Achieving 100% fixed absorption is a must for the long-term success of your dealership—especially in the midst of plummeting vehicle profitability and growing uncertainty around the future of service. However, this goal continues to be a significant challenge for many dealerships, as the average absorption rate for U.S. dealerships sits around 60%. The solution is hiding in plain sight: your parts department. 

Parts departments in particular can create serious financial strain when managed inefficiently, leading to lost opportunities, increased costs, and decreased profitability. While sales departments have typically been viewed as the star of the dealership, the strongest armor protecting your dealership’s success is in the fixed ops department. But only if you have the tools and processes in place to reach your full revenue potential.

Let’s explore the hidden costs associated with dealership parts inefficiencies. Plus, we’ll share how modernizing your processes can boost your dealership’s profitability and customer satisfaction.

Finding Inefficiencies in the Parts Department

Operational inefficiencies have a snowball effect on dealership profitability. Here are some of the most common inefficiencies that dealerships face:

The Vital Role of the Parts Department in Fixed Operations

A well-managed parts department is key to the success of fixed operations. As Tully Williams famously said: 

This quote highlights the symbiotic relationship between the parts and service departments. When parts are efficiently handled, service operations run smoothly, leading to increased revenue through additional labor hours.

Here’s how an efficient parts department can enhance service operations:

• Reduced service delays: Quick access to the right parts ensures that service jobs can be completed on time.
• Increased technician productivity: When technicians have the necessary parts available, they can focus on completing jobs rather than waiting on parts.

Boosted dealership profitability: By optimizing parts management, dealerships can sell more labor hours, contributing to higher fixed absorption rates.

Embracing Modern Automotive eCommerce Solutions

If you’re like 95% of U.S. dealerships, you know there’s no room for error, which highlights the need to maximize the revenue impact of every department in your store. One area with a typically underutilized power source is your parts department. To tap into your parts department’s revenue potential, adding an eCommerce channel is a must. Here’s why:

Reach a Larger Market

An eCommerce platform allows your dealership to reach customers far beyond your local market. Can any of your other departments do that on a daily basis? By selling parts online, you can tap into a national (and even global) customer base, increasing sales opportunities and supersizing your dealership’s footprint.

Streamline Inventory Management

With an eCommerce platform specifically designed for dealerships, you can access the best, most accurate and up-to-date brand catalogs available. This translates to real-time inventory management which means you can sell any part at any time. When you sell parts this way, you get paid before you actually have to purchase the part. That means no financial risk and no threat of the part becoming obsolete. It also improves accuracy in tracking sales trends by providing data insights.

Enhance your Customer Experience

There’s a huge DIY market out there that values genuine parts. And those customers expect fast, easy, and transparent online shopping experiences. eCommerce enables customers to browse available parts, check prices, and place orders from anywhere, at any time. It also simplifies order tracking and communication, improving customer satisfaction.

As online sales of automotive parts and accessories are expected to grow by nearly 50% between 2024 and 2030, embracing eCommerce has never been more of a must-do.

Success Stories That Speak Volumes

Leveraging Data and Digital Tools for Better Decision-Making

To improve efficiency and profitability, dealerships should look to digital tools and data-driven decision making. Real-time data allows parts managers to track key performance metrics, make informed decisions, and continuously optimize operations. Here are some key metrics your parts department should be tracking:

• Inventory Turnover Rate: How often your inventory is sold and replaced over a certain period. A higher turnover rate suggests efficient inventory management.
• Obsolescence Percentage: The percentage of your inventory that consists of obsolete parts. A high obsolescence rate indicates poor inventory management practices and wasted resources.
• Fill Rate: How often the parts department can fill customer or service department orders without delays. A low fill rate indicates dealership parts inefficiencies in inventory management.
• Gross Profit Margin: The percentage of revenue that exceeds the cost of goods sold. A healthy gross profit margin indicates that the dealership is maintaining profitable pricing strategies and managing costs effectively. Monitoring this helps ensure that while parts are competitively priced, the dealership is still making a sufficient profit.
• Average Order Value (AOV): The average dollar amount spent each time a customer places an order. Increasing AOV can be a sign of effective upselling and cross-selling strategies, such as offering complementary products or bundling parts. 
• Backorder Rate: How often the dealership’s parts are on backorder. A high backorder rate can lead to customer dissatisfaction and lost sales. By closely monitoring this metric, parts departments can work toward optimizing stock levels and ensuring timely fulfillment.
• Customer Satisfaction Score (CSAT): This metric gauges customer satisfaction with their purchasing experience. Whether it’s based on timely delivery, the accuracy of orders, or the quality of customer service, tracking CSAT is crucial for building customer loyalty and ensuring repeat business in the competitive auto parts market.

Digital Tools for Parts Department Optimization

Inventory Management Systems:
These systems provide real-time insights into inventory levels, helping reduce the likelihood of overstocking or running out of parts.

Automated Pricing Tools:
Automating pricing adjustments based on demand and availability ensures that parts are competitively priced while maintaining profitability.

Customer Relationship Management (CRM) Platforms:
CRMs can track customer interactions and help streamline the order process.

Streamline Your Parts Operations & Boost Dealership Profitability

Dealership parts inefficiencies carry hidden costs that can quietly erode your dealership’s profitability. From lost sales and outdated inventory to customer dissatisfaction, the risks of an inefficient parts operation are significant. However, by adopting modern automotive eCommerce solutions, dealerships can transform their parts department into a powerful driver of revenue and customer loyalty.

If you fail to modernize, your dealership will continue to face unnecessary financial strain. Meanwhile, those that embrace eCommerce and optimized processes will thrive. RevolutionParts is here to help you make that transformation. Streamline your parts operations, boost dealership profitability, and ensure your long-term success by exploring the modern automotive eCommerce solutions we have to offer.

Maximize Absorption Rate and Future-Proof Your Dealership

Unlock your fixed ops revenue potential—download the Ultimate General Manager’s Roadmap to Maximize Absorption Rate for proven tips.

