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1 Parts e-Commerce A Dealer Guide

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1 1 Parts e-Commerce A Dealer Guide

2 Agenda  Introduction  Market Factors  Challenges & Risks  Types (Dealer as Seller) ◦ Summary (Costs/Efforts) ◦ Dealer Retail Parts eStores ◦ Wholesale Portals ◦ Retail Portals ◦ Mass Marketplaces ◦ Other E-Commerce Types  Summary Charts  Dealer Experiences  Action Plans  System Integration  Trends  Special Cases  Q & A / Wrap-Up No one right solution – many dealers will benefit from multiple solutions Solutions depend on dealer’s franchises, DMS and off-line parts business Interactive Guide for your selection process Lots of material; key content in 1 st half Range of experience: show of hands 0, 1, More

3 Introduction  Why Attend a Parts E-Commerce Seminar? ◦ Your Customers/Prospects ◦ Your Competitors ◦ Your Costs ◦ Results (May Retain / Add Customers, Conversions & Related Parts, CSI – Without Adding Staff or Increasing Capital Invested) ◦ Innovation Focal Point (6 Types; > 25 Suppliers; >> 50 Solutions) ◦ Messy market [more failures that successes; large & growing body of suppliers] Related Dealer’s Service Websites Tire Websites – Major Advancements E-Commerce is Inevitable New Wholesale eStore New players likely to enter with new approaches

4 Introduction [Cont.]  Why listen to me? ◦ Parts Systems Innovator  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) ◦ No Horse in the Race ◦ Structured / Actionable

5 Market Factors Solution Clusters Collision (Body Shop) Mechanical (Fleet / IRF / All)

6 Market Factors [Cont.]  Associated with Success: ◦ Price Advantages (for Buyer) ◦ Mandates (rare – on the rise) ◦ Systems Integration (B2B; Buyer-side primary; Seller-side secondary) ◦ Dedicated resources – Seller ◦ Boosts communications (buyers still need assistance and fast confirmation) ◦ Other buyer conveniences (24 x 7 order submission; access to digital invoices; parts catalogs; …) Failure common when many of these factors are missing or are weak

7 Challenges & Risks  Costs ◦ Program pricing can be complicated and/or expensive ◦ Set-up and support/maintenance may be challenging ◦ Optional SEO/SEM & other advertising/marketing costs  Customers ◦ Digital buyers’ expectations are high – fast, accurate responses required ◦ Some buyers prefer phone (you’ll support both – w/ some exception solutions/scenarios) ◦ Some buyers refuse to “own” Part (EPC) look-up  Failure is an option

8 Parts E-Commerce Types (Costs/Effort) Sales TypeFeesSet-Up / Maint.Other (alert) Dealer (Retail) eStore Primary: B2C Emerging: B2B Upfront Fees Monthly Subscription MinimalSEM/SEO, advertising Wholesale Portal Primary: B2B Secondary: D2D Upfront Fees Monthly Sub (possible low commission) Customer Info Integration (DMS, …) Buyer enrollments Retail Portal Primary: B2C Emerging: B2B Upfront Fees Monthly Subscription and/or Commission MinimalPossible pricing limits Market Place Primary: B2C Secondary: B2B Listing Fees Monthly Subscription Commission Part Applications Uploading parts Files DMS Direct Access Primary: B2B (fleet) Upfront Fees Monthly Subscription Customer credentials Locator Primary: D2D Secondary: B2C Upfront Fees Monthly Subscription Commission (Idle) Upload parts files Bidding, R/A, Buyer System Primary: B2B Upfront, monthly & (low) commission fees VariesMay verify /process and still not get order

9 Dealer Parts eStore  Website for selling parts directly (plus Accessories & Merchandise) ◦ B2C now, B2B extensions emerging  Two types: ◦ New Internet Brand (aggressive discounts, AM, …) ◦ Dealership Brand (retail prices; limit service conflicts; customer search satisfaction)  Benefits ◦ Increased sales (most incremental for dealer) ◦ National [International] reach – different markets  TradeMotion, Parts Website, R&R, RevolutionParts, SkyParts, WHI, DST, InterCity Services, PartsFirm, … Accessories: Insignia, SBS, … Issues: 1.Domain Name: OE IP 2.Buyer access Suggestion: get both for less than price of two Show of hands

