Parts E-Commerce

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Parts E-Commerce

• The Dealers Guide

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Agenda
Parts E-Commerce Online Parts Trade

• Summary Actions
• System Integration
• Special Cases
• Challenges
• Whats Next?
• Wrap-Up

• Introduction
• Why Why Not
• Dealer-as-a-Buyer
• Dealer-as-a-Seller
• Dealer Parts Websites
• Wholesale Portals
• Retail Portals
• Mass Marketplaces
• Locators

No one right solution (unlike main dealer
websites) Some dealers need multiple
solutions Solutions depend on dealers franchises
and off-line parts business
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Introduction

• Why listen to me?
• Since 1985 Automaker/Dealer Parts Systems
• North America, Europe, Japan China
• 1st Electronic Parts Catalog (1986)
• 1st Parts E-Commerce Automaker Portal (1999)
• 1st Wholesale Parts Portal (2000)
• 1st web parts locator, order referral (2002
  -2009)
• No Horse in the Race
• Structured / Actionable

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Introduction Cont.

• Why Listen to Parts E-Commerce Presentation?
• Your Customers
• Your Competitors
• Your Costs
• Results
• Sell More Parts
• Lower Costs Related to Sales (processing,
  returns, )
• Lower Purchase Cost of Some Parts
• Without Adding Staff or Increasing Capital
  Invested
• Not Obvious gt 20 Suppliers 6 Types (with
  distinct benefits, costs, buyer segments) 50
  Solutions

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Introduction Cont.

• AM crushing OE Volumes Substantial

DST reports transaction volumes same order of
magnitude as IAP WHI
Approaching 1B/mo. gt10 annual growth
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Introduction Cont.

• Dealer-as-a-Buyer (DaaB) Overview
• D2D Idle Urgent
• AM
• Dealer-as-a-Seller (Daas) Overview
• B2B, B2C, D2D
• Portals, Dealer Websites, Locators, Mass
  Marketplaces
• Parts, Accessories, Tires, Merchandise

Buyer/Seller Chaos
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Introduction Cont.

• DaaS - Segmentation

• Mechanical Repair (All Fleet only)
• Collision Repair

Solution Clusters
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WHY! Parts Buyers Prefer E-Commerce

• Consumers Semi-Pro Buyers
• Natural, convenient and faster particularly for
  younger and digital customers
• Searching the web is what digital buyers do
• Price shopping
• 24 x 7 to research, search and order
• Web educating more DIYers to do more
• Economy financial pressure to DIY
• Wider range of OE (ex VPI, Performance) AM
  Parts

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WHY! Parts Buyers Prefer E-Commerce Cont.

• Mechanical Repair Professionals
• Already switched to parts e-commerce for AM parts
  due to discounts (most orders)
• 24 x 7 Never on hold
• Integration to Shops Systems
• Online Access to order info/status
  current/archived
• Collision Repair Professionals
• Same as for Mechanical Repair Plus
• Automakers Parts Program (discounted parts)
• Access to automaker technical info
• Future Compliance w/ Insurance Company programs

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WHY! Parts E-Commerce Dealer Benefits

• How Selling Via E-Commerce Benefits Dealers
• Some parts buyers require parts e-commerce and
  more are shifting to e-commerce
• More ordered (related parts, conquest/conversion)
• Faster easier to process digital than phone or
  fax orders (plus save the inbound toll-free
  charges)
• Potential for fewer returns (180 change)

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WHY NOT! Not Ready for Parts E-Commerce

• Costs
• E-Commerce is not free for sellers
• Pricing in a few cases tricky as old cell
  plans
• Returns can be higher (though recent industry
  experiences are the reverse)
• Culture
• Digital buyers expectations are higher and
  heading higher immediate accurate responses
• Digital Orientation required
• Customers
• Some customers not ready others inconsistent
• Failure is an option

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Dealer as a Buyer

• AM
• Advantages of selective purchases via e-commerce
• Discounts for purchasing via e-commerce
• Single source makes not covered by dealers
  franchises
• Speed and accuracy of ordering
• Availability and delivery timing
• Scenarios
• Parts for vehicles in dealer workshop
  (franchise/not)
• Used car prep (maintenance, repair and
  restoration)
• Good/Better/Best service parts
• Platforms WHI, IAP, DST
• OE Idle / Urgent

WORLDPAC NAPA CARQUEST AutoZone
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Dealer-as-a-Seller
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Dealer-as-a-Seller
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Dealer Parts Website

• Website dedicated to selling parts
• Cousin Larry Cant Build Catalogs Billing
• Parts Plus Accessories Merchandise
• gt 90 FedEx, UPS or USPS shipment
• B2C now, B2B extensions emerging
• Benefits
• Increased sales (most incremental for dealer)
• Low Returns (if done right)
• National International reach different market
• Easy Quick Set-up /Maintenance
• TradeMotion, Parts Website, RevolutionParts,
  SkyParts, Reynolds Reynolds, WHI, Others

• Issues
• Brand vs. New Brand
• Domain Name OE IP Dealer IP/Subdirectory

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Dealer Parts Website Cont.