It’s no secret—the auto industry has been through a lot in recent years. Inflation, supply chain problems, and changing consumer expectations have left dealerships in a tough spot. Gone are the days when car sales could easily cover all the dealership’s expenses. Today, the average American only owns about nine cars in their lifetime, down from 13 a few decades back. Car owners hold onto their vehicles longer, usually around 5-7 years. With this shift, there’s a rising demand for reliable parts and consistent maintenance to keep these cars roadworthy for longer stretches. Dealerships that can pivot to meet these demands, particularly through their parts and service departments, will pull ahead. Those who don’t risk being left in the dust.

The Digital-First Consumer

Today’s buyers—especially Millennials and Gen Z—aren’t interested in spending hours at a dealership. They want digital convenience, and they want it now. In fact, nearly 60% of OEM auto parts buyers fall into these two generations, and this number is climbing. Think about that: over half of your parts-buying customers expect an online experience. For dealerships, this shift is as much an opportunity as it is a challenge. If you’re not meeting these digital-first expectations, there’s a good chance your competitors are.

Electric Vehicles:
Changing the Game for Parts and Service

Electric vehicles (EVs) bring another twist to the dealership world. They’re incredible for reducing fuel costs and emissions, but they don’t need as much traditional service. Without as many mechanical parts, EVs sidestep routine oil changes and engine repairs, which impacts revenue for dealerships relying on these services. Yet, EVs still need specialized care—like battery replacements and software updates. The rise of EVs may mean a lower volume of mechanical fixes, but it creates fresh demand for EV-specific parts and digital services, areas where innovative dealerships can thrive.

Mounting Financial Pressure and Profit Squeeze

Dealer margins on new cars are dropping fast as inventory levels bounce back. While dealers enjoyed margins close to 7% when cars were scarce, they’re now hovering around 3.2%. Front-end profit margins across dealerships are projected to slide another 10-15% from 2022 by the end of 2024, driven by mounting competition and waning demand. This is putting enormous pressure on dealerships to find alternative revenue streams fast.

Fixed Ops: The Reliable Profit Engine

This is where fixed ops comes in, providing the steady income that keeps a dealership afloat regardless of car sales trends. In fact, fixed ops has grown to cover an increasing portion of dealership expenses, jumping from 35% in 2010 to an estimated 65% by the end of 2024. With customers holding onto cars longer, they’re coming back for regular maintenance and parts, which means a constant revenue flow for dealerships savvy enough to tap into it.

So, if your dealership is serious about securing its future, boosting your absorption rate is non-negotiable. By maximizing your fixed ops revenue, especially within the parts department, you’re creating a sustainable buffer against the ups and downs of car sales.

Conclusion

To quote Wayne Gretzky, “I skate to where the puck is going to be, not where it has been.” The auto industry’s puck is already moving towards fixed ops. Dealership leaders who prioritize absorption rates now will thrive as you enter 2025.

In the end, fixed ops is about more than just revenue. It’s about building a stable future in an industry known for rapid shifts and unpredictability. By making fixed ops the powerhouse of your dealership’s strategy, you’re turning challenges into opportunities—and setting your team up for long-term success.

Maximize Absorption Rate and Future-Proof Your Dealership

Unlock your fixed ops revenue potential—download the Ultimate General Manager’s Roadmap to Maximize Absorption Rate for proven tips.

As costs continue to rise and many consumers are expressing increased sensitivity to pricing, many leaders within automotive dealerships find themselves searching 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.

Conclusion

For General Managers aiming to enhance profitability, optimize operational efficiency, and secure long-term success for their dealership, online parts sales have transitioned from an option to a strategic need. The advantages reach well beyond the mere establishment of an additional sales channel; they influence every facet of your Fixed Ops department and can profoundly affect your dealership’s overall success.

As the automotive retail sector evolves, entities who adopt digital transformation across all domains, including parts sales, will be well positioned for success. The moment to take action is now. Ensure your dealership remains competitive in the digital landscape.

Maximize Absorption Rate and Future-Proof Your Dealership

Unlock your fixed ops revenue potential—download the Ultimate General Manager’s Roadmap to Maximize Absorption Rate for proven tips.

This article was originally published in Fixed Ops Magazine, October 2024.

Today, dealerships face a pressing dilemma: How to prepare for sustainable growth as they enter a new, digital-forward automotive industry. The answer may be in transitioning from a traditional variable ops focus to a more fixed ops-oriented approach, where parts and service are empowered to drive more revenue and cover 100% of operating costs.

As consumers increasingly favor online shopping and vehicles become more sophisticated, dealers must recognize the need to replace antiquated business strategies to protect their revenue streams. The day when customers expect to buy a vehicle in a few clicks, rather than shop in person and endure the uncomfortable experience of haggling with a salesperson, has arrived. With it comes a call to arm the other side of your dealership with modern tools and a plan for profitable growth, along with a strategy to address rising operational costs. 

It’s more important than ever to maximize your dealership’s absorption rate—it’s also more attainable. There’s massive revenue potential in fixed ops that’s largely untapped. Mining this opportunity through modernization is the only way to safeguard the future of your business in an industry on the cusp of transformation. Yet, this goal remains a major challenge for many dealerships, with the average U.S. dealership absorption rate hovering at just 57%.

Challenges and Opportunities in the 2024 Automotive Market

The 2024 automotive industry is up against economic uncertainties, shrinking profit margins on new vehicles, the rapid rise of automotive technology, and a strong consumer preference for convenient shopping options. These factors are driving dealerships to rethink their traditional business models and seek new avenues for growth.

• Economic pressures: The industry is grappling with significant economic hurdles. Rising operational costs, shrinking profit margins, and intensified competition have a tightening grip on dealership profitability. To maintain financial stability, dealerships are under pressure to diversify and find new revenue streams.
• Increased digitalization: eCommerce has changed how consumers shop for everything—including automotive parts and services. Online shopping is not a convenience, but an expectation. In fact, even consumers who plan to buy in-store often browse and compare product prices online beforehand. Dealers whose parts inventory isn’t represented online may as well not exist to these shoppers.
• Rise of electric vehicles: The growing EV market is starting to have a major influence on dealership operations. As traditional part sales evolve to accommodate new technologies, dealerships must adapt to different parts requirements and service models while fighting to maintain profitability. 
• Changes in consumer behavior: Today’s consumers are tech-savvy and demand self-service shopping experiences. This means dealerships that don’t have an optimized digital presence face losing customers to competitors who are taking the needs of automotive shoppers seriously. Consumer expectations are being molded by leaders in customer experience like Amazon. If your dealership doesn’t get on board, it will be left behind.
• Industry challenges and long-term projections: Dealerships that resist modernizing will face serious challenges, like a diminishing customer base, which will accentuate the pressure of rising overhead costs. But with a forward-thinking approach and by bringing in the right tools and strategies, these obstacles can be overcome. Dealers who invest in the historically ignored and undervalued areas of the dealership will see new revenue opportunities. 

