Quantcast
Jump to content
  • Welcome to Auto Parts Forum

    Whether you are a veteran automotive parts guru or just someone looking for some quick auto parts advice, register today and start a new topic in our forum. Registration is free and you can even sign up with social network platforms such as Facebook, Twitter, Google, and LinkedIn. 

     

Here's one market Amazon can't easily crack: Car parts


Recommended Posts

New York (CNN Business)Amazon is gunning to sell more car parts. But it will run up against fierce resistance from a small army of firmly established companies already doing just that.

One of them is Advance Auto Parts. Advance has designed a vast logistics network to deliver parts to auto mechanics and do-it-yourself car owners right away.
"Independent garages have got to get that car fixed as fast as possible, or you're not going to them again," said Charlie O'Shea, lead retail analyst at Moody's. "They measure delivery times in hours and minutes, not days."
Speed isn't the only factor separating Advance (AAP), AutoZone (AZO) and O'Reilly (ORLY) from Amazon (AMZN). These companies have sharpened their focus on service, helping guide customers through repairs and the technical auto parts market.
 
 
Wall Street believes in the companies' long-term durability: Advance and O'Reilly's stocks have outpaced Amazon's this year.
 

Amazon's moves into car parts

But Amazon looms. The company started the Amazon Automotive store in 2006 and has been adding services ever since.
"Amazon's auto-part retail business is becoming too big to ignore," MoffettNathanson analyst Greg Melich said in a report last month.
 
It has recently accelerated efforts to sell car tires, batteries and accessories.
The company struck a partnership with Sears that allows customers to buy Sears tires from Amazon and get them shipped to Sears Auto Centers around the country for installation.
Amazon expanded a tie-up with Pep Boys earlier this month for a similar service at 1,000 of Pep Boys' stores. Amazon also has an agreement with Monro Muffler Brake.
"We're pleased with the customer response to our Ship-To-Store offering," Amazon's director of automotive Adam Goetsch told CNN Business.
 
Amazon is adding more brands to its website and trying to get customers familiar with buying parts online. During the Black Friday and Cyber Monday stretch Amazon promoted car battery jump starters and wiper blades for the first time. They're 30% off until December 1.
Goetsch said the most popular automotive products among Amazon customers this holiday season included jump starters, wiper blades, cleanings kits, and RV accessories. That makes sense because more DIY customers are shopping online for components and accessories that they don't immediately need to repair their cars.
Amazon may want to sell more hard parts, like engines, crankshafts and flywheels.
Online sales of components like brakes and fuel systems grew 29% in the past year, according to data from NPD Group and Rakuten Intelligence.
"These categories have historically been challenging for the typical consumer to shop online for, but this task is getting easier," NPD analyst Nathan Shipley said in a report.
But those hard parts sales remain in Advance's wheelhouse.

Lightning-fast delivery

Advance may seem like an unlikely company to thrive in the digital era, but the old-school car shop has taken steps to prepare for Amazon's encroachment.
Advance has close to 6,400 stores — some of them under banners like Carquest and Worldpac — and 54 distribution centers that put them close enough to its customers to make same-day or next-day delivery a snap. It has also built larger "hub" stores in higher-traffic markets that keep more items in stock.
The company makes around 58% of its sales to technicians at garages, service stations and auto dealers, who often don't know what parts they'll need until the day begins. Rapid delivery is critical.
Advance Auto Parts has bult out a rapid logistics network to meet customers' parts needs.
 
Advance Auto Parts has bult out a rapid logistics network to meet customers' parts needs.
"There's a huge need for inventory availability and quick delivery out there," said Seth Basham, who covers the industry at Wedbush Securities.
Although Amazon is looking to find retail partners, it would need to acquire an auto parts seller with similar distribution capabilities to be able to match Advance's same-day network.
"You're not going to use Whole Foods to deliver auto parts to a garage. A brick-and-mortar presence is critical here," O'Shea said.

Auto parts experts

Advance offers expert solutions in a complex auto parts market, something Amazon can't provide.
Staffers consult with customers to find the right products, and Advance offers training classes and posts on YouTube to help DIYers with repair jobs.
Amazon is known for its variety, but Advance sells a wider range of national brands, private-labels, and original equipment from manufacturers.
"The garage owners love this model," O'Shea said. "You need somebody that has deep knowledge and knows the parts catalog backwards and forwards."
Adding to its advantage, Advance has close relationships with auto parts suppliers. Many manufacturers are wary of selling through Amazon because they worry that it would help the company learn the business and one day take it over.
 
