Getting Started – Deciding Which Auto Parts and Accessories to Sell Online
Choosing which auto parts and accessories to sell online is about evaluating:
- What parts you have access to
- What the market pricing is for the parts you have access to, and how that compares to your wholesale pricing
- Most importantly, the market niche you want to attack
Here’s a quick guide to choosing which parts to sell online from the perspective of an auto parts marketing company.
OEM Replacement Parts
If you’re selling OE replacement parts, you’re probably a dealership parts manager and/or someone who has a very good connection with a dealership parts manager. You have access to OEM parts direct from the manufacturer, and really the only questions before you are:
- How much are your competitors offering their parts for relative to cost?
- Do you want to invest in selling OEM parts online when the margins are so small?
In most cases (but not all), OEM parts are sold for cost plus 15-20%. Luxury OEM parts are a bit different (some sell for 20-30% over cost), but the market as a whole is riding at about a 15% margin. Most dealership parts managers are accustomed to selling parts to consumers at full MSRP or 10% over MSRP, so online pricing is often a big “leap” that parts managers have to make.
However, once a parts manager gets past the aggressive pricing, they have very little difficulty finding a “niche” for their site. If they sell a specific brand of replacement parts – eg. Ford, Toyota, Jaguar, etc. – that’s the niche. It’s fairly straightforward to focus on a specific brand’s enthusiasts, focus advertising on specific models, etc.
Basically, if you’re selling OE parts, the decision about ‘what to sell’ is easy. Sell every OE part you can get your hands on. Just make sure you’re comfortable with a tight profit margin.
After-market Parts and Accessories
If you’re thinking about selling aftermarket parts and accessories online, the process of deciding what to sell is much more complex:
- There are dozens of after-market parts distributors/suppliers you can work with, each with their own catalog of products. Most retailers work with more than one distributor to gain access to a large range of parts and brands. Still, the distributors and suppliers you work with will determine what you can sell.
- Many after-market part and accessory brands have strict MAP (minimum allowed price) policies that effectively set pricing and margins, but there are some brands that allow each retailer to set their own mark-up. MAP makes it both easier and harder for smaller retailers to be competitive (see the blog post “Is MAP Good or Bad for Parts Ecommerce Websites?“), so you’ll want to consider the pros and cons of selling parts that have a MAP policy.
- The options for choosing a niche in the after-market part and accessory industry are truly mind-boggling. You can focus on selling performance parts, or narrow that performance import parts, or narrow that to Honda performance parts, or narrow even further to just Honda Civic performance parts. Just remember: If your focus is too narrow, your potential for growth is limited. If your focus is too wide, you’ll find it hard to compete with bigger retailers (see Choosing the Right Parts Marketing Niche for more info).
In our experience, choosing a niche is the most important aspect of deciding which parts to sell. Choosing distributors is important, trying to buy parts directly with brands can help you secure better pricing (sometimes), but these are details that come after you decide who your customers are. Once you know your niche, you can start developing relationships with suppliers, selling parts, and making money.
So, basically, deciding which parts to sell online is all about finding a niche…easy, right? 🙂
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