Slim margins and rising costs of a changing industry are threatening the traditional dealership’s bottom line. The focus needs to shift towards maximizing the untapped opportunities within your fixed operations, particularly in parts and accessory sales. This transition is crucial for achieving a 100% absorption rate and securing your dealership’s financial stability in years to come.

The Role of Parts eCommerce in Driving Absorption Rates

Parts eCommerce offers a great opportunity for auto dealers. Bringing parts inventory online means dealerships can tap into a national customer base and upgrade the parts department from a dark corner in the dealership to a powerful revenue generator. With online sales of automotive parts and accessories projected to grow by nearly 50% between 2024 and 2030, embracing eCommerce is a strategic necessity.

Benefits of selling OEM parts and accessories online:

• Market reach and expanded customer base: Selling parts online broadens your dealership’s visibility to nationwide parts shoppers. With a webstore and through online marketplaces like eBay and Amazon, dealerships can sell their inventory far beyond the confines of their local area.
• Gross profit and parts volume: Online parts sales may have slimmer margins than your parts counter, but the sheer volume of parts you can sell maximizes your gross profit. Plus, online platforms often include tools to optimize shipping costs, which allows you to claim another margin on shipping, further boosting profitability.
• Access to manufacturer incentives: eCommerce can unlock valuable manufacturer incentives and discounts. By integrating online sales solutions, dealerships can more easily access these benefits, leading to better margins and reduced operational costs.
• Competing with aftermarket retailers: Aftermarket retailers hold a large share of the online market, but OEM parts offer advantages they simply can’t match. As vehicle technologies advance, OEM parts stand out by delivering better performance, durability, and reliability. Now is the time to compete with aftermarket options by entering the parts eCommerce space.
• Attracting the new generation of buyers: Today’s youngest drivers have grown up in a digital world. They’re accustomed to shopping online and expect the convenience of purchasing everything, including car parts and accessories, from the comfort of their homes. An online presence for your parts department will allow you to attract this demographic and solidify your dealership’s footing in an increasingly digital marketplace.
• Modernizing the dealership: Integrating eCommerce throughout the dealership is more than just an advantage. We’re on the precipice of a meteoric shift and dealerships that drag their feet on building business strategies around new technology and consumer trends risk having to close their doors.

Strengthen Your Dealership’s Future with a Modernized Parts Department

As we enter an exciting, albeit uncertain automotive future, achieving a 100% absorption rate, and the financial security that comes with it is more critical than ever. The fastest way for dealerships to reach this goal is to invest in their parts department, a powerful but underutilized revenue generator. Retail is shifting to meet the needs of today’s shoppers and advanced auto technology. Fortune will favor those who arm their fixed operations with modern tools and embrace online parts sales. With parts eCommerce, dealerships can unlock new revenue streams and build a strong foundation for long-term growth, no matter what the future brings. Prioritizing these strategies will help dealerships secure profitability and remain competitive in a reimagined automotive industry.

As we approach 2024, the automotive industry faces unprecedented challenges and exciting opportunities. For parts dealers, the end of the year is about navigating through changes and leveraging them to fast-track revenue growth.

Where parts departments are concerned, these changes will significantly influence the availability and demand for auto parts. This raises questions for dealers on adapting and thriving in a market driven by technological advancements, environmental concerns, and shifting consumer preferences.

Preparing for upcoming industry shifts is necessary so your business doesn’t get left behind. Here are five key automotive trends that your parts department could expect in 2024.

Increased Demand for Electric Vehicle Components

One of the most significant shifts in the parts industry is the increasing demand for Electric Vehicle (EV) components. This trend is driven by the rapid growth in the popularity of EVs globally. A report by the International Energy Agency highlighted that 14% of new vehicles globally sold and 8% of all new cars sold in the United States were electric in 2022, an increase from previous years. This trend is expected to continue throughout the upcoming years.

This shift presents both a challenge and an opportunity for parts businesses, especially at the dealership level. The rise in EVs means increased demand for specific components like batteries, electric motors, and specialized electronic parts. These components are distinct from those in traditional internal combustion engine (ICE) vehicles and require specialized expertise.

For parts departments, this means expanding inventory to include EV-specific parts. Additionally, investing in training for staff to handle these new types of components is crucial. This ensures the parts department keeps up with demand and positions the dealership as a knowledgeable and reliable source of EV parts and services.

The increasing demand for EV components is not just a consumer fad; it’s a critical shift in the automotive landscape that parts departments must prepare for to stay competitive and meet the evolving needs of their customers.

Advancements in Automotive Technology

In the upcoming years, advancements in automotive technology are set to reshape the auto parts industry. The upcoming years will be marked by rapid developments in vehicle technology, changing how we interact with and maintain our vehicles.

One of the key areas of advancement is autonomous driving technology. This once-futuristic concept is quickly becoming a reality, with autonomous cars already on the road. These vehicles come equipped with advanced sensors, cameras, and artificial intelligence systems, enabling them to navigate complex traffic scenarios safely. 

A prime example of this phenomenon is Waymo, the autonomous taxi service that is now available in select U.S. cities, including Phoenix, Los Angeles, San Francisco, and Austin. 

Waymo’s autonomous capabilities are also becoming increasingly available in personal vehicles. Tesla, a pioneer in EVs, has been at the forefront of integrating advanced technologies into its cars, including the enhancement of autonomous driving capabilities. Tesla’s advanced driver-assistance system provides features like self-parking, lane centering, and traffic-aware cruise control. This system relies on sophisticated sensors, cameras, and software, setting a precedent for autonomous driving technology.

