We had a great discussion with Michael King, ECommerce Performance Specialist at RevolutionParts about his experience with dealerships and parts eCommerce.

What is the origin of RevolutionParts?

Well, you know, the whole concept for me came about 20 years ago. I was working for a dealership on Cape Cod, and we got the opportunity to build a brand-new dealership. When I designed the parts room, I designed my parts office directly behind the counter so that I could hear the transactions, both on the tech side and on the retail side.

More and more, I heard a very poor buyer experience for the retail customer. They'd come in looking for something. They'd be greeted with a grumpy parts guy, which we all know doesn't exist. And you know, the first thing would be, I need your VIN number. Well, I don't have it. So they go trudge out to the parking lot, get their registration, and they come back in.

You look up the part. I don't have it in stock. It'll take two days to get. So the whole the whole concept of the retail buying experience was just not a good one. So at that point, the original equipment retailing of parts was kind of in its infancy and there was only one customer at that time who they're not around anymore because it didn't involve the times like RP does.

And I just launched the site, struggled with it a little bit, new to e-commerce. But you know one thing led to another I enhanced the customer experience, kind of refined the way that we did things, ship things, price things and you know, before you know, it, 20 years went by and, you know, the business was doing $25 million a year in sales.

Are the buyers inside or outside of the dealer's PMA?

The overwhelming majority, if you talk to anybody running an e-commerce store out of a dealership, is parts sold outside of their primary area.

For me, when I was running the store, I purposely did not advertise in my area because I didn't want to compete with myself. A body shop or a repair shop buys parts for me on the wholesale level, then I'm advertising that same part at close to the same price on a retail level. It creates friction for not only them and their customers, but the dealership in the service of customers.

I always made sure I advertised outside of my marketing area, and I'll bet you'll find if you did an analysis, you probably find 95 to 98% of the sales online are outside of the dealership's primarily market.

How do you address lower margins on eCommerce parts?

The reality of it is, do you want 10% of something or 100% of nothing? Because all of all of the online well, 99%, 98% of the online business that you do, you're never going to see that customer.

Those were unrealized sales. So by creating this extra channel, yeah, you're selling a little bit less than retail, but you know, you're increasing your volume of sales way past where they would be.

You've also got to remember, too, that when you sell it online, you're selling two items, you sell in parts and you're selling shipping. They're both a profit center. You might be selling that part to a retail customer at cost plus 10, plus 15, whatever your feelings are for that number. But also if you manage your shipping properly, you're making 20 to 30% profit margins on your shipping. So at the end of the day, you're getting basically the same money for that retail part. You're just doing it in a different fashion.

How does RevolutionParts help dealers with shipping?

You know, for years I battled with the shipping carriers, and I always had the same kind of routine with them. UPS wanted it all. FedEx wanted it all. Nobody got all of it. I always had multiple carriers just for safety's sake and for choices. But when FedEx came in and wanted more packages, well your deal has to be better. If you are a better deal, you're going to win. So it always kept the two carriers very honest about what they were giving us for rates because they knew if they tried to take advantage of us, they'd stop losing packages.

The RP platform does the same exact thing. When you bring up your order to ship it, it shows you all the available carriers that you have at your disposal. It shows you how much they're going to charge.

By using a volume approach now, we can offer big volume discounts to little stores that are just starting off. They have no sales history. So that helps them be competitive right out of the gate. You don't have to suffer through lousy shipping rates for the first year until you get your volume up. The carrier has already done it for you. You get the best USPS rates. We just launched FedEx which I think is in beta right now. We had UPS which is coming back. I was shipping a thousand packages a day which gave me huge bargaining power with the carriers. Well, now a small dealership was sending out three packages a day gets that same exact power because he's part of the RP family and the amount of packages going through the platform just gets him the best rates there are.

What are successful dealers doing?

As far as crushing it goes, nobody surprises me because it can be done. If you're diligent at your craft, anybody can be successful in doing this. One of the huge things that I see that I promote is the customer journey. The customer journey has to be perfect. Somebody sitting in their living room with their laptop buying a part wants the exact same hand-holding treatment as somebody standing in front of your retail counter. If you're if you're willing to do that, it doesn't mean giving the store away, because that absolutely is not customer service. But if you pay attention to the customer journey, then when you're doing advertising to get started and kind of building your brand as you move forward and the customer journey is your main focus, you have to buy in.

You have to spend less and less to get customer traffic because now you're building repeat customers. You've done exactly what they expected you to do: give them a great product at a great price, a reasonable timeframe, and good communication. That part of it is paramount if you want to succeed. Then the other part is just being proactive with your site, taking pictures, enhancing descriptions, things that make your store different from another store that maybe isn't going through the effort to do that. By far, the customer experience is definitely a big driver for success.

