Matthew Ferguson explains what’s involved in selling salvage auto parts both domestically and cross-border
I am working on opening my own salvage yard business. I’ve worked at an auto salvage yard for eight years, so I know the business.
Do you think I should start selling used auto parts internationally?
— Terrell K., MS
Out of curiosity Terrell, how many unique objects do you find in scrapped cars? Dead bodies and narcotics come to mind…
eBay remains top dog as the online destination of choice for buyers
Assuming you want to sell parts specific to the car’s body, the online automotive industry has been growing significantly over the years. eBay remains top dog as the online destination of choice for buyers. They have an entirely separate “automotive” channel, and have spent time acquiring and integrating the needed fitment information into their core catalogue.
However Amazon, not the type to skip over an opportunity, has also been growing in this industry. A few of our automotive clients have branched into Amazon and are seeing positive growth. Its slower and smaller than eBay, but given the monster growth Amazon is fueling overall, it’s a safe bet their piece of this market will expand too. You can only sell new parts on Amazon for the time being.
Car part suppliers are growing their offerings as well, with off-brand manufacturing mod parts and replacements, often with strong results in areas where the product has a generic application across models.
I could waffle on… so let’s put it simply: yes, there is a big opportunity to sell car parts on marketplaces, including salvage. But what you need to do, in order to make a growing scalable business out of this, might make you cry.
Based on experience, there is a recurring problem people like yourself face in this business: data.
Data is expensive to get from leading fitment providers. PartsNetWeb has a vast database, but you have to pay to play. And their data isn’t the easiest to work with for the production and upkeep of marketplace listings. That’s being polite about it – it’s a nightmare of the highest order.
It’s not really their fault (well, a bit of it is) as they have the same constraints that their competitors face: manufacturers. Most companies fabricating these parts aren’t savvy on data generation and standardization. Many don’t have images you can use in a consumer environment. Most have no central database with all the product specification info. Very few have completely defined and continually updated fitment data.
It’s a data mess that is going to take years to fix, given the issue is at source and the manufacturers still haven’t caught up with the pace of ecommerce growth. But hold the tears as I’m just getting started.
That’s new parts. You are looking at salvage, meaning second grade (B-C grade) stock. That ideally requires details about its condition and usually images showing any defects. Applying a generic image and outlining the condition details is possible, but it’s an occasional risk for refunds, as buyers don’t always read the fine print.
In summary, you’ll have a tough time finding data online to use for listings without paying then playing in Excel.
The better the picture, the better the conversion.
You could alternatively make your own data for listings. This will prove arduous and time-consuming, especially given the fact each new part might be unique. Over a long stretch of time, you might have several versions of the same item, but their condition will be different.
You’ll need to take pictures of the items. The better the picture, the better the conversion. You can’t sell used parts on Amazon, but for new parts they require a high-quality formatting, so if you got into that you’d likely need to have images professionally cleaned once done.
You’ll need to build and maintain an inventory database. This might be a glorified Excel spreadsheet, or using a third-party system.
You’ll need to build out the data. A SKU, title, description, note on the condition and then – the fun part – defining the fitment information. If you skip fitment information, you likely will not sell as fast or as often.
You’ll need to ship these product out the door, so you need to think about packaging. Car parts tend to be oversized and/or heavy, and given the changing nature of your catalog, it will be tedious to define upfront your shipping price for each item. How you tackle rates for the different areas of the U.S. complicates matters further.
You’ll need to not cry during any of this work too.
All the above is needed for both domestic and international sales. However, international carries even further points to consider.
The industry is still playing catch-up with ecommerce growth and the global trading of marketplace sellers.
Fitment details change. You would need to be careful about how you list product for international models and fitments. Some car models are built differently in different countries, so the same part may not always work.
Countries have different laws too. Modification parts can be allowed in country A, but be illegal in country B. The laws and details are often not easy to decipher, because the industry is still playing catch-up with ecommerce growth and the global trading of marketplace sellers.
I haven’t even mentioned translations and price conversions yet, which need to be updated regularly as market currency conversions change faster than my teenage daughter’s makeup stylings.
Then there are the adding complexities of shipping internationally. Domestic shipping in the U.S. is tricky for your industry. I would highly recommend you spend time getting that right before opening the international element. Customs duties, shipping rates and courier issues where shipments get lost or delayed might all impact your account score.
And let’s not forget taxation from other countries… yeah, the tax man is everywhere.
Go big or go small, or don’t go at all
With great opportunity comes extra work. To get started, you’ll either need to log consistent extra time or hire someone. To run this long-term successfully, I would recommend:
- A documented data creation process and format.
- A third-party tool to log all product data and manage your listings / stock / orders.
- Starting out domestic only.
- Getting some help on this if you’re a one-man show.
However, that assumes you want to make this a big revenue-maker long-term and have lots to sell. If you simply have 10-15 products you want to try out, ignore everything I said. Just snap some photos, create the listings on eBay directly and see what happens. Check competitors for pointers and pricing strategies. Make sure you make it perfectly clear that it’s not new. The condition grading breakdowns can be found on eBay’s help pages.
I would highly recommend you test this out on a few products and gauge the time and effort for the reward. It all depends on how much or how little salvage you have, and how much new salvage you will want to list week-to-week.
Time will end up being the big factor in all this. The financial setup costs are small. But the systems, research and ongoing operations are going to suck up all that free time you didn’t already have.
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