The increasing presence of autonomous vehicles on the roads is expected to make commuting safer and more efficient.

The advancements in automotive technology require parts departments to be more technologically savvy and adaptable than ever. Staying updated with these advancements and being prepared to service and supply parts for these advanced vehicles as they roll out will be key to thriving in the future.

Prolonged Use of Consumer Vehicles

A notable trend that will continue is consumers choosing to keep their vehicles for extended periods. A study by S&P Global Mobility revealed that the average age of U.S. cars and light trucks has risen to a record 12.5 years. This trend is attributed to factors such as supply constraints on dealer inventories of new vehicles and economic pressures like higher inflation and interest rates. 

These factors have influenced consumer behavior, leading to prolonged use of existing vehicles. ​The decision to extend the life of a car has significant implications for the auto parts industry.

Aging vehicles require additional maintenance and replacement parts. This trend leads to a steady demand for quality OEM parts as consumers seek to ensure their vehicles remain reliable and safe. For parts departments, this means an opportunity to cater to a market that values durability and longevity in auto parts.

The trend of consumers keeping their vehicles longer presents both a challenge and an opportunity for auto parts departments. It demands a focus on high-quality parts and expert service to meet customers’ needs, investing in the upkeep of their older vehicles.

Global Supply Chain Challenges

The impact of global supply chain challenges is expected to continue throughout 2024. These challenges are complex, ranging from the aftermath of a global pandemic to evolving environmental regulations and economic pressures.

The supply chain has been heavily impacted by the 2020 COVID pandemic, which led to factory shutdowns and port congestions. These factors have forced organizations to rethink building a resilient supply chain to thrive amidst these risks​.

In addition, labor shortages, particularly in the manufacturing sector, along with the rising cost of raw materials and freight due to inflation, are expected to continue to pose risks to supply chain management (SCM). These factors can lead to slower production, disrupted distribution, and delayed deliveries, impacting the timely availability of auto parts​.

To navigate these challenges, parts departments need to embrace digital innovations, prepare for potential disruptions from labor shortages and inflation, and adapt their strategies to maintain a steady and efficient supply chain. A proactive approach will be key to their success.

Consumer Desire for Online Shopping Experiences

It should come as no surprise that the parts industry is seeing a significant shift towards selling parts and accessories online. This evolution is driven by consumers’ growing preference for digital convenience and simplified shopping experiences. Failure to adapt to this trend will cause parts departments to fall behind the competition.

The rise of online marketplaces and the demand for quick, secure shipping are reshaping how parts are sold. Embracing parts eCommerce is no longer optional; it has become vital for growth. Selling parts online allows dealerships to expand their reach beyond their local customers, tapping into a nationwide market and increasing sales opportunities.

Digitizing the parts department involves more than just setting up an online store; it requires an integrated approach to managing inventory, processing orders, streamlining shipping, and ensuring customer satisfaction. 

The move online is essential for parts departments in 2024. It’s about leveraging technology to enhance operational efficiency, expand customer reach, and drive growth in an increasingly digital marketplace.

With RevolutionParts, your parts department can seamlessly transition into this digital future. Whether you want to sell parts on your dealership website, your dedicated parts web store, or on today’s largest marketplaces like Amazon and eBay, RevolutionParts has a solution for you. 

Our platform offers an intuitive, comprehensive solution that covers every aspect of online sales. From a user-friendly interface to advanced inventory management systems, we ensure your transition to digital is smooth and efficient.

Our integrated tools streamline order processing and provide robust shipping solutions, making it easier than ever to satisfy customer demands for quick and secure delivery. With RevolutionParts, you’re not just opening an online store but enhancing your entire sales and supply chain process.

Moreover, our platform’s analytics and reporting features give valuable insights into customer behavior and sales trends, enabling you to make informed decisions and stay ahead in the market. RevolutionParts empowers your parts department to meet and exceed customer expectations in the modern age, driving significant growth and establishing your dealership as a leader in the evolving automotive parts industry.

Revolutionizing Parts Departments in 2024

The automotive industry is gearing up for transformative change in 2024, bringing many challenges and opportunities for parts departments. From the growing demand for electric vehicle components and the advancements in automotive technology to the rising age of vehicles on the road, the industry is rapidly evolving towards digital solutions.

By embracing these emerging trends, particularly the shift towards enhanced online sales, parts departments can position themselves for success.

RevolutionParts stands as a leader in this journey, offering a robust, integrated platform that simplifies the transition to digital solutions, ensuring that parts departments are equipped to meet the demands of a changing market.

With RevolutionParts, your parts department will be well-prepared to participate in this evolution and lead and redefine the standards of success in the automotive industry.

2023 tossed a new set of hurdles at car dealers, making it a year to remember – and not just because of the supply chain challenges that lingered. This time, the mix included the ripple effects of the UAW strike and the ever-climbing inflation. But, guess what? Despite these obstacles, online part sellers remained a vital lifeline. Despite these added twists and turns, online part sellers once again saw high sales during Cyber Weekend. This begs the question: why aren’t more dealers selling online? 

The big highlight? RevolutionParts dealers made a splash during the 2023 Cyber Weekend (Black Friday – Cyber Monday). They racked up an impressive $6,533,841 in parts and accessories sales! It’s a clear sign that the online parts market is not just surviving; it’s thriving.

Cyber Weekend 2023

Brand Breakdown

As we dive into the brand specifics of 2023, it’s exciting to spotlight the standout performers of Cyber Weekend. This year, certain brands shone brighter amidst diverse challenges, showcasing their resilience and appeal to customers.