Analysts say carrying hundreds of thousands of different parts is ill-suited to a company without deep experience in the field. Amazon might have trouble stocking and selling bulky physical components and batteries — new engines, brakes, and exhausts — which are specific to a car's make and model. On the other hand, selling car parts and batteries make up 65% of Advance's total sales.
But the company will need to keep adjusting its prices to keep up with Amazon's relentless focus on providing value.
A MoffettNathanson analysis found that Amazon's prices were 29% lower than traditional competitors on 30 top-selling items. Advance risks losing its edge with such a wide pricing gap.

A new Walmart deal

But Advance should get a lift from its newest partner: Walmart (WMT).
Advance struck a deal last month with the world's largest retailer for a specialty store page on Walmart's website. It believes the tie-up will allow it to increase its visibility online and reach more DIYers.
Advance may see selling through Walmart as safer ground than Amazon. "I don't know that Walmart wants to start manufacturing auto parts," O'Shea said.
The Walmart partnership is key because it will bring Advance into Walmart's 2,500 auto care centers around the country. Leveraging Walmart's store footprint will help Advance expand same-day delivery as competition intensifies and Amazon finds ways to speed up parts delivery.
"The biggest challenge Advance faces is still the online channel. That's the concern investors have out there," Basham said. "How quickly do solutions by online players develop to become more material threats?"
 
Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Similar Content

    • By APF
      AmazonBasics High Mileage Motor Oil - Synthetic Blend
      AmazonBasics high-mileage synthetic-blend motor oil offers an enhanced level of protection for engines over 75,000 miles. Its synthetic blend combines conventional oil with synthetic for cost efficiency with some of the benefits of a full synthetic. An important part of routine maintenance, the motor oil works well for anything from topping off levels to complete oil changes. Whether it’s a beloved older vehicle or one with an uncertain maintenance history, help protect its engine with AmazonBasics high-mileage, synthetic-blend motor oil.
      API SN and ILSAC GF-5 approved, AmazonBasics high-mileage motor oil offers exceptional quality and convenience.
      Note: Always follow vehicle manual recommendations.
      Friction-Reducing Formula
      AmazonBasics high-mileage motor oil creates a protective coating that helps reduce wear on engine components. By minimizing friction from in-contact moving engine parts (which wastes otherwise useful power), the motor oil helps enhance fuel economy and promotes better power output and performance.
      Reliable Protection
      The high-mileage motor oil helps keep the engine clean by minimizing unwanted build-up that can cause damaging rust and corrosion. The motor oil offers a resistance to viscosity and thermal breakdown, plus it helps fight volatility burn-off, which can reduce engine deposits and exhaust emissions.
      Available Viscosity Grades
      The motor oil’s grade, as established by the Society of Automotive Engineers (SAE), reflects its viscosity characteristics. The first number(s)—5W and 10W—indicate cold-temperature performance (W for winter), while the end numbers—20, 30, and 40—indicate high-temperature performance (at 100 degrees C).
      Depending on driving conditions and needs, choose from the following AmazonBasics high-mileage synthetic-blend motor oil grades (shown in chart below; each sold separately):
       


       
       

       
       
       
       

       
       
