Automotive News Canada - August 2019 - F10

TAKING ON

AMAZON

Industry leader dominates online parts sales, but dealers still have advantages
foj@autonews.com

n 2019, more than $12 billion
worth of auto parts and accessories are expected to be sold online
in the U.S. - twice the volume of
just four years ago. That explosive
growth might have given new-vehicle dealerships a massive opportunity to expand their parts business on their websites.
Except Amazon largely beat them to it.
The e-commerce behemoth is likely to capture nearly two-thirds of the online parts market this year, estimates Hedges & Co., a digital
marketing agency in Hudson, Ohio. Amazon's
share of the market has risen even more rapidly
than online parts sales overall, says Jon Hedges,
founder of the company that bears his name.
It's not too late for dealerships to build a lucrative online parts operation independent of
or working with Amazon, says Hedges, who
has an extensive aftermarket background.
Among their advantages: ready access to a
wide array of original equipment parts, warranty protection offered by automakers, the
technical expertise of dealership parts staffs,
and dealerships' own credible brand.

In the market
About two-thirds of parts bought on Amazon
are sold by the company and provided directly
through its warehouses and suppliers. The rest
are sold on Amazon Marketplace - third-party sellers, including dealerships, that operate
"stores" on the Amazon platform for a fee.
James Windrow, vice president of marketing
at RevolutionParts Inc., a Phoenix company

PAGE 10

AUGUST 2019

Digital derby

Amazon's share of the U.S. online parts market has increased even more rapidly in recent
years than online parts sales overall. Figures in millions.
Amazon
Online new parts and accessories, excluding auctions

"
* Projected

Source: Hedges & Co.

"Parts managers know that
there's a significant volume
of sales taking place on
Amazon. But not a lot of
dealers are selling there
because of the percentages
that Amazon takes."

ALEX KWANTEN

JAMES WINDROW, vice president of
marketing, RevolutionParts

that provides dealerships with software for
online parts sales, estimates that Amazon
takes a 10 percent cut of revenue from tireand-wheel sales on Amazon Marketplace and
12 percent for everything else.
"Parts managers know that there's a significant volume of sales taking place on Amazon,"

Windrow says. "But not a lot of dealers are
selling there because of the percentages that
Amazon takes."
Hedges estimates that 10 to15 percent of U.S.
franchised dealerships sell on Amazon Marketplace and says that share is likely to grow.
"As more sellers become involved in Amazon Marketplace," Hedges says, "we think [the
annual total of parts sold by third parties on
Marketplace] might be close to $4 billion."
Amazon did not confirm these estimates.
Adam Goetsch, the company's automotive director, told Fixed Ops Journal in an email interview that Amazon "engages with a broad
mix of manufacturers and selling partners to
carry the most complete selection possible
and allow seldomly ordered parts to be accessible to customers."
Hedges says it appears that Amazon is shifting the mixture of the parts it sells, focusing its
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Automotive News Canada - August 2019

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