “black box,” where parts and customers go in one side and profits come out the other. Parts managers who manage to grow their department faster than the rest of the dealership – and who contribute to an unexpectedly large portion of the dealership’s revenue – are often moved up, compensated more, etc.
5. The future of the parts business is probably online. While there will always be a certain percentage of customers who refuse to buy online, there’s no arguing with the growth of ecommerce. Amazon.com went from a crazy dream in 1994 to a company that did $89 billion in revenue in 2014. Various projections have shown online auto parts sales becoming as much as 15% of the overall parts market by 2020, and who knows how big it will be by 2030.
But the point here is that the OE parts business is changing. Ecommerce is going to become a larger and larger component of that business.
Summing up, dealership parts managers who:
- have an eye towards the future and
- are interested in growing without depending on other departments
often embrace selling OE parts online.