Step One: Pricing and Shipping
How to attract customers? Pricing!
Your web store is open and ready for business, so what’s the best strategy for attracting customers? Competitive pricing! This is essential for getting the attention of potential buyers, and effective customer service will keep them coming back. You’re going to stick out like a busted tail light if your typical retail prices appear online next to your competitors’ more aggressive rates.
RevolutionParts has conducted detailed analysis of pricing across all major OEM brands, and have come up with best practices for pricing to build volume and a solid customer base over time. We know that this strategy works, as we've seen it work for our successful dealers.
Later, when you've built a solid customer base and you’ve won their trust, you can begin to experiment with changes to your pricing matrix – we recommend these changes are made gradually, and if you’re using our Marketing Agency, you should always consult with your digital marketing specialist to get their input.
Concerns on Pricing and Margins
One of the biggest concerns of selling online is slashed margins. Over the counter, dealers expect OEM part sales to fetch high margins, whereas in the eCommerce landscape margins tend to be much slimmer due to differences in the type of customer you’re trying to attract.
Unlike physical locations, where the primary competition is other local dealerships, eCommerce dealers will find themselves competing with many retailers from across the country. Dealers will need to keep margins lower and keep tabs on what the competition is doing in order to stay visible in online searches and ensure steady volume. Competitive pricing is a key component of driving traffic, and some parts managers may even decide to become a loss leader on a particular item by setting a smaller margin in order to attract more customers, in hopes of getting those customers to buy more items at the same time, or keep coming back for future purchases.
Volume is King
From a national sales standpoint, VOLUME IS THE NAME OF THE GAME. Driving more volume can have a number of positive effects for the dealership, including OEM kickbacks/backend revenue, increased return allowances, and increased purchasing power. Some dealers may choose to price their parts even more aggressively than most, while factoring these additional benefits into their overall strategy.
Here’s an example of how selling parts at smaller margins can actually be more beneficial than selling at MSRP:
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Part Cost: $75.00 |
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Online Price: $85.88 |
MSRP: $95.00 |
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Quantity Sold: 7 |
Quantity Sold: 2 |
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Revenue: $601.16 |
Revenue: $190.00 |
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Profit: $76.16 |
Profit: $40.00 |
Shipping helps converts shoppers to buyers
As we discussed, competitive pricing is a key component of driving traffic to your webstore, and offering a range of shipping carriers and delivery options will help turn more of those shoppers into buyers. In fact, high shipping costs are one of the most common reasons that shoppers choose not to buy from a particular site; online shoppers are looking for the best bang for their buck, and if a store’s pricing is competitive but their shipping rates are too high, shoppers may elect to go elsewhere in order to save money.
With that in mind, RevolutionParts recommends being very competitive with your most popular shipping options (Ground, Economy), and adding some additional margins for Expedited or Overnight shipping methods. Shoppers that need to get their parts quickly already expect to pay a higher fee for faster shipping time, so increasing margins here can help to balance the scales.
Here’s an example of a typical shipping matrix for our webstore dealers:
USPS Priority with 8-12% fee above quote
USPS Parcel with 10-12% fee above quote
USPS Express with 12-15% fee above quote
FedEx and/or UPS Ground with 10-15% fee above quote
FedEx and/or UPS 2-day or 3-day with 15-25% fee above quote
FedEx and/or UPS Overnight with 15-25% fee above quote
Freight: flat fee of $150-$200 + $1.50-$2.00 per pound
When using FedEx or UPS, we also strongly recommend integrating the dealership’s account credentials with the RevolutionParts platform – not only will this enable you to print shipping labels directly from our system, thus making your operation more efficient, it will also allow RP to access any negotiated or discounted shipping rates you may have access to, which can serve to make you appear more competitive.
Step Two: Customer Service
Great customer service will ensure repeat traffic
Competitive pricing and shipping will help get potential customers in the front door, but how do you keep them coming back? The answer is stellar customer service! Quick and responsive communication should be part of your everyday process, especially during times when many dealers are struggling with supply chain issues.
If you receive an order for a part that you can’t get your hands on quickly, don’t just cancel the order – reach out to the buyer and let them know! You might be surprised how often buyers are willing to wait for parts to arrive, and they’ll appreciate the personal touch, especially if they’ve already had a negative experience with other eCommerce providers.
Likewise, if you encounter a shipping issue or other mistake with a customer’s order, own it! Apologize for the problem and work with the customer to make it right – this shows the buyer that you value their business and you’re willing to stand by your service, and simple gestures (for example, offering a coupon for a future purchase) can turn one-time buyers into repeat customers!
Additional Tip: Quotes
The RevolutionParts Quoting Tool is a great way to generate revenue from the constant barrage of phone calls most parts departments handle on a daily basis. If someone calls in to inquire about a part, use the Quoting Tool to collect their name and email address, then send them a quote via email for whatever part(s) they’re interested in. Shoppers can click a link in the email to jump straight to the checkout page, ensuring a smooth and easy buying experience.
The RP Platform will also enable your team to keep track of any open quotes, so they can follow up with those shoppers – and even if someone doesn’t purchase, collecting their information will enable you to market to those potential customers in the future, so you could still convert those shoppers into buyers!
Click here to Learn How to Create a Quote
Additional Tip: Canned Messages
Save time and build more efficient processes by using the Canned Message feature inside the RP Platform. Using the existing templates, or creating your own, will allow your team to quickly respond to the most common questions and scenarios without needing to create every email from scratch.
Click here to Learn about Canned Messages
Step Three: Marketing
Marketing is a necessary component of growing your eCommerce business
So you have competitive pricing and great shipping rates, and you have a strategy for ensuring the best possible customer experience. But you still need a mechanism for letting shoppers know you exist! If you had just opened a brick-and-mortar location, at the very least you would need to put a sign on the building to let potential customers know you’re there, right?
Unfortunately, you can’t really stick a fancy sign on your webstore, so you’ll need to adopt a different approach. A consistent digital marketing strategy has proven to be the most effective tool for attracting buyers and driving them to your store, and RevolutionParts has its own in-house Marketing Agency that specializes in OEM parts.
Our agency offers a variety of services, all designed to help drive traffic, increase sales and grow your eCommerce business. We average a 10x return on ad spend across all brands – so for example, if you spend $1000 in digital marketing, you can expect to average about $10,000 in sales volume.
Click here to learn more about our Marketing Services.
Regardless of whether or not you choose to utilize our Marketing Agency, there are a number of other tools available in the RP Platform that can be leveraged to continue growing your audience.
Featured Products
Featured Products are displayed on your webstore home page. We recommend updating the featured parts on a regular basis (approx. every 30-45 days) in order to show site visitors – and search engines – fresh content. Since your webstore home page is crawled more frequently than other parts of your site, refreshing this content regularly can help show Google and the other search engines that your site is being updated regularly, which can in turn provide a subtle boost to organic search rankings.
Click here to learn about updating Featured Products
Promotions
The RP Platform allows you to create discounts and promotions with a variety of different options. Promotions can be used to attract new customers with a limited time offering, and they’re a great way to bring previous customers back to your webstore. When used in conjunction with Abandoned Cart emails, they can even “win back” customers that didn’t make a purchase during a previous visit.
Click here to learn about Promo Codes