10 Dealer Parts eStore [Cont.]  Economics – Internet Parts Brand ◦ Costs: from just over $100/mo. ◦ Transaction fees (credit card / PayPal) – several % ◦ Additional marketing costs (SEO/SEM) ◦ S&H fees; Restocking fees (covers returns) ◦ Evidence of loyalty & less discounting for quality support ◦ Winners: high volume & low prices (depend on special incentives)  Economics – Dealership Brand Extension ◦ Value: TBD (value = brand, CSI, …) Issues with omitting accessory OE/AM catalogs from eStores

11 Wholesale Portals  Connects Wholesale Buyers to Sellers via Cloud (indirect)  Types: ◦ OEM-sponsored (Toyota TPAS, Volvo-Mack Nexpart, VW partslink24, …) ◦ All/Multi-Makes (Nexpart, CollisionLink, TurboParts, RepairLink, …)  Segments: Mechanical, Collision & Dealer (D2D)  Attributes / Capabilities: ◦ Dealer’s customer-specific pricing; availability ◦ Dealer invoice (typically, no credit card or PayPal) ◦ Dealer delivery or customer pick-up (> 95%) ◦ Potential OEM or dealer purchase incentives ◦ Potential for dealer “microsites” Show of hands

12 Wholesale Portals [Cont.] Automaker / buyer program compliance may simplify ROI: participate or exit wholesale  Benefits / Economics ◦ Customer satisfaction & retention (pre-existing trading partners) ◦ More sales (related parts, conversion, new customers) ◦ Possible improved order processing productivity  Other ◦ Customers may research parts (but order by phone – hidden results) ◦ No additional marketing costs to dealer (SEO, SEM) ◦ Upfront and Ongoing Costs / Efforts (enrolling buyers, set-up, …)  Mechanical: WHI, DST vs OEC, Infomedia, Lexcom, …  Collision: OEC, Infomedia, WHI & TradeMotion

13 Retail Portals  Connects Retail Buyers to Sellers Indirectly via Cloud  Parts, Accessories, Merchandise, Tires & Special Parts  Often an automaker program/solution  Benefits ◦ Marketing muscle – top search results (no SEO/SEM costs) ◦ New sales / new customers (referrals only to participating dealers) ◦ Greater order processing productivity  Risks: fees & restrictions  Ford (FordParts.com – OEC) ; Honda (eStore) ; Chrysler (Mopar eStore – Chrome Data), Nissan (eStore – TradeMotion), … Show of hands

14 Retail Portals [Cont.]  Economics ◦ Revenue:  Referrals will be ‘lost’ without participation  Dealer may be charged significant % of sale ◦ Upsides  Productivity gains from streamlined order processing  No additional marketing costs … ◦ Other Considerations  Restocking fee may be governed by Portal policy  S&H may be set by Portal (enough to cover actual costs?) Issues with restrictions on marketing/selling accessories via Retail Portals

15 Mass Marketplaces  Primarily B2C – AM, OE, Used  Parts, Accessories, Merchandise & Special Parts  Many Buyers are Price Sensitive  Benefits ◦ Marketplace brand recognition & traffic – worldwide ◦ Marketing and advertising muscle ◦ New sales from new customers – but low margin ◦ Greater order processing productivity  Segments: Set Prices; Auctions; Classified Ads  eBay Motors; Amazon; Craigslist OEM Programs in Mass Marketplaces: Navistar Show of hands

16 Mass Marketplaces [cont.]  Economics ◦ Transactional Fees, listing fees & storefront fees  High volume parts at low margins (margin from allowances, TL discounts, other automaker programs)  Niche parts – hard-to-find, …  For idle, part of a loaf is better than none  Marketplace Partners (WHI, TM, Ford/Driverside, DST – integration only, …)  Convenient parts list transfer w/ application info  Non-transactional fees waived  Listing & Shipping Automation tools available ◦ Upsides  Productivity gains from streamlined order processing  New markets, new customers, inventory liquidation, …

