Suppliers and dealers alike finding gold on the World Wide Web A year ago, vehicle manufacturers were explaining to their dealers just how important it is to get in on the $7 billion accessories market. There's no question that tapping into that segment of the auto industry, of which dealers hold a mere 10.5%, would improve the bottom line of any dealership or dealer group.
Dealers like Stan Kujawa of Findlay Ford in Findlay, OH take selling accessories seriously. Mr. Kujawa, for example, outfits many Ford trucks with several accessories before putting them on the lot for sale. He thinks it makes them sell better.
As the Internet continues its assault on the automotive business, it should come as no surprise that aftermarket retailers are making their presence known on the World Wide Web. So if dealers think they have all the bases covered with a web site for vehicle sales, they better think again.
Twenty-six years ago, Effingham, IL-based Corvette enthusiast Mike Yeager started Mid-America Designs, a catalog business offering parts and accessories to fellow Corvette owners. Three years ago he added Volkswagen parts. A year ago, he added Porsche parts. Now, whether he likes it or not, he's beginning to sell his wares via a web site.
"All we have on our web site is an electronic order blank," Mr. Yeager explains. "It's not interactive at all. And as clunky as we are, we're doing about $3 million a year."
CarParts.com, based in El Segundo, CA, was launched in April 1999 as an on-line, aftermarket parts exchange targeted at do-it-yourself car enthusiasts. Eighteen months later, CarPart.com (which boasts the largest on-line catalog of vehicle accessories, performance parts, OEM parts, recycled parts and tools and shop supplies) expects $30 million in annual revenue.
Since its inception, the on-line parts retailer has recorded double-digit monthly sales growth and a triple-digit increase in unique visitors to its web site.
Clearly there is a market for aftermarket parts on line.
"I think the Internet will be big for the aftermarket," says Mid-America's Mr. Yeager, who nevertheless warns, "but you're going to have to process and fulfill orders."
In addition to its catalog and electronic order blank, Mid-America posts installation instructions for the parts it sells.
"Sometimes a customer orders a part and can't manage to install it so he ends up sending it back," Mr. Yeager says. "By posting the instructions on the Internet, they can decide before they buy the part if they can install it or not."
He adds, "We want to provide a service on the Internet. I want to offer the same level of customer service on the web as we do at Mid-America."
CarParts.com says it intends to help dealers broaden their parts and accessories sales by offering its line of parts to dealership customers.
Dealers who sign on with CarParts.com are issued configurator software to show customers what their new vehicles will look like with the accessories they've selected. It also adds up the cost of the aftermarket parts and integrates them into the final selling price of the car.
The system can also include parts and accessories that dealers sell in house.
"With us dealers can offer more to their customers," says Peter McLaughlin, director of communications for CarParts.com. "This allows dealers to integrate CarParts into their selling system to improve their accessories and parts sales. We don't try to step between dealers and their customers."
Mr. McLaughlin admits that the company's top challenge is product fulfillment. "Right now, we promise dealers parts in three days," he says. "Expectations have to be well-defined to the customer."
Another challenge the company faces is integrating the pricing software with each of the various finance companies with which a dealer works. Currently, it only can be used with one bank.
"It's too early to judge how much a part of our business it will be," says Mr. McLaughlin. "Our goal is to grow both the commercial and the consumer businesses as fast as possible."