Here are the five MVPs of Cyber Weekend 2023, brands that truly made their mark in the online parts market:

Cyber Weekend 2023 Top Selling Brands

Product Breakdown

With the cost of new and used vehicles skyrocketing, more people are sticking with their current rides. The average age of cars on the road is nearing 13 years – that’s a lot of birthdays! This means folks are investing more in keeping their cars running smoothly. Here’s what they were buying most during Cyber Weekend:

Cyber Weekend 2023 GMV by Product Type

Top-selling parts:

• Air Filter
• Brake Pads Front
• Serpentine Belt
• Brake Pads Rear
• Catalytic Converter

Channel Breakdown

When it comes to where these sales are happening, a dealer’s web store remains the top dog for revenue. This is not your dealership’s website, but a separate web store dedicated to your online parts business. But don’t sleep on marketplaces like eBay and Amazon – they’re key players, too. The trick is to spread your wings and sell across multiple channels.

Cyber Weekend 2023 Sales by Channel

The success of this Cyber Weekend isn’t just a win; it’s a clear signal that this market is robust, resilient, and ripe with opportunities. RevolutionParts dealerships have shown that they’re not just participating in this market – they’re leading it, and there’s no sign of slowing down. Their achievements are paving the way for an even more dynamic and prosperous future in the online automotive world.

And guess what? 2024 is just on the horizon, bringing with it new opportunities and possibilities. If you haven’t started selling online, now is the perfect time to dive in. The online market is buzzing with energy and potential – it’s a party you don’t want to miss. So, gear up and get ready to join this exciting journey into the future of automotive parts and accessories sales. Let’s make 2024 a year to remember!

As we rev up for 2024, the automotive industry is shifting gears, embracing an era where digital convenience and operational efficiency are preferred and expected. For Parts Managers, this means more than just keeping up with the pace—it’s about setting the trend and outpacing the competition.

Moving into the new year, your mind is turning to solutions that can help you streamline operations, improve sales processes, and reach a more tech-savvy customer base. The rise of online marketplaces, the demand for quick and protected shipping, and the need for smart inventory management are just a few of the areas ripe for innovation.

While tools like RevolutionParts’ Obsolescence Tool and RP Shipping offer solutions for online sellers, they are part of a larger strategy that savvy dealers can leverage to tap into the potential of online sales.

Whether it’s through adopting specialized tools or refining your approach to eCommerce, here are some strategies your parts department can tap into for a more profitable year.

Grow Your Reach with Online Sales

The number one opportunity for 2024 is, of course, embracing parts eCommerce. That’s because the transition to online sales is no longer optional; it’s necessary for growth. Selling parts online breaks down geographical barriers, allowing dealerships to sell nationwide and cater to a broader audience, effectively increasing sales.

RevolutionParts helps dealers meet this shift towards online shopping by offering tools designed to transition traditional parts businesses into online businesses. At the forefront is creating a branded web store that serves as the digital face of your parts department.

This isn’t just a generic online storefront; it’s a fully branded, professional-looking web store that aligns with your dealership’s identity and values, providing customers with a seamless shopping experience that mirrors the trust and professionalism they expect from your brand.

Beyond the branded web store, RevolutionParts further amplifies your online presence by integrating with today’s biggest online marketplaces, Amazon and eBay. These marketplaces are where countless potential customers browse and buy daily, presenting a lucrative channel for dealerships to significantly increase their parts sales. 

RevolutionParts simplifies the process of listing your inventory on multiple selling channels, all from a single dashboard. This makes it easier to manage and fulfill orders, track shipments, and provide excellent customer service.

In essence, RevolutionParts acts as a catalyst for dealerships to expand their parts business online. With its robust platform, dealerships are equipped with the necessary tools to start selling online and thrive in the competitive digital marketplace. As we look to 2024, leveraging such digital strategies is more than just an opportunity—it’s a strategic move to ensure continuous growth and success in the ever-evolving automotive landscape.

Engaging the Millennials and Gen Z Shoppers

A recent RevolutionParts survey shows that Millennials and Gen Z are emerging as the largest group of purchasers of online parts, making up 60% of shoppers.

These groups are not just buying more online but redefining the sales landscape with their unique purchasing behavior. Having grown up with access to the internet and its exponential growth, they are more inclined to use online platforms for their automotive needs. 

To tap into this growing market, dealerships must establish a robust online presence that resonates with these younger buyers. This requires an understanding of digital marketing and online sales, the implementation of user-friendly interfaces, and the assurance of secure, efficient transactions.

By focusing on Millennials and Gen Z, dealerships can align their sales strategies with current trends and lay the groundwork for long-term customer retention. RevolutionParts provides the tools and insights necessary to capture the attention of these demographics, ensuring that dealerships remain at the forefront of the industry’s evolution.

Embracing these changes and anticipating the needs of Millennials and Gen Z consumers is not just a forward-thinking strategy—it is an indispensable adaptation to the continuous evolution of the automotive parts sector.

Tighten Operations in the Parts Department

Efficiency is the key to rebuilding operations within the department. The need to bolster productivity is crucial, particularly when faced with the common challenge of a short-staffed team. 

The goal is clear: optimize processes to enable your team to work smarter, not harder.

For Parts Managers, this is a call to innovate and enhance their departmental processes to maximize productivity, especially when faced with a reduced workforce. The mission is simple: streamline operations to empower your team to accomplish more with less strain.

To boost operational efficiency, Parts Managers can focus on:

• Streamlining workflows to ensure each team member can efficiently manage their workload despite increased demands.

• Harnessing technological solutions to fill staffing gaps and drive the department towards higher sales and customer satisfaction.

At RevolutionParts, improving operations for our dealers is a major focus. Here are some key technological solutions we offer dealers selling through the RP Platform:

Obsolescence Tool: Helps manage inventory by preventing overstocking and reducing the risk of high parts obsolescence rates, thus saving costs and warehouse space.

RP Shipping: Optimizes the shipping process with shipping protection, lower carrier rates, and the ability to source and deliver parts locally through Same-Day Delivery.

By implementing these solutions, your department can offer services that meet the immediate needs of modern consumers, such as instilling customer confidence and ensuring timely and hassle-free delivery of parts. Embracing these innovations is not just about preparing for 2024; it’s about future-proofing your business in a rapidly evolving industry.

Transitioning Away from Parts Forms

In 2024, traditional parts request forms on dealership websites are becoming a relic of the past. These forms, which require manual entry and often lead to delays in response time, no longer align with the modern consumer’s immediate needs and expectations. The parts industry is rapidly moving towards more dynamic, user-friendly online experiences.

