As we work with many dealers, we hear recurring misconceptions about selling parts and accessories online so we thought we would clear the air. Check out the most common myths we hear and what the truth really is.
There's nothing to fear when it comes to parts eCommerce. Sure, it requires a bit of time and effort, and there's a bit of a learning curve when it comes to getting started. But most of the fears revolving around selling parts online are simply unfounded—they aren't anything you should worry about.
Myth #1: Just build a website, and customers will come.
Customers have no way to find you unless you do some kind of marketing. Whether you try your hand at DIY marketing or hire someone to do it for you, getting the word out is essential to getting discovered by potential customers and driving traffic to your parts website.
Years ago, marketing wasn't quite as important. But these days the competition between dealers is intense, since so many potential customers are at their keyboards and ready to buy. How can you be the first one to attract that customer's attention?
To test it out, try finding your parts site without using your actual business name. For example, Volkswagon sellers can look up "VW spark plugs." Do you see your dealership or parts store in the results? If not, neither did your potential customer. They saw someone else and shopped there instead.
You can start with something simple, like a Facebook page, and then move on to Google Shopping campaigns and other forms of advertising. It's really easy to build an emailing list and draw in customers with promotional emails every time you have a sales event. The important part is that you do something.
If you don't want to deal with marketing yourself, then hire a marketing agency. The professionals there should know how to really optimize your marketing strategies so you really do get the most bang for your buck.
Myth #2: You have to be internet savvy to succeed.
Do you need a lot of previous knowledge and experience to get started selling online? It helps, but remember that you’re not in this alone. Your solution provider will set up the entire initial website for you, so you won’t have to worry about technical details.
Once the parts store is set up, your solution provider will also train on you on eCommerce success and managing your website. RevolutionParts even provides ebooks and blog articles to help you learn on your own time.
Myth #3: You will upset local customers if you sell online.
Because of the intensity of online competition, prices have to be as low as possible—you simply can't set a 20-25% margin for your parts. Will that upset local customers who notice that online costs are lower than your dealership counter price?
It’s actually not something you need to worry about. You can replace the parts request form on your dealership website with a parts catalog and shopping cart, with everything priced the same as in-store.
When it comes to selling nationally, simply create a separate website that isn’t associated with your dealership in order to set competitive prices. Price-conscious online shoppers already know they can get better deals by researching online, so you aren’t sacrificing margins by selling nationally.
Myth #4: Selling parts online is too price-competitive to be profitable.
Yes, it’s a competitive market, but it’s certainly still profitable if you play it right. Dealer success ranges drastically, but the average dealer with RevolutionParts made over $350k in 2015.
Sure, you won't be able to mark up parts at 20 or 25%. But you can still make a profit. Most eCommerce parts stores report that 12-15% is the profit margin sweet spot when setting price.
When selling, choose a strategy: high volume or high profit per order. When you hit certain sales volumes, you can earn manufacturer incentives depending on your business. As for higher margins on orders, you’ll need to be smart about excluding certain categories of parts based on price point and margins. You will also need to differentiate on speed and service to be as competitive as possible.
This isn’t to say selling online is free, easy money. You’ll still have to put in some time and effort, as well as investing in marketing and learning success tips and tricks. But it’s not nearly as difficult as you might think.
Don't let the myths you’ve heard scare you away from starting an online business with great potential for success. With the support of a great eCommerce provider, a profitable parts website is in reach for any dealership willing to try.