Online Retail in Detail Part 1 - Equipment Dealers Embrace Opportunity

Over the past several years, consumers have researched their purchases online more and more. Along with the trend toward internet research before a purchase, the number of consumers who choose to ultimately buy their products online has also grown.

Outdoor power equipment parts have become a big online seller. A simple Google search for “buy lawnmower parts” draws over seven million results in less than half a second. A mix of manufacturer, dealer and aftermarket parts websites lead the results. Sites like offer replacement parts for outdoor power equipment and household items, along with DIY tutorials.

The auto parts industry, which sees many comparisons to the outdoor power equipment industry, has felt the impact of online parts sales. Car shows and swap meets are seeing fewer attendees and vendors, as more of them are turning to the internet for the selling and purchasing of parts.

According to Hedges & Company, a digital agency serving the automotive aftermarket industry, automotive aftermarket industry statistics show that online retail sales of automotive parts increased 12.4% from 2010 to 2011, 16.5% from 2011 to 2012, and is projected to grow 15.5% from 2012 to 2013.


Equipment dealers are selling online

Outdoor power equipment is seeing some growth in online purchases as well. Results from informal polling of equipment dealers visiting offer some additional front-line insight into the growing business of online selling. While the polling data is not scientific, it may help paint a picture of where dealers stand on the issue today, and how their attitudes may be evolving.

Roughly 54% of dealers who took the survey do not sell parts online. Another 41% sell just a small amount. A small group of dealers (5%) said the internet is now playing a significant role in their overall parts operations, constituting more than 30% of parts sales.

Most dealers (72%) said their online parts business is not growing. Of those dealers who said it is growing, 82% said it's growing at a rate of less than 10% per year. A small group of dealers (5%) is growing online parts sales at a relatively fast clip of more than 20% per year.

Jerry Clay of Clay's Power Equipment in Raleigh, NC, has been selling parts online for roughly six years. Clay says those sales make up less than 5% of his total parts sales, but the numbers are growing. When he entered the online retail game, it was to connect with customers he wasn’t previously reaching.

“I saw internet sales growing as a whole, and that we were missing out on potential sales that we could be making,” says Clay. “Some customers don’t want to shop in stores and choose to do it online for convenience and time savings.”

Getting back to the dealer poll, 59% of dealers want to grow their online parts business. This is despite the fact that 65% of dealers do not think online selling is good for the industry. So why do so many dealers want to grow their online parts sales?

  • 21% said it's a free market and it's their right to
  • 24% said manufacturers are already doing it so they should as well
  • 10% said some dealers are already doing it so they better compete
  • 28% said other dealers aren't satisfying their local demand for replacement parts


Contractors are buying

And demand there is. Many contractors are taking advantage of the growing ease with which they can purchase parts online. Reid Altavilla, fleet director for Ruppert Landscape Inc. in Laytonsville, MD, says the company purchases parts through a variety of avenues including online, dealers and manufacturer-direct. Through internet research they hunt for the most competitively priced items available. Part of their decision to purchase online is also the added convenience it offers their efficiency-focused business.

“Online purchasing enables us to do the research ourselves in a timeframe that works for us, whether that’s 5 a.m. or 11 p.m.,” says Altavilla. Clay agrees that time savings and a dealer's hours of operation are a big incentive for contractors to buy online—especially since contractors are always looking to increase productivity.

“Time is the main benefit for the contractor,” says Clay. “Instead of the owner or a key person coming into the store to order, and perhaps even having to come back to pick up parts not in stock, they can order online and have items shipped directly to the business. That means increased production and improved efficiency.”

However, there are many instances where Ruppert Landscape trusts in their local dealer for a necessary part. While there is a lot of added convenience that goes with an internet purchase, the sometimes necessary consultation isn’t always an option online.

“We do online purchasing for many items, but there are some that still require more involvement on the other end to make sure we’re getting the right part and the best part,” explains Altavilla. “Often when ordering online, there’s not the expertise there to help problem solve. If it requires support, we’re typically not going online to place the order.”