Traditional parts forms can be a setback rather than an asset for your parts department. Parts shoppers have to wait for a response, which can take hours to days, and this lag can be the deciding factor between a completed sale and a lost opportunity. Dealerships can’t afford such inefficiencies.

The alternative? A robust transition to listing parts directly on the dealership website for instant access and purchase. This approach aligns with the convenience online shoppers seek, allowing them to browse, get a quote, and order parts at any time of the day, any day of the year. It’s an open door to your inventory, without the need for phone calls or in-person visits that can be challenging for busy customers.

By leveraging platforms like RevolutionParts, dealerships can easily list their entire inventory online with our Website Plugin, streamlining the process from listing to sale. The platform is designed to handle the intricacies of automotive parts sales, including fitment data and cataloging, so customers can find the exact parts they need quickly and without hassle. This level of convenience enhances the customer experience and boosts the likelihood of repeat business.

• 24/7/365 Shopping: Customers can access your inventory round the clock, fitting their shopping into their busy schedules.

• Instant Quotes: By listing your parts online, parts shoppers get instant pricing, removing barriers to purchase.

• Convenience: The ease of finding and ordering parts online meets modern expectations for efficiency and service.

• Operational Efficiency: Dealerships can reduce the workload on parts department staff, freeing them up for more complex tasks.

In embracing these changes, dealerships not only meet the current standards of eCommerce but also position themselves at the forefront of the automotive parts industry, ready to capitalize on the increasing move to online sales. Transitioning away from traditional parts request forms to a more dynamic, integrated online presence is not just a step forward—it’s a leap into the future of automotive parts retailing.

Use Technology to Offload Obsolescence

Obsolescence within parts departments has long been a pressing issue, with many departments bearing an average obsolescence rate hovering around the 30% mark—far from the optimal goal of under 2%. As we progress, the automotive industry is presented with innovative solutions to this ongoing challenge.

2023 has seen a pivotal change in how parts departments tackle obsolescence. To significantly lower obsolescence rates, leveraging the power of online marketplaces like eBay Motors has become a strategic move. Recognized as one of today’s largest online marketplaces for automotive parts, eBay Motors operates at an impressive rate, with three parts sold every second, turning what was once considered obsolete into highly sought-after items.

To streamline the process of converting obsolete inventory into sales, RevolutionParts offers a tool specifically designed to target obsolescence. The Obsolescence Tool enables parts managers to identify aging stock and set custom pricing strategies. Its seamless integration with eBay Motors and other selling channels makes it even more powerful, allowing for easy access to a massive online customer base.

The RevolutionParts Obsolescence Tool and our integration with eBay Motors offer a dual advantage: they help parts departments reduce their obsolescence rate while tapping into a new revenue stream. It’s a testament to the potential of combining targeted software solutions with the expansive reach of online sales platforms. As a result, parts departments can now address obsolescence more effectively than ever, paving the way for healthier inventory levels and a more robust bottom line as we approach 2024.

Strategic Digital Marketing For the Parts Department

The necessity of digital marketing in driving parts sales cannot be overstated. Your parts department can enhance its visibility through targeted campaigns, SEO-optimized content, and social media engagement. It’s not just about being seen; it’s about being seen by the right people at the right time. 

Implementing marketing can be the difference between failure and success for your online parts business.

It is so important, which is why RevolutionParts offers services from its own in-house marketing agency. Dealers who take advantage of RevolutionParts’ marketing services have witnessed major results with substantial increases in website traffic, higher conversion rates, and significant returns on investment.

Success stories abound of parts departments that have doubled or even tripled their online sales, attributing their success to the strategic marketing services provided by RevolutionParts.

Effective marketing is not a luxury—it’s a necessity. As we look to the future, the message is clear: embracing digital marketing is not just about keeping up; it’s about taking the lead. With RevolutionParts, your department can harness the full potential of digital marketing to carve out a dominant position in the online marketplace.

Bottom Line

By tapping into the digital savviness of Millennials and Gen Z, revolutionizing traditional sales processes, and leveraging technology to combat obsolescence, dealerships are set to not just navigate but thrive in the evolving landscape of automotive parts retail.

This transformation extends beyond adopting new tools; it requires a cultural shift within the parts department to prioritize innovation, customer satisfaction, and proactive market engagement. 

Looking ahead to 2024, the automotive parts sector is poised to redefine excellence, powered by technology and propelled by visionary leadership. With RevolutionParts, your parts department can take on these opportunities to build a more successful year. Click the button below to schedule a time to talk with one of our parts eCommerce experts.

With many industry leaders concerned about the potential state of the economy going further into the year, dealerships need to find ways to secure their success now before further economic threats arise. 

While traditionally, the automotive industry is among the hardest hit when the economy becomes unstable parts sales tend to endure. 

This is largely because when the economy is unstable, consumers try to hold onto their money and not make any large purchases. This means they do not buy cars but instead hold onto the ones they have, opting to maintain and repair them.

Today, circumstances are a bit different for the dealership and its consumers. If a recession were to hit, dealers would realize that vehicle sales alone may not be enough to keep them afloat. With the average price of cars higher than ever and rising interest, consumers are already having difficulty making such a large purchase.

Automotive dealers must plan ahead and seek steady growth opportunities to keep their businesses running smoothly should a recession hit. Here are five strategies to implement at the dealership to secure your dealership’s sales even during economic hardships.

Diversify Sales Channels

Focusing all your efforts on one revenue stream isn’t an effective sales strategy. Today’s retailers sell across multiple selling channels to maximize their revenue potential, so your dealership needs to do the same. 

Given the high vehicle prices and interest rates, purchasing a new vehicle has become a challenge for many consumers; if a recession hits, this challenge will only intensify. However, one thing these consumers can still buy from you – something they’ll need more of – is replacement parts.

Sell Online to Parts Buyers 

The best ways to reach these customers are through a dedicated parts web store and online marketplaces like Amazon and eBay. When a replacement part is needed to keep a vehicle running, most DIY-ers begin their search online.