    • By APF
      Auto parts retailers have been spared from sharing the same fate as Barnes & Noble, Toys R Us and so many other companies rendered redundant by Amazon. About 80 percent of AutoZone's business comes from people repairing their own cars with the other 20 percent coming from professional mechanics. Amazon's gaining traction in stealing away some of the consumer market.                                 Daniel Acker | Bloomberg | Getty Images An employee, right, helps a customer change a license plate bulb outside an AutoZone store in Princeton, Illinois. Amazon has crushed many iconic American companies, but auto parts retailers like O'Reilly and AutoZone have managed to fend them off.
      For now.
      Stores that sell car batteries, mufflers and other parts are facing new pressure since Amazon started selling auto parts. Big retailers like Walmart have also jumped into the fray, in part, to compete against Amazon.
      So far, auto parts retailers have been spared from sharing the same fate as Barnes & Noble, Toys R Us and so many other companies rendered redundant by Amazon.
      For years, the $130 billion business selling aftermarket auto parts was one of the steadiest segments in retail, with mild cyclical fluctuations and slow trend of consolidation, MoffettNathanson analyst Greg Melich told CNBC. The segment even managed to make it through the recession reasonably well, as drivers repaired instead of upgrading their cars.
      But pair of warm winters and a variety of other factors in 2016 and 2017 took a toll on the segment, just as Amazon and Walmart stepped up their efforts to grab market share. Now there is an oversupply of sellers in a market that has been experiencing slower demand, and may see slower growth in the next few years, Melich said.
      "The battle of the titans between Walmart and Amazon is only just starting," Melich said. "The smart companies are doing what they should do, which is lean into the more service oriented part of the business on the commercial side."
      Amazon pulls in about $6 billion in annual sales from "do-it-yourself" auto parts customers and is partnering with Sears to sell tires.
      Walmart has also stepped up its game in the segment over the last three years, even at the expense of profit margins, Melich said.
      In 2018, MoffettNathanson expects Amazon and Walmart to have a combined share of about 23 percent of the "do-it-yourself" market — with Amazon at about 8 percent and Walmart around 15 percent. Just 5 years ago, the two retailers had up to 17 percent of that market.
      The more a retailer serves consumers, the tougher it will be for them to compete against Amazon.
      About 80 percent of AutoZone's business comes from people repairing their own cars with the other 20 percent coming from professional mechanics. About 60 percent of O'Reilly's sales comes from the do-it-yourself consumer market with mechanics making up the rest.
      The split is reversed at Advance Auto Parts with 40 percent of its revenue coming from consumers. Just 25 percent of the sales at Genuine Parts, which owns NAPA, comes from people popping their own hoods to fix that troublesome rattle.
      "Amazon is obviously more of a risk to an AutoZone which does a majority of their business in DIY," Jordan said. He added that AutoZone is making a big push into serving commercial customers where there's more potential growth.
      The increasing technical complexity of cars means it is ever more difficult for ordinary customers to service what they own.
      That bodes well for sales of parts on the commercial side. More sophisticated parts cost more money. A halogen headlight for a 2005 Jeep Wrangler might cost $15, but a new headlamp on a luxury vehicle — the sort that can swivel to follow the shape of the road — might cost hundreds of dollars, Jordan said.
      So far, Amazon has not been able to crack the code of the commercial auto parts business. Parts sellers need a mind-boggling degree of inventory — enough parts for the wide array of cars on the road, Jordan said.
      It also does not yet have enough points of distribution around the country to replicate what auto parts stores do for commercial customers, and it might not be the best use of their resources right now to invest in that, Melich said.
      Of course, he added, that could change in just a few years. Amazon didn't have a strong grocery distribution network, that is, until it bought Wholefoods Market.
      Source: https://www.cnbc.com/2018/07/16/auto-parts-retailers-are-caught-in-battle-between-walmart-and-amazon.html
    • By APF
      Advance Auto Parts CEO Tom Greco on Tuesday said the company plans to bring in outside help to compete against e-commerce giant Amazon.
      “So when you talk about Amazon particularly, we’ve had to recruit some people into the company who can really help us compete vigorously against formidable competitors like Amazon,” he told FOX Business’ Liz Claman on “Countdown to the Closing Bell.”
      The company is trying to engineer a business turnaround by using its savings from the tax reform bill and is taking steps to step up its e-commerce program.
      “We’re investing in e-commerce and our technology programs because we know that’s going to be important,” Greco said. “We certainly made big investments in customer service because the experience that our customers have both online and in the stores is critical and then in our people.”
      According to Greco, one of the biggest focuses of the plan is to incentivize its employees.
      “Overall, we have a plan that is going to invest significantly back in our employees,” he said. “We have front-line employees all over the country who are really important for us. We want the very best parts people in the business working for Advance.”
      After President Donald Trump signed the Tax Cuts and Jobs Act, which slashed the corporate tax rate to 21% from 35%, companies began giving incentives to their workers including salary hikes to $1,000 bonuses.
      As a part of the auto parts retailer’s turnaround strategy, the company introduced a stock ownership program that provides its top-performing employees with stock options.
      “We actually introduced a stock ownership program for them for our top performers so that they can earn stock in the company,” he said. “We feel that is a really good retention move for us, and it has dropped our turnover significantly.”
      Source: http://www.foxbusiness.com/markets/amazon-triggers-advance-auto-parts-call-for-outside-help
       