Ways dealers and contractors can work together

For those dealers looking to compete against the online marketplace, Altavilla has a few suggestions for how to do so. “Provide quick delivery, no delivery charges, and be a technical and training resource for us (contractors), which is a real value-add,” he says. “Also, have an active presence on the web and a website that is intuitive and easy to navigate. Dealers that have their parts inventory listed on the web can make purchasing feel much the same as from houses that sell strictly online.”

At Ruppert Landscaping, it also has a lot to do with the dealer relationships and the benefits that go with them. If equipment dealers show the worth of their service, and how a partnership has more value than the convenience which online purchases bring, contractors might choose loyalty to their dealer.

“One of the biggest advantages of working with a dealer over purchasing online is the vendor relationship that develops,” says Altavilla. “Dealers often conduct in-house training for us, and if we have a broken piece of equipment or a recall, they will give us a replacement so it doesn’t damage our productivity.”

Clay agrees that it’s the dealer-customer relationship that can help keep dealers from being hit too hard by the online trend. Dealers provide a valuable service in addition to product.

“Online sales hurt some dealers, but the majority of most dealer parts sales are always going to come from your customers who are coming into your store,” Clay says. “They are coming to us for advice and someone they can have a relationship with. A dealer has to provide that value to his customers to keep them coming back for parts.”


Varying manufacturer policy and regulation

What's really at issue with respect to online parts sales, at least in the minds of some dealers and manufacturers, are the territorial rights of servicing equipment dealers. A given dealer is granted a certain geographic location by a manufacturer (or distributor) in which to sell equipment and parts. The internet affords dealers the ability to vastly expand their market potential—especially when manufacturers and distributors ineffectively police online selling. And according to the dealer poll, roughly one in three dealers is selling parts outside of his designated market area.

There are several equipment manufacturers who allow their dealers to sell online as long as the dealers abide by the manufacturer’s “regulation”. Others will allow dealers to ship product outside of their territory, but not make it available online for purchase. There are also some manufacturers that don’t permit the sale of their products or parts outside of a territory under any circumstances.

Briggs & Stratton sells Snapper- and Simplicity-branded parts online directly to consumers, and encourages their dealers to do the same. For those dealers that don't already open their businesses up to those purchases, Briggs is offering them resources to learn how.

“We have great faith in our dealers’ abilities to sell our end products and our OEM parts in their local markets. Not all dealers, however, engage in online selling,” explains Troy Blewett, director of dealer channel marketing for Briggs & Stratton. “Additionally, for our dealers who are selling parts online (or who would like to start), Briggs & Stratton offers a variety of online tools they can use to increase their local search capabilities and drive more consumers to their own websites. In fact, our branded websites link directly to those of our dealers.”

Another manufacturer, Stihl, says no way. They want to make sure customers who are using their products are purchasing parts from dealers who can provide them with the right service and the right knowledge to ensure that their product experiences are positive.

“We believe it is critical to customer safety and satisfaction for (consumers) to receive the advice, information on product operation and safety, and service after the sale that can only be delivered by the knowledgeable and trained technicians at our servicing dealers,” explains Steve Meriam, Stihl's director of sales.

Stihl, like Briggs & Stratton, does see the value and opportunity of the online marketplace. Stihl offers tools and resources for dealers to connect with customers online. The Stihl Express online reservation system allows customers to research Stihl products online and reserve products with their dealers for in-store purchase.

Husqvarna offers a similar pre-order, in-store pickup option, but also permits dealers to sell certain products online under their guidelines. “We encourage dealers to sell parts and equipment online,” says Jeff Dewosky, vice president of dealer sales for Husqvarna. “We have an internet policy that guides our dealers on how and what they can sell online. Husqvarna’s internet policy lists what products are allowed to be sold outside (of a dealer's) territory.”