Thinking about selling auto parts online for the first time? Online parts sales are growing steadily year over year, and this growth is expected to continue for several years. Consumers are more accustomed to buying parts and accessories online, and the tools for selling parts and accessories online have never been better.
Still, while it's a great time to start selling parts and accessories online, it's also difficult for new ecommerce retailers to get established. If you're a first time "etailer," there are some things you can do to maximize your odds of success and avoid common mistakes.
Step 1 - Get a Handle on Order Fulfillment
If you're new to selling parts online, picking orders off the shelf, packing them in a box, and shipping them out the door probably doesn't sound complicated. But here's the thing: Pick, pack, and ship is where most first-time parts retailers lose the most money.
Fulfillment best practices include:
- Designating a single individual to be responsible for managing all orders
- Verifying fitment for every order to minimize returns
- Having a plan to process and ship (when possible) each order the day it is placed
- Having a set communication plan for every back-order and/or discontinued part notification to send to consumers, so that you can avoid a customer service problem
- Making sure everyone involved in fulfillment is cognizant of fraud
All of the above applies equally to drop-shipping and selling from inventory. Whether you're a franchised auto dealer selling OEM parts from inventory or a performance shop selling aftermarket parts via drop-shop, these best practices apply.
Step 2 - Embrace the Phone
A lot of first time ecommerce retailers assume that consumers will be able to buy parts or accessories without any sort of support. While this is often the case, a good percentage of consumers prefer to complete a transaction over the phone.
- Some consumers want a phone call to verify details that aren't found on the website, and/or confirm something they found on the site that isn't 100% clear to them.
- Other consumers may have doubts about your website, and may place a phone call as a way to evaluate the company before buying.
- Many consumers prefer to order by phone because they perceive it to be more secure.
Whatever the customer's reason for calling, it's important to treat each and every phone call as a sales opportunity. Every customer should be asked for the sale, and staff should be secret shopped periodically to make sure they're attempting to sell every customer they talk to.
If you're an auto dealer, it's important to properly train staff to speak with retail parts customers by phone. When we secret shop our dealership clients that are selling OEM parts online, we often find that phone support staff lacks polish and does not ask for the sale.
Finally, it is not smart for staff to answer a customer's question on the phone and then tell them to "just go ahead and order on the website." If the customer on the phone is ready to buy, take their money over the phone. This shouldn't need to be said, but it is frighteningly common.
Step 3 – Check Your Pricing
If you're selling OEM parts or accessories online, you'll find that many of the companies selling parts online are working with a very small margin. Many OEM parts are sold for dealer cost plus 10-15%, which is considerably less than retail part pricing. Of course, if your OEM parts store is going to compete, your pricing will need to be in line with the competition. Be sure to check your part pricing against the top ranked sellers in your niche.
Additionally, if you're an OEM parts and accessories etailer, it's a good idea to check your shipping pricing against the competition as well. While consumers don't compare shipping costs as often as they compare part costs, it's smart to make sure both parts and shipping costs are competitive.
If you're selling aftermarket parts or accessories, many of them are subject to MAP (minimum advertised price) policies. MAP policies provide for healthy margins (cost plus 30-40% is typical), but most aftermarket parts etailers give away a good chunk of this margin by providing free shipping anywhere in the continental USA. So, if you're selling aftermarket, it's important to evaluate your competitor's shipping policies.
Whatever you're selling, the important thing is to be cost competitive. Many consumers will leave your site if they can find the same part a few dollars cheaper somewhere else.
Step 4 - Come Up With a Website Marketing Plan
Many first time auto parts ecommerce etailers believe that if they build a good site the consumers will come. Sadly, this is not at all the case. If a parts ecommerce website is going to generate enough profit to be a good investment, one to two years of marketing effort is usually required.
Ecommerce marketing is typically focused in five areas:
- Search Engine Optimization (SEO) – If your website ranks highly on Google, Bing, or Yahoo, you can receive hundreds or thousands of website visitors every day. To have a highly-ranked site, you need several levels of content - content about your company and your policies, content for landing pages, blog content that helps potential customers, and, finally, you need a plan to create high-profile content that will earn links (check out our blog post about auto parts marketing content to learn more).
- Email Marketing - Email isn't sexy, but it works. If you have a customer's email address, you want to send them a regular newsletter to develop a relationship. Of course, emailing a coupon, special offer, or new product announcement is a good idea too.
- Social Media Marketing - For some auto parts etailers, social media is a great tool for raising product awareness and building word of mouth. For other retailers (like OEM replacement part retailers), social media is mostly a tool for customer retention. A good social media strategy reflects your customer.
- Conversion Rate Optimization and Usability Testing - While most ecommerce platforms are better now than they've ever been in terms of usability, most websites have basic usability problems. What's more, there's usually a disconnect between what consumers care about and what parts etailers want to talk about. Therefore, conversion and usability testing is an important part of any marketing activity.
- Pay-per-click (PPC) Advertising – While it can be argued that advertising isn't exactly "marketing," it's safe to say that any online parts etailer needs to have a PPC strategy. It may be very limited and focus only on re-targeting, or can include general awareness and brand ads, top search terms, etc. PPC is a key part of the marketing "mix" for every retailer, however.
Most parts etailers will find marketing a bit overwhelming. Still, a little bit of time spent learning the basics is usually a good investment. If nothing else, a good understanding of the basics makes it easier to hire a marketing agency that will do a good job.
A Note About Auto Parts Ecommerce Platforms
Last but not least: If your company is still evaluating ecommerce platforms, it's important to evaluate each platform from both a fulfillment and marketing perspective.
In terms of fulfillment, you want an ecommerce platform that will connect with a fulfillment tool like ShipStation or ShipWorks. It's also a good idea to make sure the ecommerce platform will interface with your inventory and accounting software. For dealerships, this often means looking for a platform that works with the DMS.
In terms of marketing, there are a handful of features that should be considered essential:
- Platforms that can't support your content strategy are hard to grow. If you can't add blog posts to the site or create landing pages with unique content, you should keep looking.
- Platforms that can be customized in terms of look and feel are also important. Conversion and usability testing is pointless if you can't make changes based on test results.
To be blunt, none of the products on the market are perfect when it comes to auto parts ecommerce. But some are definitely better than others.
Summing Up - The Opportunity Is Awesome
Launching a new auto parts ecommerce site is a lot of work. While this fact can be daunting, it's also a big part of what makes auto parts ecommerce an awesome opportunity. Many of the companies that launch an auto parts ecommerce site will struggle for a year or two before pulling the plug. As a result, companies that invest and stay the course are all but guaranteed to prosper.
This is a guest post by Jason Lancaster, President of Spork Marketing. Spork is an online marketing agency that specializes in auto parts and accessories marketing.