    • By Teddy
      The online market for after-market car parts, by some estimates expected to top $10 billion in the next few years, represents an interesting opportunity both for established retailers that could grab market share as consumers move online—and companies like Amazon, that will look to grab those same shoppers.
      Investors have been sensitive to the threat Amazon presents for a while now. Early last year, when news broke that the company was targeting the market, sector stocks took a tumble. Is it useless to resist the oncoming behemoth?
      Perhaps not. In a Friday report, Raymond James analysts reviewed some of the major players’ sites, comparing those of Advance Auto Parts, AutoZone, O’Reilly Auto Parts, Amazon and privately-owned RockAuto. By their measures, Advance holds up best.
      ILLUSTRATION: RAYMOND JAMES “Advance’s and O’Reilly’s websites offer a slightly more attractive alternative to Amazon’s,” the analysts wrote, “particularly for DIY customers that are either 1) looking for useful browsing features, 2) seeking information on parts, or 3) wanting to buy online and pick up in store.”
      More generally, investors seem to like the business. Earlier this month, Credit Suisse predicted improved sales in 2018 and a boost from tax reform. And on Friday, JPMorgan called it “one of the best sectors in retail,” adding Advance to its “Focus List” with a $138 price target on the shares, about 12% above current levels.
    • By TieRod
      So it seems that Amazon has switched most of their prime member orders to the USPS, probably to save costs. The issue is that the US Post Office does not make deliveries if you are on a private road, unless you have a mailman going outside the policy. I even spoke to the post master of the local office and he's getting complaints from residents who are not getting their packages and have to go pick up at the post office! The mailman is even dropping off a slip that says "Sorry we missed you" or "Delivery attempted" when in fact the package never leaves the post office and they just use that form. It's a joke and my taxes at work, can;t get any more packages from USPS and that includes the majority of them from Amazon. 
      With Amazon's main carrot being delivery and Prime within two days, that's going away for me and for others on private roads unless they switch back to UPS. There is no point if I have to go to the post office to pick it up, no convenience there. Amazon should have negotiated better with the USPS.
  • Similar Topics

    • By briskparts
      Hunan Brisk Machinery Co.,Ltd supply 10000 kinds of excavator slewing bearing, if need know more swing bearing,
      welcome to contact
      Mobile: +86 155 74813356 (whatsapp) email: [email protected]
       
       
    • By APF
      FindItParts is the one-stop shop for all your heavy duty truck parts and trailer needs
      We specialize in meeting all your parts and accessories needs for your heavy duty truck and trailers. We are veterans of the heavy duty truck parts business who started by building and scaling from one heavy duty truck parts branch to twenty five branches. Seeing the challenges that many customers faced we set out to transform the industry and create a better buying experience. We took the best of both worlds by allowing customers to order online 24x7 with easy lookup by part number, keyword or cross reference. We paired the online experience with skilled professionals available to assist customers with any technical questions. We offer a best in class online experience with order tracking and complete access to purchase history.
      MORE ABOUT US
      FinditParts serves owner-operators, fleet managers, municipalities, distributors, repair facilities and resellers with concierge level customer service. Our team of technical parts specialists is on hand daily to assist buyers with any of their needs, from identifying and sourcing hard to find parts to fulfilling stock order requests. If you're a business with a fleet of heavy duty trucks, tractors or trailers, a repair facility or a distributor of parts, learn more about our Business Solutions today. With millions of parts in our catalog on an easy-to-use website, FinditParts is the largest single-source Internet distributor of heavy duty OEM and aftermarket parts. From hard-to-find parts to everyday preventative maintenance items, FinditParts is your partner in keeping your heavy duty truck on the road.
       

