Auto Parts Aftermarket Online, e-Commerce and all that PART 2: What are my options?

Reprinted from Undercar Review magazine – June 2014 issue 

By Jim Gurieff of PARts Australia www.partsdb.com.au

Part 1 of this article appeared in the April 2014 issue of Undercar Review. In part 2 we follow on with this topic and look at the “how” and “what” side assuming we now have an answer to “why should I care”. That is, assuming online and e-commerce is important to me, what are my options and how can I deploy them?

So assuming that we’re talking about solutions and strategies using open solutions and standards, the following are some typical questions and answers to help guide you to the right decision for your business.

The reason why open standards are mentioned is that the last thing you should be doing is looking at custom data or technology solutions that leave you with something unique. Imagine building your own accounting software, word processor or worst still, creating your own vehicle table that you had to maintain?

Who is my customer – B2B, B2C or both?
Business to business (B2B) means selling to others in the industry like a reseller store, workshop or garage. Business to consumer (B2C) is essentially retail so think about who you want to target and find the right solution for each or both. Remember, a business will often start with B2B and then want to expand to B2C.

 

AFI PARts B2

An effective B2B site needs lots of information and options for trade customers.

What are my business goals or expectations for this project?
You wouldn’t launch a new service or product without some clear goals and sales expectations and you shouldn’t build an e-commerce solution without some goals and expectations of potential sales.

With that you can develop a realistic budget based on an acceptable return on investment projection. It will cost money and the cost will be proportionate to the goals and targets. See more below about time and resources.

Do I have the time and resources I need?
Just because Google doesn’t charge you to search and you can read a newspaper online for free (for the moment), don’t think that building an online e-commerce store is free or cheap. People think that because its digital or online, web stores or web sites are cheap.

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Yes they are a lot cheaper to build and fit out than a physical bricks-and-mortar store but you can’t expect to build any new business channel, sales division or strategy without a realistic investment. Technology and systems cost money and the more “robotic” (not requiring human input) they are the dearer the initial setup cost.

It also takes time to build and deploy a successful online or e-commerce strategy just like any new sales channel, product or service.

Do I have the staff I need?
Building something that works for your business also takes some love and attention. You need someone that believes in the project to take ownership and to nurture and maintain it ongoing. Remember that a successful web store or e-commerce site is akin to a successful shop front or merchandising store which means a good merchant in charge. Be realistic and make sure you have that person or persons before you start,that they understand the technology, “get” the goals and are supported by the business.

Do I need to sell on eBay or Amazon?
Amazon is not offering online sales in Australia yet (apart from Kindle and niche items) but they will arrive eventually. Note that apart from tyre outlets, one of the biggest sellers of car tyres in the US is Amazon.

Meanwhile, eBay is already here and their Parts and Accessories marketplace is now in the top 3 sales channels for aftermarket retail sales.

If you need to sell to retail or B2C you need to consider these channels in your decision making and technology choices. Suppliers who want to maximise retail sales of their brands need to make sure their product and fitment data is optimised and available for your B2C reseller or retailer customers.

What are the key elements?
Data, technology and merchandising are 3 main element groups.

  1. Data means anything from product information, catalogue or fitment, images and video links to inventory and pricing data from your own systems. Fundamentally you need to be able to acquire, store and link product data to pricing and inventory data to sell the product successfully.
  2. Technology is about the data management and delivery tool. This would involve your ERP or point-of-sale system, a web site, an e-commerce store or web shop as well as any integration tools to link the data together or process payments. It’s a big area but getting the previous points clear in your head first will make it easier to get the right technology.
  3. Merchandising is THE most important element ongoing and is often the difference between adequate and acceptable sales performance. This includes presentation of the product, data, range, pricing, stocking policies but also promotions, SEO (search engine optimisation) and even copywriting. A good digital “merchant” is just as important as a good shopkeeper.

What data do I need?
Product or fitment data is the key thing. Our industry is a complex one and the product data requirements are amongst the most complex around. It’s not just about finding the right part for low cost of sales but also making sure it fits and doesn’t injure someone.

The right product data solution needs to do the job of a parts interpreter and using industry standards or global solutions supported by the suppliers themselves is key.

The data needs to be detailed and flexible enough to be deployed where the supplier and seller need it and in the appropriate format. Many potential sources exist so think twice (or preferably not at all) about building your own.

e-Comm or e-commerce data is the other side and typically involves pricing and inventory data from the seller’s side.

It would also include freight rates, weights and measures like dimensional data needed for shipping and could also include the suppliers own availability data for more complex solutions.

DB_Console_Monroe                               Good quality product and fitment data that’s easy to manage and distribute is critical to e-commerce

What technology should I use?
Answer – the right one. Over simplified but the truth if you’ve answered and considered the above and talked to people that work in this area about your specific needs.

Options will include subscribed product and fitment data solutions like TecDoc or ACES/PIES. Service and repair data from providers like Autodata, VIN decoding and vehicle parc data from a variety of local and global
sources.

In some cases you may need an integration solution like Flow for complex systems or multi-channel market listing tools for eBay and Amazon like Commerce Connect, Channel Advisor or Neto.

The later also have the advantage of linking to your own web store but that then also includes most of the popular web site content management systems like Joomla or Magento and the associated shopping cart or e-commerce plug-ins.

Most importantly these are known, off-the-shelf products and solutions that are all used in automotive aftermarket e-commerce.

This also includes products like PARts B2, an off-theshelf specialised B2B and B2C e-commerce engine that can be rented by the month and connected to a product and fitment database source.

However, if you feel you need to go it alone in this area, limit the custom solutions and use off the shelf for as much as you can.

What about 3PL?
Third Party Logistics is a growing service area where suppliers use dedicated warehouse and logistics providers to store, pick and pack your orders. This is a great boom for growing and emerging businesses that operate online as it removes the need for warehousing and related staff letting you concentrate on merchandising.

There are an increasing number of sellers that are also using a type of 3PL function to drop-ship orders direct from the supplier to the customer. Efficient wholesalers or suppliers love this sort of business as they can deploy many sellers to manage the sales coal-face while they get on with the job or making and or distributing product.

If I build it they will come, right?
Imagine building the world’s most comprehensive auto parts store but then locating it out the–back-of-Bourke?

No offence intended to our regional and country brothers but there aren’t that many potential customers out there to support your mega parts store let alone any passing traffic.

Building a new store in the city needs an advertising and promotion strategy to get people to come and buy and an online web store is even more demanding as every new store may as well be out in the desert without some sort of promotion and marketing.

A big physical store front at least has some presence to passers-by whereas the biggest web store in the world is invisible unless it appears in search engines, is promoted via direct mail, with advertising both online and in the real world.

Needless to say this is an oversimplification and should be used as a guide to help you get started. It may seem too complex already but with the right answers and support from the right people it’s relatively straightforward to get a solution that suits you.

Most importantly, it’s not too hard and it should be a core part of your business in the current commercial environment.

Next time we will look at a couple of specific case studies from a B2B and B2C side.