….for Jobbers, Distributors and Repair Shops
The US aftermarket auto parts distribution industry suffers from undifferentiated service offerings, ineffective customer engagement practices and product return rates of over 20%. The industry has yet to meaningfully benefit from IT-enabled efficiencies in parts ordering and fulfillment that are commonplace in other market sectors.
Each day, 1,600 aftermarket auto parts distributors fiercely compete with one another to sell and deliver hundreds of thousands of parts to commercial service facilities. 90% of the orders for these parts are placed over the phone using methods that are rife with inefficiencies.
- Technicians commonly describe a vehicle to distributors over the phone using “year, make and model”, which leads to frequent errors. The 17-character Vehicle Identification Number (VIN), which would provide more accuracy, is hard to transcribe and read over the phone.
- Distributors regularly send out multiple variations of a part in an attempt to ensure that one will be correct. The rest are returned for credit which increases logistics burdens and inventory levels.
- With stiff competition and poor differentiation, distributors may take back products they didn’t even sell, in an effort to achieve more customer loyalty. These practices suffice for “customer engagement” in an environment where there are few other options.
While the automotive aftermarket has proven to be stable and recession-resistant, efficient competitors like WorldPac and Amazon are beginning to steal market share. In response to this threat and others, distributors must greatly increase the efficiency of their core rapid-delivery business.
More Information: For Jobbers and Distributors For Repair Shops