    • By RockAuto
      WJB is offering RockAuto customers an exclusive 10% off instant rebate on the entire line of WJB Wheel Hubs, Bearings, Seals and Water Pumps.
      View on RockAuto.com
    • By APF
      DAYTONA BEACH, Fla. & RALEIGH, N.C.--(BUSINESS WIRE)--As NASCAR Weekly Series sanctioned events begin to return at select tracks across North America, NASCAR and Advance Auto Parts (NYSE: AAP), a leading automotive aftermarket parts provider, today announced a multiyear official partnership, designating Advance as the series entitlement sponsor. As part of the agreement, Advance also becomes the “Official Auto Parts Retailer of NASCAR.”
      "It's great to have Advance join us in welcoming the return of NASCAR-sanctioned grassroots racing," said Ben Kennedy, vice president, racing development, NASCAR. "Advance’s commitment to our Weekly Series will develop some of the brightest NASCAR talent across North America. Advance has a long history in racing, and we’re thrilled to see its expanded presence from the grassroots all the way through our national series.”
      The NASCAR Advance Auto Parts Weekly Series is one of the oldest series in NASCAR, where champions are crowned at NASCAR-sanctioned Home Tracks. The NASCAR Advance Auto Parts Weekly Series was paused in mid-March due to COVID-19 and recently returned with sanctioned events at select tracks beginning June 6.
      The series is run at nearly 60 NASCAR-sanctioned Home Tracks throughout the United States and Canada. NASCAR Home Tracks are a group of local short tracks sanctioned by NASCAR.
      “Drivers and race fans in North America have not been able to attend their local tracks due to COVID-19. We are excited to be partnering with NASCAR and the NASCAR Weekly Series to support tracks, drivers and fans as they resume live racing this year,” said Jason McDonell, Advance’s chief marketing officer. “We are committed to helping our customers advance in our stores, online and with this multiyear partnership with NASCAR. We are passionate about advancing local communities where we serve, and through this sponsorship we’ll be able to help grow racing at the grassroots level while supporting the next generation of champions.”
      Race fans can catch select NASCAR Advance Auto Parts Weekly Series races live and on-demand via TrackPass on NBC Sports Gold, the new streaming service from NASCAR and NBC Sports. NASCAR Advance Auto Parts Weekly Series races are part of the NASCAR Roots package for $2.99/month or $19.99/annually. The full TrackPass package, which includes NASCAR Roots, IMSA and American Flat Track events is available for $4.99/month or $44.99/year. TrackPass on NBC Sports Gold will be available on desktop web browsers and via the NBC Sports app on iOS and Android phones and tablets, Apple TV (Gen 4), Roku, Amazon Fire TV, AndroidTV, Xfinity X1, Xfinity Flex and Chromecast devices connected via HDMI.
      About NASCAR
      The National Association for Stock Car Auto Racing (NASCAR) is the sanctioning body for the No. 1 form of motorsports in the United States and owner of 16 of the nation’s major motorsports entertainment facilities. NASCAR consists of three national series (NASCAR Cup Series™, NASCAR Xfinity Series™, and NASCAR Gander RV & Outdoors Truck Series™), four regional series (ARCA Menards Series, ARCA Menards Series East & West and the NASCAR Whelen Modified Tour), one local grassroots series and three international series. The International Motor Sports Association™ (IMSA®) governs the IMSA WeatherTech SportsCar Championship™, the premier U.S. sports car series. NASCAR also owns Motor Racing Network, Racing Electronics, Americrown Service and ONE DAYTONA. Based in Daytona Beach, Florida, with offices in eight cities across North America, NASCAR sanctions more than visit www.NASCAR.com and www.IMSA.com, and follow NASCAR on Facebook, Twitter, Instagram, and Snapchat (‘NASCAR’).
      About Advance Auto Parts
      Advance Auto Parts, Inc., is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. As of April 18, 2020, Advance operated 4,843 stores and 168 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. The Company also serves 1,258 independently owned Carquest branded stores across these locations in addition to Mexico, the Bahamas, Turks and Caicos and British Virgin Islands. Additional information about Advance, including employment opportunities, customer services and online shopping for parts, accessories, and other offerings can be found at www.AdvanceAutoParts.com.

      Contacts
      Investor Relations:
      Elisabeth Eisleben
      T: (919) 227-5466
      E: [email protected]
      Media Relations:
      Darryl Carr
      T: (984) 389-7207
      E: [email protected]
      Source: https://www.businesswire.com/news/home/20200610005058/en/

×
  • Create New...