Amazon Leading Online Car Parts Sales, But Dealers Still Have An Edge

Business is booming for anyone selling car parts and accessories online in the US, with forecasts saying that there’ll be at least $12bn worth of sales by the end of 2019, which is double the number reported in 2015.

The explosive growth in the online car parts market have given some manufacturers, dealerships and car parts companies, like EBC Brakes, a chance to expand their businesses, but Amazon Inc. managed to get the biggest slice of the pie.

Hedges & Co., a digital marketing agency in the US forecasts that the e-commerce giant will likely capture about 2/3rds of the online car parts market in 2019, with company founder and owner Jon Hedges saying that Amazon’s market share has gone up faster than the overall numbers of the market.

That being said, Mr. Hedges says that dealerships and parts manufacturers like EBC Brakes have an edge, as they can still build their online sales presence outside of Amazon’s reach, which he states can be done via their easy access to original parts, reliable and extensive warranty provisions and protection provided directly, as well as the technical expertise of the staff and the strength of the brand itself.

About two-thirds of the car parts that are sold on Amazon are sold by the e-commerce giant itself, acquired directly via its warehouses and suppliers. The rest, meanwhile, are sold on the Amazon Marketplace, which cover third-party sellers that operate their businesses in Amazon for a fee paid to the e-commerce giant.

A Phoenix company owner, James Windrow; RevolutionParts Inc., note that Amazon takes a 10% cut from tire-and-wheel sales, while everything else gets a 12%.

He says that a lot of parts manager know of the business that’s happening on Amazon’s platform, but some don’t bite because of the cuts that the platform provider takes.

Hedges estimate that, with more and more sellers becoming involved in the Amazon Marketplace, the annual total value of car parts sold on the platform by third-party sellers is expected to hit around $4bn. On top of that, they note that Amazon focuses its sales on high-volume, commonly available parts like tires, and brake pads, while relying on its partners in the Marketplace to provide the lower-volume and niche parts.