17 Other E-Commerce Types  DMS – Buyer Client ◦ Dealerships provide parts buyers with direct DMS access to check availability & submit orders via web app (user has part numbers from previous orders or separate parts catalog) ◦ Emerging – Deployed by Karmak (including capability to search on partial part number and part name as well as saved parts lists); deployed by UCS (R&R Power) ; and included in some DMS fleet solutions (including ADP FleetConnect)  Dealer Wholesale Websites / eStores ◦ Emerging: InterCity, PartsFirm, Parts Website, TM, SimplePart… ◦ Varied including niche markets – high customization options Show of hands

18 Other E-Commerce Types [cont.]  Parts Locators ◦ Types: OE-Sponsored & Independent ◦ Use (D2D and beyond) : (i) Buyer searches by part #; (ii) Locator match list (by distance); (iv) Buyer selects seller(s) ◦ Economics  OE-Sponsored: Compliance, buyer convenience/orders  Independent: ROI calculation like that for Retail Portal  Bidding Solutions [Mandate] ◦ Buyer posts parts needed (and, possibly vehicle info) ◦ Sellers receiving notification, bid on providing parts ◦ Commission (low single-digits) per order

19 Summary Legend  = emerging, limited, special conditions or …

20 Parts e-Commerce Legend  = emerging, limited, special conditions or … Summary

21 Parts e-Commerce Legend  = emerging, limited, special conditions or … Summary

22 Dealer Experiences  New consumer parts sales, fewer returns and many repeat buyers – Ford dealer & Parts Website customer  More sales, fewer returns, & higher satisfaction from body shop customers – Nissan dealer & OEC customer  Customized eStore generating $100k/mo. in new business– Chrysler dealer & Trademotion customer  Large volume of parts from new non-local consumers – Chrysler dealer & eBay Motors customer  Dramatically higher productivity and buyer satisfaction – multi-franchise dealer group & WHI customer  Customers love 24 x 7 ordering &real-time inventory access; landed new accounts – GM dealer & DST customer

23 Action Plan  Business Assessment ◦ Which Sector(s) – Collision, Mechanical [B2B] or B2C ◦ Which Franchises ◦ Which DMS  Select, Try (hard), Evaluate, Keep / Discard – Repeat  General ◦ Look for Automaker Funding (co-op programs) ◦ Send your contact info to & I’ll generate a free parts e-commerce plan for your

24 Dealer System Integration  DMS ◦ Advanced e-commerce capabilities – DMS dependent ◦ DMS Integration value highest for: B2B, high volume ◦ Capabilities  Availability from DMS  MSRP from DMS  Customer’s Matrix Price from DMS  Order  Parts / Quantity to DMS  Status from DMS ◦ DMS Platforms supporting e-commerce include: ADP, R&R, DealerTrack, Karmak, …

25 Dealer System Integration [Cont.]  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 ◦ WHI to eBay Motors ◦ TM to eBay Motors ◦ OEC to eBay Motors via DriverSide & Ford

26 Trends  Opportunities / Advances ◦ Expanding Systems Integration ◦ Wider range of buy-side platforms (tablets, smart phones, …) ◦ Catalog improvements ◦ Pricing incentives use expanding – high impact ◦ Online chat ◦ Dealer parts deliveries to personal residences ◦ Declining parts returns (better catalogs, e-commerce applications, …) ◦ Dealer-as-a-Buyer  Challenges / Threats (to dealerships) ◦ Bidding Systems (State Farm / PartsTrader) – Shops Resisting ◦ AM sector’s success with parts e-commerce

27 Special Cases  Accessories / Merchandise  Niches: Vintage, Performance, Power Train  Tires  Idle  Dealer-to-Dealer (D2D)  Dealer Groups ◦ Dealer Websites Branding, Referral ◦ Trade between stores  Dealer as a Buyer ◦ Distressed parts (idle, primarily) ◦ AM

28 Questions & Answers  Your Questions Thank-You For more:


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