By diversifying your sales channels and taking your business online, you can reach a broader base of parts shoppers looking to repair their vehicles. Without an intuitive, user-friendly website that allows customers to find and purchase auto parts quickly, dealers risk losing customers to competitors. To combat this, dealers need to invest in a robust eCommerce strategy for the parts department.

They can do this by:

1. Utilizing a user-friendly eCommerce platform and establishing a web store.
2. Optimizing your parts web store for search engine visibility.
3. Engaging with customers through social media, email, and direct email.

Expand (B2B) Sales

Taking your business online is an effective direct-to-consumer (D2C) sales strategy. However, your dealership isn’t solely a D2C business model. The most successful dealers focus on developing an effective business-to-business (B2B) customer base.

With the average age of vehicles on the road today being 12.5 years and increasing, these vehicles are more often taken to local repair shops than to dealerships. While selling parts online can help capture business from these customers, many of them will still go to a repair shop. But this doesn’t mean you have to lose business from that customer, as those repair shops also need parts to make their repairs.

Expanding your B2B relationships with wholesale customers gives you key advantages. It helps you secure a more consistent revenue stream. It increases your visibility within your local area and helps your dealership build brand credibility. All of which can help contribute to your sales goals.

What areas should your parts department focus on when developing quality relationships with wholesale customers?

1. Form strategic partnerships with local repair shops and garages. Choose ones in your area that have the best reputation. 
2. Offer volume discounts and incentives for recurring customers. This helps incentivize them to become repeat customers and improve retention rates. 
3. Implement a dedicated B2B sales team. Your parts department might have more daily interaction with D2C customers. Still, developing sales tactics specifically for B2B customers is important. This helps lend more credibility to your dealership. 
4. Implement the RevolutionParts plugin on your dealership website to make it easy for your wholesale customers to get a quote, check availability, and order the parts they need.

Enhance Your Customer Experience

It pays to know how your customers engage with your dealership in-store and online. If customers aren’t leaving with a positive buying experience, they won’t return to your dealership. 

Enhancing your customer experience depends on a few key factors: reliable customer data, effective customer retention programs, and a keen eye for market trends.

What strategies should you implement or revise to reflect these factors?

Offer Customized Promotions and Discounts

Provide targeted promotional offers based on customer data. If you have a large customer base that spends a certain amount of money on trending parts, tailor your sales strategies to meet the demands of those customers. An example of this could be to offer them a 35% discount on their next parts order over $60. This will help you determine what offers resonate best with your customers. 

Create loyalty programs to encourage repeat business. Customer loyalty programs are aimed at nurturing customers into repeat buyers. Offering the right incentives within a loyalty program is key to increasing customer retention. Get feedback from your customers on what offers speak to them. 

Offer financing options for more expensive parts. This has become especially popular within the online retail market.

Offering payment plans for more expensive parts can drive more business than you think. Certain online payment platforms (i.e., PayPal) offer integrations with businesses that allow customers to pay in smaller installments over a certain period of time. It helps them budget more effectively and saves them money over time.

Improve Inventory Management and Cost Control

To be able to grow or maintain your dealership’s business during a recession, you need to have enough products to sell. Managing your parts inventory is crucial to staying competitive even during an economic downturn. 

Optimize Inventory Levels

To effectively manage your inventory, your processes need to be effective. Ensure that your current inventory is being cataloged and tagged correctly. Missing, inaccurate, and other information errors can often fly under the radar. Double and triple-check your current inventory before you consider putting in a parts order request. 

Regularly review and adjust stock levels based on demand. You can do this by using your system data analytics to forecast what parts have the highest demand based on your current customer base. From there, you can forecast future sales trends and stock up on parts with a quick sales turnaround. This will help you reduce obsolescence that may further tie up cash and lead to overhead costs behind the parts counter.

Reduce Costs Through Strategic Purchasing

Overhead costs on parts orders are one of the biggest problems in the parts department. Bulk orders of parts that don’t sell quickly or don’t sell at all tie up cash that could be used elsewhere. To combat this problem, dealers need to utilize a few key strategies.

Negotiate with suppliers for better prices and payment terms. The right supplier source can be the best option for the dealership. They can get you discounted prices on parts orders, solidify payment options, and more. If you find a supplier you like that’s a bit outside of your budget, negotiate with them to get the best deal for your business. 

Explore alternative suppliers to minimize supply chain disruptions. With a large concentration of competitors in your market, sometimes going to the tried-and-true auto parts suppliers isn’t an option. Look for alternative suppliers within and outside of your area to see where you can get the best deal for the same standard. 

Successful businesses make adjustments where they need to maintain a steady supply.

Monitor and Adapt to Market Changes

Whenever a major economic change occurs, the retail market adapts to meet shifts in buyer behavior, regulatory requirements, and consumer values. Staying up-to-date on market changes is essential to maintaining your dealership’s sales growth.

Stay informed on industry trends and economic indicators.

Where is the market shifting? How are consumers getting to eCommerce platforms? What content tactics are they engaging with the most? Understanding this data can help you better tailor your strategies to acquire and nurture customers of varying types. 

Regularly review sales performance and adjust strategies accordingly. What are the successful aspects of your current sales strategy? Where can you make improvements? Once you identify the weak links, you can better identify where your strategy falls short in delivering on those areas.

Maintain flexibility and adapt to changing market conditions. Change your business model where you can to maintain momentum as the market changes. Allocate budget and resources to implement new tools and tactics that will help you maintain steady sales growth.

Start with smaller changes that can be easily implemented into your daily processes before moving on to larger ones. This will help you effectively scale your business growth.

Take The Reins and Drive Success

The looming economic fluctuations don’t have to spell uncertainty for your dealership. By taking a proactive approach and strategically diversifying your sales channels, enhancing your customer experience, managing your inventory effectively, and staying adaptive to market changes, you can secure your dealership’s success against the tide of economic hardships.

Change is an inevitable part of the business landscape. The dealerships that stay flexible, keep their fingers on the pulse of the market and are ready to innovate and adapt will be the ones that ride out any storm and thrive on the other side.

Don’t wait for the storm to hit. Start implementing these strategies today and set your dealership on the path of resilience and growth, ready to navigate any economic conditions that may arise.

