Selling auto parts on eBay or Amazon (or other marketplaces) offers a lot of promise. Amazon and eBay sellers who’ve mastered these systems can sell millions of dollars worth of parts every year. Even though the margins are often small, a small percentage of a big number is usually a good thing.

Of course, there are pitfalls too. When you’re selling on the world’s largest auto parts ecommerce website, a small mistake can cost thousands of dollars. There are marketplace rules that must be strictly followed, feedback requirements that can be onerous, and of course, stiff competition.

Our goal with this post is to help parts retailers understand the pros and cons of selling auto parts on Amazon, eBay, or some of the other marketplaces like them.

The Pros

There are just a couple of good reasons to sell auto parts and accessories on sites like Amazon and eBay, but they are admittedly compelling.

Huge Customer Base

At Amazon and eBay, you’d find 183 million and 96 million unique visitors per month respectively. But that’s just part of the story:

  • Amazon has 10’s of millions of Prime subscribers, all of whom are heavy Amazon shoppers. It’s been estimated that some huge percentage of Amazon’s sales (80%?) are to Prime subscribers.
  • eBay has carved out a bit of a reputation in the auto parts and accessories niche. A lot of people habitually buy parts on eBay, as their fitment system is fairly easy, and the pricing is usually great.

There are other marketplaces too – is growing steadily, for example – but for now, these two sites are where auto parts customers are shopping.

online marketplace for auto parts

A marketplace is a great place to reach a lot of customers, but it’s also a low margin sales channel.

Huge Potential for Volume

When a website has tens of millions of visitors each month, it’s easy to understand the potential for volume and revenue.

  • Imagine that you have 10 million visitors looking for auto parts each month on eBay (NOTE: this is just a number pulled out of the air – eBay’s auto parts visitor volumes aren’t published)
  • Imagine that 10% of these visitors will spend an average of $150 each on parts…that’s 1 million buyers at $150 each, or $150 million in total sales.
  • Now, imagine having an eBay store that gets just 0.1% of these sales. That’s a tiny sliver of the market, yet it’s also $150,000! An eBay store selling $150,000 in parts each month will do $1.8 million in annual revenue.

As you can see, there is a huge potential for volume. Even earning just a tiny slice of the sales on a site like eBay or Amazon works out to a significant sum.

The Cons

Before your company goes and sets up an eBay store or Amazon Seller Central account, there are some things to consider.

Low Margins

The potential for volume combined with a low barrier of entry inevitably makes for a low margin business. Put another way:

  • Anyone can sell parts on Amazon, eBay, et. al. if they meet a minimum set of qualifications. This makes for a tremendous amount of competition.
  • Sales volume is mostly a zero sum game on a marketplace website…if your company wants to sell more parts, you’ll need to find a way to offer customers more value. Even now, many companies selling parts on the marketplaces are earning margins of only 3 or 4%.(!)

Tremendous Competition

sample ebay search page

Over 46,000 transmission mounts are listed for sale on eBay. Say what?!

Anyone can sell products on Amazon or eBay, assuming they can fill out the application and pay for a store or SellerCentral account. This means that there’s a constant supply of new competitors joining the marketplaces.

Most new sellers won’t survive – they won’t understand the rules, won’t pay close enough attention to ratings or feedback, and won’t invest in tools that make selling parts and accessories easy. But a handful will figure it out, and then every seller’s slice of the pie will get a little smaller.

Customer Service Challenges

Marketplace websites all tend to have the same philosophy: They can’t replace customers, but they can always replace sellers. This means that, when there’s a dispute between a seller and a consumer, the rules favor the consumer:

  • Is your customer upset because their part arrived a day later than expected? That’s probably going to hurt your seller rating.
  • Is your customer upset because they ordered the wrong part, and now they’re claiming that your listing is misleading (even if it’s not)? That’s probably going to hurt your seller rating.
  • Did you take a day off and forget to mark an order shipped within 24 hours? That’s probably going to hurt your seller rating.
  • Did you have an issue with a particular part number and forget to mark it out of stock? That’s going to hurt your seller rating.

Etc. There are dozens of stories like these, all of which reflect a philosophy that puts the customer first. Seller ratings are used as a hammer by the marketplace sites, as a low rating limits sales and can eventually result in account suspension.

Selling On A Marketplace Isn’t Necessarily Building Your Business

workers at quarry

Selling on a marketplace can be a lot like toiling at the quarry for a paycheck. It doesn’t do much for your business long-term.

The biggest “con” to selling parts on a marketplace? Even if your company is really, really successful at selling parts or accessories on a marketplace site, you won’t have much to show for it.

  • Sellers don’t own any customer data, which means they can’t grow by marketing to previous customers.
  • Sellers don’t have much (or any) brand recognition. While customers are buying their parts from a seller, they think they’re buying from Amazon, eBay, etc.
  • Seller sales are 100% dependent upon the marketplace. If the marketplace decides to increase their fees, or block out sellers who don’t meet specific criteria, that’s it. There’s no “plan b” if the marketplace shuts off a seller’s account, or makes selling on their system too expensive.

Of all the negatives to selling parts on sites like eBay or Amazon, this is by far the biggest.

Should Your Company Sell Auto Parts On eBay, Amazon, etc?

While we can’t answer this question, we can offer some food for thought.

First, understand that selling another company’s parts on another company’s website is going to be tough sledding eventually. Reselling parts your company is buying from a distributor on a marketplace that literally anyone can join? That’s going to be a business with very little margin for error…especially if we look more than a few months ahead.

Second, consider the value of knowing who your customers are. What’s the lifetime value of a customer that just bought a set of running boards? If they just spent $500 with your company, is there a chance your company could sell them more parts later by marketing to them directly?

get repeat customers online

Repeat customers are one of keys to growth in every business, not just auto parts.

Most auto parts online retailers get 50-75% of their revenue from repeat customers. A strategy that ignores marketing to previous customers is going to be tough to execute.

Third, can your company build a brand on these marketplace websites? If your company is selling branded products, and your brand starts to get traction on Amazon or eBay, that can be a very good thing. People who buy a set of “RPM brand shocks” (not a real thing) on Amazon might be inclined to search for “RPM brand shocks” next time they’re in the market for parts. That might lead them to the RPM brand website, as opposed to a marketplace.

Finally, what is your primary business – selling parts or mastering marketplace rules? The most successful marketplace sellers have one thing in common: They know the ins and outs of the marketplace. They know every rule and every policy. They understand how every tool works. They are great at perfecting listings, maximizing feedback, etc. Now, this isn’t to say that these sellers don’t also know about parts, but the sad fact is that a lot of the top sellers on eBay and Amazon aren’t experts when it comes to auto parts and accessories.

Summing up, marketplace websites like Amazon and eBay bring a lot of value to consumers. However, we’d argue that they don’t bring a lot of value to sellers. If your company is going to sell parts on Amazon or eBay, it’s a good idea to have a plan to sell parts outside of these marketplaces too. Invest in your own auto parts website, focus on a niche, and build a brand.

This way, if/when the day comes that your company stops selling parts on Amazon or eBay, it can.

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