Amazon dominates online parts sales, however dealers nonetheless have benefits

Amazon dominates online parts sales, however dealers nonetheless have benefits

amazon auto parts

Auto Parts: There’s ‘Low-Hanging Fruit’ to Reclaim from Amazon

Dealers who use Amazon nonetheless need to diversify their components business model, consultant Hedges advises. He says he sees “plenty of sellers who sell on Amazon but want to be less depending on it.” He recommends paying enough attention to other e-commerce platforms — notably eBay, which he notes has less attain but also charges decrease charges — and even more, the dealership’s own website. Hedges estimates that 10 to15 percent of U.S. franchised dealerships sell on Amazon Marketplace and says that share is prone to develop.

Amazon seems intent to compete with the traditional auto parts retail chains on convenience and lower prices. For instance, one RedTop Optima automobile battery that sells for $216 at AutoZone is listed at $166 on Amazon. Additionally, Amazon offers same-day delivery on auto components in 40 US cities, funding bank Jefferies stated in a report released last September. This could take away the necessity to ship bulky metallic components via traditional package delivery. This will put Amazon in direct competition with aftermarket auto elements retail chains like Autozone, Advance Auto Parts, and O’Reilly Auto Parts.

The company makes around fifty eight% of its gross sales to technicians at garages, service stations and auto sellers, who typically do not know what parts they will want until the day begins. Rapid delivery is important. One of them is Advance Auto Parts. (New & Used Cheap Car Parts)

Hedges says it appears that Amazon is shifting the combination of the elements it sells, focusing its own efforts on high-volume elements similar to tires, brake pads and filters while relying extra closely on Marketplace companions — including dealerships — for area of interest gadgets and elements for lower-quantity auto manufacturers. In 2019, more than $12 billion price of auto elements and accessories are expected to be bought online within the U.S. — twice the quantity of just 4 years in the past. That explosive development might need given new-automobile dealerships an enormous alternative to expand their components enterprise on their websites.

The Walmart partnership is essential as a result of it’ll bring Advance into Walmart’s 2,500 auto care centers around the country. Leveraging Walmart’s store footprint will assist Advance broaden identical-day delivery as competition intensifies and Amazon finds methods to speed up parts supply. Amazon is including more manufacturers to its web site and attempting to get clients conversant in buying parts online. During the Black Friday and Cyber Monday stretch Amazon promoted automobile battery bounce starters and wiper blades for the first time. They’re 30% off until December 1.

Advance has designed an enormous logistics community to deliver parts to auto mechanics and do-it-yourself automobile house owners instantly. However, it can also be powerful to promote within the Automotive Parts class as a result of there’s a lot competition. One method you possibly can edge aside from the group is with actually competitive pricing, and a nice byproduct of that is larger possibilities of successful a Buy Box and getting a big increase in sales.

The market generated more than $sixty eight billion in revenue in 2015, in accordance with Grand View Research. And The Financial Times reported last year that, whereas US auto gross sales grew just one% per 12 months over the previous decade, sales at the major aftermarket auto parts chains grew 7% per year. This is basically due to an growing older car fleet within the US, which has drummed up business for aftermarket components sellers. In a September report, investment bank Jefferies said Amazon is offering similar-day delivery for auto parts in forty major US cities — at prices that common 23 percent lower than those of O’Reilly, Advance and AutoZone. Amazon, which rang up income of $128 billion in the 12 months ended Sept. 30, might see its auto elements business increase greater than 50 % this yr, to $5 billion, according to one Wall Street analyst’s current, confidential prediction circulated among purchasers.