AutoPower is one of many software developers to offer an e-commerce solution aimed at connecting its customers with their customers - as Mike Mallory, president of AutoPower, defines it, "The transfer of a good to somebody via an online purchase."
Through the web site AutoPower developed for Frey, customers can place an order online, and the order request will automatically print out at a specific Frey location. Frey laid off three or four clerical people when they implemented the AutoPower system in 1994. Now, the computer does that work.
In 2009, 33 percent of distributors indicated they had plans to put more money into technology in the near-term, with e-commerce as a key investment area, according to an Industrial Distribution survey sponsored by Microsoft Dynamics. The survey, which polled 300 respondents, found that e-commerce was listed as "extremely" or "very" important by nearly 50 percent of those distributors surveyed.
Distributors and parts sellers
This type of purchasing technology is really catching on with the growth of the Internet, says Chuck Scahill, vice president of business development at Karmak, which also offers an e-commerce platform. He says Karmak's distributor customers see a significant boost in orders in the first six months of adopting the solution.
One distributor was making about $500 a month from one parts customer, Scahill says. After this distributor moved over to the Internet parts ordering system, it was banking on $15,000 a month in parts sales from that same customer.
"It's a snowball effect," Scahill says. "It grows on itself."
E-commerce solutions also let customers browse the distributor's entire database of inventory, not just the part they're looking for. This way, customers discover many more parts that they didn't know the seller had, allowing them to purchase more and boost the seller's revenue. "Leverage your inventory by the discovery process," says AutoPower's Mallory.
At AutoPower, last year the rate of return on investment for distributors was 200 percent over a 12- to 18-month period, Mallory says. Studies indicate that online ordering can save between 12 to 18 percent of a distributor's gross margins, he adds.
The parts ordering site also can make promotional items more visible to the customer, Mallory says. For example, during the summer, the distributor can boost advertising of AC systems, while in the winter, it can focus on selling antifreeze. In this way, e-commerce provides greater opportunities for upselling, cross-selling and gaining exposure.
E-commerce can also provide greater exposure for other types of sellers, such as salvage yards. HeavyTruckParts.net is a web site designed to connect heavy truck recyclers and customers through a searchable database containing thousands of trucks and truck parts from yards throughout the U.S. and Canada.
According to Matthew Wegener, president and CEO of ISoft Data Systems, which developed the site, the service had 74,000 matched services over a four-week period, with the average value of parts searched at over $2,000. Almost 25 percent of searches went to a detailed view of the part over the four weeks, and 15,000 of those that went to detailed views clicked on one or more parts. "That's a lot of exposure."
Manufacturers and dealers
The aftermarket industry is increasingly moving to e-commerce, including truck and parts manufacturers and dealers.
Previously, the aggregation of parts information online was only mainstream among automotive aftermarket suppliers, but it's rapidly moving in that direction in the heavy-duty market, according to Jay Wright, president of Vertical Development, which provides electronic catalog and product management solutions.
Vertical Development's ShowMeTheParts.com is an online database offering aggregate data from both automotive and light-duty manufacturers, and more recently from heavy-duty and medium-duty suppliers as well. When a user searches for a part on the web site, the system integrates directly with the supplier. When a purchase is made, the part goes into a virtual "shopping cart."
"We can get the information out there and available to those that need it in a very short time," Wright says.
Wright attributes the growth to a standard of the Automotive Aftermarket Industry Association that makes it possible for trading partners to aggregate information. This standard, called the Aftermarket Catalog Enhanced Standard, or ACES, has moved over to medium- and heavy-duty truck parts segment within the last year, he says. With ACES, suppliers can publish parts and truck data with standardized vehicle attributes, parts classifications and qualifier statements. ACES also prescribes a machine-readable format (XML) for trading partners to use in exchanging vast amounts of catalog information electronically.
There has not been a lot of exchanging of data between trading partners on the truck side of things, Wright says, but that will change with this standard and with increasing demand for this type of information-sharing.
Navistar International has jumped on the e-commerce bandwagon, with its web site featuring aftermarket parts from its PartSmart line. The company says it's the first heavy-duty truck and bus manufacturer to sell all-makes parts online via an e-commerce solution. In phase one of its launch, Navistar has made the system available in the U.S. Eventually, the company hopes to expand the product to Canada and the rest of the world.
According to Kathy Seegebrecht, vice president of marketing and brand, dealers don't have the infrastructure and the resources needed to develop such an online ordering system. Navistar rolled out the solution as a way to reach new customers that don't buy from dealers right now, Seegebrecht says. This includes Internet-savvy or remotely located customers. The web site is aimed at owner-operator and smaller fleets, rather than larger fleets.
"This is the customer who may not regularly patronize a dealership for service, but has the knowledge and ability to know what parts are needed and how to install them," says Nate Jolliff, director of parts operations integration for Navistar. "We're connecting the customer with their local International and IC Bus dealer through a seamless online ordering system."
Navistar conducted research before launching the service and found that just over 40 percent of customers are ordering parts online, with more than 20 percent indicating that it was their preferred method of ordering.
To use the system, users go onto the web site, www.partsmartparts.com, and can search by part number, description, make or model. When a part is ordered, it routes to the nearest dealer based on the purchaser's zip code and the shipping address. The specific dealer gets the order at its office, and ships the part to the purchaser. "It's as easy as Amazon," Seegebrecht says.
An e-commerce platform offers benefits for your customers as well as for your business, says Jeff Paul, director of marketing at Vipar Heavy Duty. Vipar uses two e-commerce platforms, v-Enterprise and ProNet Marketplace.
The v-Enterprise system makes it easy to exchange common order information, such as purchase orders and invoices, electronically. It streamlines the ordering/invoicing process between Vipar Heavy Duty distributors and suppliers. It also supports Vipar's National Accounts programs by facilitating the order