• ROI
• A gtgt Z / (X Y)
• A Website Sales / Month
• Z Fees for Website / Month
• X Gross Margin on Retail Parts
• Y Sales that are Incremental
• Set SH to cover actual costs
• Charge restocking fee that covers returns
• Upsides
• Retained customers that might have left w/out
  website
• Productivity gains from streamlined order
  processing

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Wholesale Portals

• Segments IRF, Fleet, Collision Dealer (D2D)
• Wholesale Buyers
• Pricing specific to each wholesale account
• Buyer needs to know quickly if/when deliver parts
• Primarily Local Delivery or Pick-Up Dealer
  Invoice
• Potential for Incentive Programs
• Buyer system integration
• Benefits
• Customer satisfaction retention pre-existing
  trading partners
• Moresales (related parts, conversion) new
  customers
• Greater order processing productivity
• Mechanical OEC, WHI, DST, Infomedia, Lexcom
• Collision OEC, Infomedia WHI

• Issues
• Very different from Retail
• All-Makes vs Franchise
• Where is Effort

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Wholesale Portals Cont.

• ROI
• (Y X) gtgt Z
• Z Portal Fees / Month
• X Gross Margin on Wholesale Parts
• Y Sales that are Retained New/Incremental
• Upsides
• Productivity gains from streamlined order
  processing
• Lower parts returns
• Upfront Costs / Efforts

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Retail Portals

• After catalog search, Buyer picks (local) Dealer
• Parts, Accessories, Merchandise Special Parts
• Often an automaker program/solution
• Benefits
• Marketing muscle top 10 search results
• New sales (related parts, conversion) new
  customers
• Greater order processing productivity
• Risk Non-Participation in OE-sponsored Tool
• Ford (FordParts.com OEC) Honda (eStore)
  Chrysler (Mopar eStore Chrome Data), Nissan
  (eStore TradeMotion),

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Retail Portals Cont.

• ROI
• A gtgt Z / (X Y)
• A Portal Parts Sales / Month
• Z Portal Fees / Month
• X Gross Margin on Retail Parts/Accessory
  sales
• Y Sales that are New/Incremental Saved
• Upsides
• Productivity gains from streamlined order
  processing
• Lower returns

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Mass Marketplaces

• Primarily B2C AM, OE, Used
• Parts, Accessories, Merchandise Special Parts
• Many Buyers Price Sensitive Idle/Overstock
• Benefits
• Marketplace brand recognition traffic HUGE - WW
• Marketing and advertising muscle
• New sales (related parts, conversion) new
  customers
• Greater order processing productivity
• Segments Set Prices Auctions Classified Ads
• eBay Craigslist Amazon

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Mass Marketplaces cont.

• ROI
• Transaction Fees Primary
• Determine which parts you can afford to sell
• For idle, if all else fails, part of a loaf is
  better than none
• Work with Marketplace Partner
• Non-transactional fees waived
• Listing Shipping Automation tools available
• Upsides
• Productivity gains from streamlined order
  processing
• Idle reduction
• Upfront Fixed Costs

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Locators

• Two Types
• OE-Sponsored
• Independent
• Use
• Buyer searches for parts available (in stock)
• Locator provides list (by distance) of matches
• Buyer selects seller(s) from list of matches
• ROI
• OE-Sponsored More compliance than profit motiive
• Independent Same as for Retail Portal

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Summary

• Legend
• s secondary / minor or emerging
• Comp component / joint marketing

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Summary

• Action Plan
• Buying Parts
• If in wholesale, participate in automaker D2D
  programs
• If service other-than-franchised online buying
  discounts
• Investigate policy to buy idle parts (gtX if
  non-urgent)
• Selling Parts
• Consider and Re-Consider Automaker Programs
• Look for Automaker Funding of Other Programs
• If Idle is more than minor pursue online sales
• If not in wholesale, try Retail Portal or Parts
  Website
• If in wholesale, study/consider Wholesale Portals

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Dealer System Integration

• DMS
• Basic parts e-commerce is DMS independent not
  so for many advanced features/capabilities
• DMS Integration value highest for B2B, high
  volume
• Dealer-as-a-Seller
• Availability from DMS
• MSRP from DMS
• Customers Matrix Price from DMS
• Order
• Parts / Quantity to DMS
• Status from DMS

• Considerations
• DMS Integration Certification
• Capabilities Vary by DMS

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Dealer System Integration Cont.

• DMS Cont.
• Dealer-as-a-Buyer
• P.O. Populated / Integrated across DMS
  applications
• Improved parts receipting
• Shipping
• FedEx UPS
• GPS / Routing Your Delivery Fleet Elite EXTRA
• Wholesale Buyer System
• Mechanical Repair Shop Systems
• Collision Repair Shop Systems
• E-Commerce to E-Commerce Example Portal to
  Marketplace

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Special Cases

• Accessories
• Merchandise
• Niche Vintage, Performance
• Tires
• Idle
• Dealer Groups
• Dealer Websites Branding, Referral
• Trade between stores

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Challenges

• Responding to Customers (to their satisfaction)
• Availability
• Delivery day/time
• Accurate price (B2B and D2D not B2C issue)
• Dealer Systems Integration
• Returns
• Part Numbers
• Customer adoption uneven

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Whats Next?

• Continuing shift to e-commerce
• Locators
• Idle solutions (including bulk)
• Parts Service sites
• Parts Accessories In-a-Box Installed Prices
• Blurring of lines
• Portals will add dealer parts micro sites
• Locators will add parts catalogs and/or micro
  sites
• Catalog Improvements Automaker web EPCs become
  more useable by non-experts while All-makes OE
  catalogs become more accurate, complete

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Parts E-Commerce Dealers Guide

• Thank-You
• For more www.fellowesresearch.com

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