What does the average eCommerce customer look like?

Most of our customers, if you look at demographics, which I'll leave to our geniuses in our advertising agency here at RP. But demographics, it's workaday people, you know, 25 to 55, not necessarily do-it-yourselfers because not all of them are, but they get cost-conscious about where they spend their money. They want service.

They're not going to settle for being ignored when they send you an email. They're educated people and they they just want a better value. They think the last few years have been a little rough. And I think especially now more than ever, you know, it's a person that works for a living, looking for a better way to spend his money or her money and get as much as they can in return.

How do you sell OEM against aftermarket?

Well, it's not only that the grade. I mean, obviously, OEM is the preferred replacement part. You always want to use what the factory specs. But again, it goes back to that customer journey.

If you go to an aftermarket store and you buy something, how's that? If they need more information from you, how's the communication? If you need to make a return, if a package gets lost, it typically is not as personal and that's what people want. They want to be treated like a real-life customer walking in and saying, "Hey, Joe, how are you? What do you need today?" They want that same kind of experience and they don't always get it in the aftermarket world. So having great customer experience and then offering an original part at a very competitive and sometimes even less expensive, you know, that's a good combination for success.

How does Customer Success work with dealerships?

I work hand in hand with a lot of dealers, some small, some large. I'll look at the way they interact with people and then I'll just start tutoring and coaching them, saying, well, you know, this kind of response is a little bit on the empathetic side on this one here. You're getting carried away with your answers.

I just teach them how to react, because when you're a counter guy and you're dealing with technicians, service advisors, used car managers, there's not a ton of empathy that goes on in that environment. Bringing that to the table for your atypical parts guy is part of the process and just kind of educate them and show them the path to success.

I use a little store that I kind of took on as a project and taught him, and it's only a little two-person store and they had a revolution store. They were doing pretty well, you know, 15, 20,000 a month in sales. And I just took them on and said, "Listen, I'm going to kind of show you how this all supposed to happen. And if you follow what I teach, you will continue to build on it. If I find that you're not listening to me, then we'll just part of our team go our separate ways."

So we did that. We worked on customer communication, we worked on the site content, we worked on packaging and promotion, and they don't spend any more money on advertising than they did a year ago, which was only 1500 dollars a month, which in the eCommerce world is pretty modest. They still have only two people. They're still in the same-sized parts room with the same inventory. Instead of doing 15, 20 a month, they doing 100 to 120 a month and there was no investment involved other than this is how eCommerce works. This is what your customers expect. And if you kind of follow the best practices you can be as successful as you want to be.

The value of a vendor with dealer experience

It helps, you know, and I do understand even as a tech or shop owner, I understand the challenge. My dad owned his own shop. My grandfather had it before him. I got to grow up through the struggles that they had running small repair facilities and, take that 20 years or 30 years later into today's times where technology is a challenge, the cost of tools, the cost of insurance, you know, it's not an easy task for a shop owner to keep the doors open. Anything that we can do from our side to make sourcing the parts they need easier, more efficient, I see that as a big part of our future as well.

What's the future of eCommerce?

We have all kinds of really wild things going, where we're trying to bring not only original equipment parts to the masses through the platform, but we're looking at aftermarket sources. We're looking at accessories performance. We have such a great team of engineers and they're very nimble.

I always come up with these crazy ideas where I see this local shop, you know, small shop, three bays. And the only way the shop can be successful is with the shop owner under the hood. He can't afford to be in his office talking to people. My idea was, the next evolution of RevolutionParts is we integrate voice to text and artificial intelligence. So when that guy has his head under the hood, he's got a wrench in his hand. And he said, "All right, I know what's wrong with this car. I need a water pump, I need a dry belt, I need a tensioner". He just voiced, "Open revolution, insert last eight of the VIN." These are what I need for parts. Check availability, select the same-day delivery feature an hour later those parts of delivered to him by one of his local dealerships. There are all kinds of opportunities then and we're working on all of them.

eCommerce levels the playing field.

I think the one thing that I would like to emphasize is the size of the dealership, the size of the parts room means nothing. E-commerce is a level playing field.

And it's not just the U.S. I mean, it's a great big world out there. There are people all over the world who want parts and American cars find their way into every nook and cranny of the globe. You never know where a person is that wants to buy something from you.

Keep an open mind about e-commerce and be diligent about your craft. You've got to love it. I love selling parts. And you can be like that little dealership. You can be a little dealership that has a parts room that is smaller than my living room and still do a million and change. That's nothing to sneeze at. That's pretty respectable.