If you are interested in more insights into market changes for automotive eCommerce, check out our 2022 eCommerce Year in Review Report for 2022 review. This report will help you understand how the market is already changing.

Online shoppers have different wants and needs than the customers you’re used to dealing with at your dealership. There’s a reason they’re shopping online rather than in-store, after all.

Once you’re tuned into these key differences, you can cater to their desires, foster brand loyalty, and increase revenue. So let’s get started!

3  Similarities Between Shoppers

#1 They Expect Good Customer Service

Customer service shouldn’t be anything “special”… after all, it’s just common courtesy to treat a fellow human being with respect.

Many dealerships will ignore phone calls or wait days before answering emails from online shoppers. Would you ignore a customer at the parts counter for hours before answering their question?

Be kind to your online customers, just like you are to the ones at the counter. Just because you can’t see them face-to-face doesn’t mean an online shopper is worth less.

You don’t have to reply to emails the minute they hit your inbox. Online customers know that email is slower than a face-to-face conversation, but you should honestly attempt to answer all inquiries within one business day.

At the same time, the faster you reply to questions, the more likely you’ll get the sale. If you make an online shopper wait too long, they’ll probably take their question to one of your online parts competitors.

#2 They Don’t Like Paying For Shipping

Shipping costs are one of those necessary evils when selling online. Online shoppers know that not everyone can offer free shipping as Amazon does, but that doesn’t mean they like it.

Online part and accessory shoppers know that free shipping is rare for auto parts. Parts are often heavy, oversized, and odd-shaped… which raises the cost.

RELATED: 8 Tricks to Avoid Overpaying for Shipping

You don’t have to offer free shipping on your parts website, but it’s a powerful coupon you can offer customers to increase sales.

Try one of these promotions:

• Free shipping on any order over $150
• 50% off shipping during a holiday sale

#3 Shoppers Like a Good Sale

Who doesn’t like getting things at a discount?

Jump on any excuse you can find to discount your parts and accessories. Holidays, seasons, and random flash sales are all open season.

What type of coupon is best? That depends.

Free or discounted shipping is always a great go-to option. Another choice is to offer a straight discount, like 10% off or $10 off any order of $50 or more.

You can also make the discount specific to whatever your sale is. For example, if you’re running a “winter sales” promotion, try making all winter parts and accessories 15% off (while the rest of your inventory stays at a normal price).

Here are ways to promote:

• Promotional emails
• Packaging inserts
• Facebook and Twitter promos
• Automotive forums

3 Major Differences Between Shoppers

#1 Online Shoppers Are Willing to Wait for a Better Price

Online parts shoppers are savvy enough to find the best price. They’re willing to wait for it, too!

According to UPS’s “What’s Driving the Automotive Parts Online Shopper” study, 83% of customers compare prices before purchasing. Price matters. They’re also savvy enough to compare online prices with only a few clicks of their mouse, so you need to have competitive pricing.

They’re shopping online for price and convenience, not necessarily speed. Rather than drive to their local dealership to buy immediately, these customers are willing to wait a week or more for their purchase. Plus, they’ll wait even longer if it means free shipping!

What does this mean for your parts department?

Don’t be afraid to price comparatively! Selling parts online doesn’t mean you lose out because of smaller margins; it means you make gains due to more volume. Selling parts online is a volume game.

Take a look at this pricing matrix:

#2 They Expect a Quality Online Experience

Online shopping has become part of the typical shopping experience for most people, and consumers have come to expect a very specific experience.

⭐ They want a clean, easy-to-navigate website.

⭐ They want an easy and accurate way to find the parts that fit their vehicle.

⭐ They want a website that is suited for both mobile phones and tablets.

Easy, easy, easy!

If they get frustrated by the design of your parts eCommerce store, they’ll buy from somewhere else.

Website design is usually out of your hands as a Parts Manager, so make sure your parts eCommerce solution can offer all the following:

• A professional, visually appealing website that is easy to navigate and understand
• Multiple ways to search and VIN-decoding capability
• A straightforward checkout process, with real-time calculated tax and shipping cost
• Responsive/mobile-friendly website design

#3 They Research More and Return Less

We’ve already mentioned how important comparison shopping is to online buyers. These customers are willing to wait for a lower price, but they don’t want to wait a week for the wrong part to arrive. They want to get it right the first time.

Online automotive shoppers are typically the type that knows what they want. That is, they’re somewhat familiar with the car market, and they know which piece they’re looking for.

Only 27% of online automotive shoppers claimed to have returned an item bought online, compared to 62% of general online shoppers. 

The stats make it clear: These shoppers do their research. They know how complicated fitment can be, and they want to get it right.

This makes buyer confidence a top priority. Help them find the right part and ease their fears about getting something wrong.

How to Improve Buyer Confidence

• How to Set Up Your Return Policy and Reduce Returns
• The 3-Point Guide to Creating the Perfect Shipping Policy
• 6 Return-Handling Mistakes Eating into Your Profit Margins

Elevate Your Sales Game and Fast-Track Online Success

Understanding the unique preferences of online shoppers is crucial for your parts department’s success online. Every detail counts in cultivating loyalty and boosting online sales, from personalized customer service to strategic sales promotions. The journey from insight to action begins with recognizing these key differences and leveraging them to your advantage.

Ready to elevate your online sales strategy? Download our guide, “The 8 Keys to Successfully Selling OEM Parts Online,” for expert insights and actionable strategies to thrive in the online marketplace. Transform your approach today and unlock the full potential of your digital sales.

Moving into 2023, there will be many challenges and opportunities for dealers, and it’s imperative that dealerships prepare themselves. 

This is especially true for the parts department, as many of these trends directly affect the cost and supply of auto parts, leading dealers to question what they can do to help maintain steady auto parts sales. 

Here are five predicted automotive trends that your parts department should expect in 2023.

Get Your Parts Department Ready for 2023

2022 is almost over, and now is the time to set your parts department up for a successful new year. Get your parts department online with RevolutionParts to make the most of next year’s trends and opportunities. 

Schedule a demo today and learn how RevolutionParts can help your parts department generate more revenue in 2023.