Asked of the biggest challenge to their parts operations during the downturn in wholegoods sales the past 3 years, farm equipment dealers point to online sales and competition from aftermarket sellers. Comments included, “pricing competitively against the aftermarket” ... “internet pricing being lower than us” ... “cheaper options online” ... “striving for better margins” and “price shoppers” and “less parts demand, online sources have captured more sales with our customers vs. walking in” were the most often cited causes for concern.
Question: Are you losing customers to online options for service parts (primarily aftermarket)?
“We don’t have a lot of challenges,” said one dealer, “other than price. Everyone would like to pay less.” Another added, “We are using aftermarket to raise our margins.” Still another said their dealership’s biggest headache in selling parts is “explaining value, stocking aftermarket parts for counter fill and customer satisfaction. We are training our employees to think aftermarket options, not just OEM sourced parts.”
Question: Are your customers moving away from OEM service parts and choosing aftermarket parts?
Some dealers say their biggest challenges during the wholegoods sales downturn are the same as when equipment sales were booming. “Getting customers to spend money to repair” … “Cost of carrying inventory” … “Increased inventory to increase fill % and customer satisfaction” … “Customers don’t fix everything — just what is needed — so sales on parts are down” … “Increased parts shopping and shade tree mechanics” … “Selling enough parts to keep the stockholders happy!”