The Dealers’ Guide

Introduction Why & Why Not Dealer-as-a-Buyer Dealer-as-a-Seller

◦ Dealer Parts Websites◦ Wholesale Portals◦ Retail Portals◦ Mass Marketplaces◦ Locators

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Summary & Actions System Integration Special Cases Challenges What’s Next? Wrap-Up

Parts E-Commerce – Online Parts Trade

No one right solution (unlike main dealer websites)Some dealers need multiple solutionsSolutions depend on dealer’s franchises and off-line parts business

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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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: > 20 Suppliers; 6 Types (with distinct benefits, costs, buyer segments); 50 Solutions

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DSPs IAP WHI eBay Motors OEC / SBS Sellers AM N / A Dealer 13,000 Other 1,500 Total 19,000 9,000 14,500 Buyers AM 20,000 Dealer 14,000 13,000 Other 1,500 Total 140,000 300,000 Transactions

Orders 30,000 daily 245M lifetime $$$

1.75M daily > 2B annual 1.5B Qtr 18B – 12

years

AM crushing OE; Volumes Substantial

DST reports transaction volumes same order of magnitude as IAP & WHI

Approaching $1B/mo.>10% annual growth

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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/SellerChaos

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Trading Bond (Importance to Buyer)

Low High

Buyer Urgency

(relative to price)

Low Mass Marketplaces (Primarily B2C & Semi-Pro)

Dealer Parts Websites (Primarily B2C & Semi-Pro)

High Parts Locators / Retail Portals (D2D, B2C)

Wholesale Portals (B2B)

Mechanical Repair (All & Fleet only)Collision Repair

DaaS - Segmentation

Solution Clusters

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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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 Shop’s 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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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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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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AM◦ Advantages of selective purchases via e-commerce:

Discounts for purchasing via e-commerce Single source: makes not covered by dealer’s

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

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WORLDPAC NAPACARQUEST AutoZone

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Key Attributes Benefits Comments

Dealer Websites

Heavily B2C Web parts catalog Often new buyers Dealer pricing FedEx, UPS, USPS Credit Card; PayPal

Dealer Brand protected CSI up (digital consumer) Sales up Costs down

Payment options and automation, shipping options, vary widely

Available 24 x 7 $125 to $200/mo. per franchise

plus – for a few – extras

Wholesale Portals

Only B2B Dealer invoice/billing Customer-specific pricing Often web catalog Often buy-side integration Availability often built in

Often buyer driven Retain Sales (defensive) Costs down

Dealer delivery and/or pick-up Available 24 x 7 Often reinforces established

trading pairs Under $300/mo. per franchise

unless per Shop fees

Retail Portals

Web parts catalog Buyer matched to dealer May support some B2B MSRP Pricing (plus Matrix) Availability may be built in

OE Brand protected CSI up (digital consumer) Sales up Costs down

Payment options and automation, shipping options, vary widely

Available 24 x 7 Up to $200/mo.

Mass Marketplaces

Heavily B2C Often discounted Buyer selects “deal” Web catalog embedded FedEx, UPS, USPS Credit Card; PayPal

Market reach is large Volume sales potential

Brand implications TBD Full e-commerce % of sale that ramps down with

transaction value

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Dealer Parts

Website

Wholesale Portal

Retail Portal

Mass Marketplace Locator

Buyer Segment

B2C + B2B Only B2C + B2C + D2D / Mixed

Customers > 90% New Customers

Mostly Existing Trading Partners

Mixed Mostly New Varies

Customers’ Payment Options

CC, Paypal, most digital forms

Dealer invoice CC, Paypal, many digital forms

CC, Paypal, most digital forms

Generally off-line

Customers’ Delivery Options

Ship via UPS/FedEx Dlr Options Emerging

Dealer delivery

Ship via UPS/FedEx Dlr Options Emerging

Ship via UPS/FedEx

Determine off-line

Availability

Rare Nearly Always (real-time & daily)

Mixed (if so, daily)

If listed should be in stock

If listed should be stocked

Parts Catalog All-Makes Nearly Always – OE & All-Makes Catalogs

Always – OE & All-Makes Catalogs

All-Makes None

Parts Pricing Often Internet Discounts

Customer-specific pricing

Often OE MSRP (for B2C)

Often discounted None

Branding

Dealer branding – new Internet brand

Portal & Dealer branding

Automaker & Dealer Branding

Marketplace & Seller Branding

Locator & Dealer

Fees / Expenses

$ 125 to $200/mo. per franchise +++

< $300/mo. per franchise +

< $200/mo. (avg. tier)

< 8% of sales

$50 to $200/mo. per franchise (avg. tier)

Website dedicated to selling parts◦ Cousin Larry Can’t Build – Catalogs & Billing◦ Parts – Plus Accessories & Merchandise ◦ > 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

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Issues:1.Brand vs. New Brand2.Domain Name: OE IP; Dealer IP/Subdirectory

ROI◦ A >> Z / (X ∗ Y)

A = Website Sales / Month Z = Fees for Website / Month X = % Gross Margin on Retail Parts Y = % Sales that are Incremental

◦ Set S&H 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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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

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Issues:1.Very different from Retail2.All-Makes vs Franchise3.Where $$$ is; Effort

ROI◦ (Y ∗ X) >> 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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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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ROI◦ A >> 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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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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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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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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Many Checks Not Better Economically as Dealer Typically

Must Pay For Each Product/Service (unified dealer client a benefit)

Dealer as a Buyer Dealer as a Seller

Idle

AM

D2D

D2D

B2B

Mec

hani

cal

B2B

Colli

sion

Cons

umer

& S

emi-

Pro

Part

s

Cons

umer

Ac

cess

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s

Amazon Marketplace

Chrome Data Retail Portal

Craigslist Marketplace

DealerMine Idle Market Idle

DST Whsle Portals

eBay Motors Marketplace

IAP Whsle Portals

Infomedia Whsle Portals

Insignia Group Dealer Websites

Lexcom Whsle Portals

Parts Website Dealer Websites

OEConnection Whsle Portals s

RevolutionParts Dealer Websites

R&R Dealer Websites

SBS Accessory Portal

SimplePart Dealer Websites

SkyParts Retail Portal

Software Global Dealer Websites

TradeMotion Dealer Websites

WHI Whsle Portals s s s

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 (>$X 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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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 Customer’s Matrix Price from DMS Order

Parts / Quantity to DMS Status from DMS

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Considerations:1.DMS Integration Certification2.Capabilities Vary by DMS

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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Accessories Merchandise Niche: Vintage, Performance Tires Idle Dealer Groups

◦ Dealer Websites Branding, Referral◦ Trade between stores

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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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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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Thank-You

For more: www.fellowesresearch.com

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