The Beauty of Channel Conflict

“Channel Conflict” is a term not well understood outside of the distribution world, but the struggle within is having far reaching impacts on all of us. Basically it is the fight between “partners” in a given distribution channel over who gets to sell to whom. Those were the good old days when things were simple…Nice neat silos with very few conflicts.

Into this fairly smooth model, around 1997 was introduced Google. Very few people had the vision to project the impact our current search engine driven world would create. In fact, even now many are trying to cling to the way things “used to be”. If there are two things we Americans are good at they are embracing change and fighting change. In the auto parts world we emulate both. There were a few imaginative companies who built a model around the internet as early as the AOL and Yahoo days.

This new E-economy business model hangs on a vast distribution network tied together through internet connections linking all of the old players in new and different agreements. Most of the players don’t want to admit to the fact that they are supplying this behemoth, but they are unable to turn down the added volume it produces. It really is a very impressive system where three and four step processes are done in a virtual marketplace and HTML agreements disperse profit percentages automatically based on coded algorithms. It all works great most of the time. There are still some opportunities for fine tuning the process where links are removed from the supply chain and the savings passed along to the end user.

If you asked your average mechanic if he would allow his customer to buy their own parts over the internet and install them, he would probably say no. If you did the same at a dealership you would be laughed out of the place. I suggest that we are living in a changed world and our cozy distribution silos that we built for the past need to be torn down. Increasingly the three, four and five step process of getting parts from the manufacturer to installed on a customers car are too time consuming and costly. How many housewives take that $1500 A/C job quote home and do a price comparison on Google. Ask the car dealers about how well they can protect margin on automotive sales now that the underlying cost information is laid bare for everyone to see on the internet. Information empowers people to be more intelligent in their decisions. I believe those distribution partners and repair facilities that are willing to support this new type of customer will be the ones able to thrive in this new economy. From what I can tell, the trend is towards an increase of 10%-30% on labor charges. That way both parties to the transaction feel they have benefited.

In the distribution world we constantly bicker amongst our partners about who has the right to sell to whom. The dealership doesn’t want the distributor to sell to his wholesale customer. The retail store doesn’t want OE in his garage customers shop unless it was channeled through their store. The warehouse distributor doesn’t want his manufacturer going direct to their national fleet accounts. In the real world out there all of our customers are looking past us to the internet and who can get them what they want the quickest and at the lowest price. This new market is not going to go away. The customer now has the part they need in their hand… who wants to get paid to put it on their car?

The bottom line is this; the customer today is wiser and has more options. Autopartstomorrow is offering a vast selection of auto parts at a very compelling price. If today's e-consumer wants to buy their car repair parts this way, the market will begin to accommodate their request. Good for everyone, except those who are unwilling to change.

Autopartstomorrow
.

Why Do I Need a Return Request?

For those of you not in the auto parts business this is an entirely legitimate question. Those of us that deal with returns of auto parts each day just drop our head and quietly mutter "They just don't understand...". Unlike many other industries, there are many different scenarios as to why someone might need to return a part, and several different return types that need to considered when a box with a part in it (and no paperwork or explanation) shows up at our door.

We are a wholesale company... that also sells to the public. The first thing a returns associate needs to know is "Who gets credit, and how much?". If it a customer with an account it then becomes a question of is it a warranty, a new return (just didn't need it), a new defective item or a core return. Then the returns associate needs to determine if the part is returnable to the manufacturer, can we get a core rebate, if it was just selected incorrectly should it go back on the shelf... and on and on and on.

So, with all of that said, it is always best to have the paperwork printed and in the box so that our returns department (five full time associates) can quickly read what needs to be done and speed your credit. We understand it takes a few minutes to fill out the request and print the approval for your return, but without it we cannot determine what is needed. For your own benefit, please fill out the return form... and we will pledge to push the credit back to you as quickly as we can.

Autopartstomorrow

Who Should You Trust?

When you buy anything online you are allowing for a certain amount of trust in a stranger. Many people do some research into who that company is behind the scenes. If it's the same brand name as someone that has a bricks and mortar auto parts store down the street it provides a little bit more comfort. For a company like Autopartstomorrow.com we are probably never going to have a storefront on every corner (In business, never say never).

The reason is that we feel we can work in a much more cost efficient manner if we don't have those astronomical expenses associated with rent, upkeep, utilities, employees, etc... If we are going to sell wholesale, we need to keep our operations er, wholesale. That doesn't mean we aren't worthy of your trust.

In the world of auto parts distribution there have always been several layers; The manufacturer, the distributor, the Jobber store, the store front, the mechanic and the end user. The manufacturer recognizes that their talent lies in the actual making of the part. They make the parts and sell them by the truckload to companies whose expertise is in distributing the parts. We are a wholesale distributor. We have been this cog in the wheel for over 80 years. We are good at buying from the manufacturer and distributing them to others with the ability to get product to the customer.

In the past, it really was necessary to have a storefront near where the end user lived. Now, with the internet, we can "distribute" directly. As a result, we can also collapse a couple of those levels of profit taking, and share our savings with the customer. We feel that those savings make it worth buying from a huge regional warehouse in an industrial district rather than a beautiful, well lit and merchandised auto parts store down the street. At the end of the day however, it will be up to the consumer to decide.