Web sales of vehicle parts hit the fast lane
September 22, 2015 10:27 AM
Sales of online vehicle parts are expected to double by 2018 in the U.S. thanks to Americans driving their cars longer and doing more repairs themselves.
That’s according to an investor relations presentation from online vehicle parts retailer U.S. Auto Parts Network Inc., No. 136 in the Internet Retailer 2015 Top 500 Guide. U.S. Auto Parts’ data projects online vehicle parts sales of $6.60 billion this year, a figure that is expected to grow by 20.3% each year over the next three years to $11.5 billion in 2018.
“The online market is vibrant and growing,” U.S. Auto Parts CEO Shane Evangelist writes in the company’s latest investor presentation. “There is a strong opportunity.”
The company says future web sales look so promising because more drivers are choosing to keep and maintain their current car, truck or sports utility vehicle for longer periods. In 2000, the average vehicle operating on U.S. roadways was about eight years and nine months old. In 2014 the average age of vehicles on the nation’s streets, roads and highways was 11 years and four months, says U.S. Auto Parts.
To prepare for future growth and to take advantage of the healthy e-commerce opportunity for do-it-yourself vehicle parts sales, Evangelist says U.S. Auto Parts continues to diversify its inventory and introduce new products. Of its more than 1 million vehicle parts, about 50% are collision parts, such as bumpers, hoods and grills; 25% are engine parts and related parts such as brake disks or catalytic converters; and 25% are performance parts and accessories, including floor mats and bug shields. U.S. Auto Parts also expects to add up to 7,000 more private-label products this year, which will bring its total inventory of private-label parts to about 52,000.
“Private-label parts provide a significant competitive advantage,” Evangelist says.
U.S. Auto Parts also is diversifying its operation. In 2014 U.S. Auto Parts launched AutoMD.com, a website that links consumers looking to get a vehicle repaired with a network of certified repair shops. Today AutoMD.com has about 2,800 repair facilities that pay U.S. Auto Parts an undisclosed portion of the booked and completed vehicle repair charges and an undisclosed monthly fee to list on the site. Within the next year AutoMD.com could have as many as 4,500 affiliated repair shops, says U.S. Auto Parts.
But even as U.S. Auto Parts looks to the future the company is looking to improve its overall financial performance.
For the six months ending July 4, U.S. Auto Parts, which does not break out online sales, reported:
- Web sales of $139.6 million, up 7.7% from $129.6 million in the first six months of 2014, according to data from its Q1 and Q2 filings with the U.S. Securities and Exchange Commission.
- Total sales were $152.9 million, a 5.4% increase from $145.0 million.
- Net loss of $1.30 million compared with a net loss of $1.98 million in the same period last year.
- The web accounted for 91.3% of all sales in the first half, compared with 89.4% in the first six months of 2014.
“We saw progress during the quarter in the initiatives we have implemented this year and believe those initiatives will help drive improved profitability of our business in future periods,” Evangelist says.
U.S. Auto Parts hasn’t set a date for releasing financial results for the third quarter and the first nine months of the year.