As costs continue to rise and many consumers are becoming increasingly sensitive to pricing, many leaders within automotive dealerships find themselves scouring every corner of their business for ways to drive revenue growth and maintain profit margins. Without a doubt, one of the biggest areas for opportunity is typically found within the parts and service department, more commonly referred to as “Fixed Ops.”
In this article, we’ll take an in-depth look at how selling parts online can empower your fixed operations department to not only increase revenue but also reduce costs for your store.
1. Leverage Online Sales to Boost Overall Profit
Venturing into online parts sales creates a substantial new cash stream for your dealership as engaging with online shoppers not only expands your consumer base but also helps increase potential sales volume. By selling parts online, your dealership immediately gets access to a far broader market of potential buyers than could ever be limited in the confines of your local market. This greatly enhances the overall profitability of your dealership if stores have never ventured into online sales since this will open the doors for new customers to enter your business virtually while at the same time enhancing the buying experience for existing customers in your local area. This has some very positive potential upside from running online sales through your parts department, making this an absolute must-do decision for any General Manager looking to really move a store’s P&L forward.
2. Leverage eCommerce in Expanding Reach
A really great benefit to internet component sales is being liberated from the tyranny of the locally only sold part, since anyone can sell just about everywhere online. When selling online, your dealership is no longer limited to catering only to local clientele as an online parts store allows you to access customers on a national or even international scale. The broadened market reach allows you to engage a whole new set of prospective shoppers who may otherwise never visit your physical establishment, significantly enhancing your sales potential. eCommerce is also an excellent compliment to any digital marketing strategy because it allows for your marketing efforts to convert interested leads into real world customers much more quickly and effectively.
3. Streamline Customer Experience
Online consumers today have brought their seamless, digital-first expectations from their online purchasing into the automotive parts-buying world. GMs who would want to see their stores succeed in this new economy must focus on the expectations of ease & convenience that the consumer has come to expect. By providing an online parts store, you are directly addressing their expectations and investing in repeat business. The ease of 24/7 ordering, easy parts identification, and home delivery enhance customer satisfaction and build loyalty. In an age where customer experience may determine a dealership’s success or failure, offering such convenience is not just advantageous—it is imperative.
4. Reduce Obsolete Inventory
All dealerships eventually face the challenge of having to deal with slow-moving or obsolete parts taking up valuable inventory space and capital. Selling parts online will help to avoid having a buildup of old inventory on your parts shelves as listing these parts on your eCommerce site significantly enhances their visibility and probability of sale. Selling inventory online becomes especially powerful when matched with a strong promotional discount, as it can further entice price-sensitive buyers who may not have made a purchase decision otherwise. This approach helps mitigate against inventory obsolescence, frees up physical space in the parts department, and releases capital for reinvestment in higher-demand items. It’s a win-win scenario that improves both your parts department’s inventory management and sales performance.
5. Streamline Operational Efficiencies
Digitizing your parts department isn’t just about selling online; it’s about transforming the way your dealership’s fixed ops department conducts business. E-commerce platforms provide robust capabilities that automate several tedious tasks to potentially affect order fulfillment time while at the same time minimize manual error opportunities, which can lead to a negative customer experience. You understand that parts & service are among the most time-sensitive sectors of the auto industry, and that streamlined operations tend to compound, bringing you closer and closer to an efficient and profitable fixed ops department. In addition, you save costs while being able to work with increased accuracy; your team then spends less time on administrative and transactional tasks, devoting themselves to value-added activities. For an ops-conscious GM, online parts sales can be the difference between mediocre and exceptional store operations.
6. Access to Data-Driven Decisions
One of the biggest often overlooked perks of e-commerce is access to new sources of data. Most everyone in the auto retailing business openly touts the value of data in the current digital-centric business world, and the largest source of it lies in the sales platforms of e-commerce. By selling parts online, you can also gain access to detailed analytics that would include sales performance, customer demographics, inventory levels, and in-store sales trends. Such detailed information may, in turn, be used to make data-driven decisions about such important retail operations as inventory management, pricing strategy, and promotional activities.
7. Leverage OEM Incentives
Most OEMs appreciate the need for selling parts online and will provide financial incentives to dealerships that adopt this channel. An example is co-op marketing funds to be used for digital marketing or e-commerce within your four walls. Participating in those allows for additional revenue streams from direct income from your OEM partners and can be a big additive, making the decision to sell online from this and other perspectives even more economically positive. Make sure to check with your OEM rep to see what options might be available to your dealership and whether or not e-commerce platforms are available for co-op marketing reimbursement
8. Prepare for Industry Evolution
The automobile industry is experiencing a significant transformation due to the emergence of electric cars (EVs) and evolving consumer preferences. An established online parts presence enables your dealership to more readily respond to these changes. With time, the industry keeps advancing, and your online platform can respond very quickly to emerging expectations whether in terms of providing EV-specific components or satisfying increasingly digitally-savvy customers. The move to take on online parts sales today means that you are safeguarding your dealership’s future and competitiveness in years to come.
Conclusion
For General Managers looking to improve profitability, maximize operational efficiency, and ensure long-term success for their dealership, online parts sales have evolved from an option to a strategic necessity. The benefits extend far beyond the simple creation of another sales channel; they impact every aspect of your Fixed Ops department and can significantly impact your dealership’s overall success.
Now that the automotive retail sector undergoes digital transformation in each sector, including parts sales, well-positioned entities that use all these forms of technologies are going to be there, but the moment to strike is now. Keep your dealership competitive in the online sphere of life.
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