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  • Find the Right Heavy Duty Truck Part

    We recently invited a focus group of parts buyers from organizations around the Bay Area for their views on the heavy duty truck part buying process – for both OEM and Aftermarket truck parts.  The findings were illuminating.  While each had a slightly different process, a few common themes stood out.

    Identify the Part

    Identifying the part!  This is the first step.  Our participants either called their local dealer or went online looking for the part.  This was especially true for older vehicles, where the part number could be superseded with a new number.  Once the part number is identified, the next step is to find the manufacturer - if the part is still being made.  These are the two key pieces of information that will uniquely identify the required part.

    Since each Class 8 truck is custom made, the Bill of Materials and the parts list is only contained along with the VIN information.  And so a lot of users simply call their local dealer to start the process of finding the right heavy duty truck part.

    Save Money Online

    However, as found that as with everything else, the Internet is fast becoming the tool of choice, especially among younger buyers of heavy truck parts.  With a few judicious searches and clicks, it is possible to quickly narrow down from the available options to a handful of candidates.

    Our focus group participants spent an average of 25% of their day hunting for parts.

    Now it is your turn.  How does it work in your organization?  Do you usually call the local OEM dealer or search online?

  • What is so different between B2B and B2C? Part 8: Serving online and traditional customers without channel conflict

    The e-Commerce world is infiltrating the heavy duty truck parts market faster than many companies may realize. One of the difficulties in getting a handle on this is because the range of heavy duty parts websites is so wide. There are very sophisticated e-Commerce sites that can handle your searches and purchases simply and quickly. On the other end there are lots of websites that have very limited or very frustrating search capability and confusing sites with no way to actually buy a part online. So the buyer’s experience can be anywhere from satisfied to complete frustration with e-Commerce. As with any new thing, the best sites will become the “go to” stores, and the others will either improve to stay viable or become just a placeholder. It is important to realize, however, that having just a placeholder site can negatively represent your company as competitors develop more user friendly e-Commerce sites. Sellers are confronted with how to build a truck parts e-Commerce business without creating serious channel conflict or causing negative impacts on their existing businesses.

    Like online sellers, the range of consumer buying patterns online is just as varied. Some buyers use the web just to get information but do little or no online purchasing. If they find something online, they prefer to pick up the phone to order. Others are more inclined to do most of their purchasing online. The latter group is very discriminating as to which sites they frequent.

    Ideally, good e-Commerce sites can provide real value for both buyers and sellers no matter what their buying preferences are. Sellers need an online solution that serves buyers who want to shop online without hurting their “bricks and mortar” business. In other words, they don’t want a channel conflict where online revenue takes revenue from their traditional business. Good online stores can provide valuable information from buyers who just want product information to those who want to make purchases online. e-Stores can also be a very effective channel to highlight specific brands, products, and technical information. Done properly, good e-Store offers “progressive” services to accommodate whatever level of participation customers want.

    Also, a complete e-Store can restrict the selling market area based on the geographical restrictions of certain product lines. By maintaining geographical agreements, the seller has removed all channel conflicts. Buyers get what they want, a good e-Store can be a very powerful complement to a seller’s traditional business.

    The heavy duty truck parts market is in the initial stages of e-Commerce and the reality is that it is developing faster than you may think. However, you can incorporate it into your business and use it for continued growth.

  • What is so different between B2B and B2C? Part 7: Progressive e-commerce: adding flexible power to the existing supply chain

    Progressive e-Commerce means e-Commerce in stages, depending on the objectives of sellers and the needs of buyers. It means that part buyers can still find sellers and parts without necessarily ordering online. Sellers can display their business, contact information, and parts just for local buyers if they don’t want to market nationally. Sellers can be more specific by displaying only a specific category, specific manufacture, or even a specific part number. They can display just stock information or show a price as well. In other words, e-Commerce should serve, not dictate.

    I think most of us in the heavy duty truck part world know that the transportation industry is not as quick to change as other industries, but there are some very good reasons for this. The life cycle of transportation equipment is very long so replacement parts must be available for many years. Also, product designs must last for decades and fundamental design changes tend to me more evolutionary than revolutionary. When you look at heavy duty truck parts, the way companies buy and sell parts reflects the very traditional patterns that have been established over decades. Fleets typically have long-term relationships with local parts suppliers. The suppliers know their customers’ need and the best see themselves as true partners in their customers’ businesses. They reach beyond their local borders only for availability.

    So why change these methods if products change slowly and the supply chain is firmly in place? Because even though the transportation industry may change slowly, e-Commerce is offering new efficiencies that can help fleets and truck part suppliers dramatically lower costs and improve profitability. Ignoring these developments can prove to be very costly for small and large fleets alike. The companies that take advantage of these opportunities will gain a huge edge over their competition. By adopting e-Commerce in some form, it becomes possible to see product availability, alternate parts, competitive pricing, and analytics all online. Parts buyers can now search for availability from a wide range of sources and locations which can significantly reduce equipment downtime.

    If that is true, why don’t all fleets and every truck part supplier adopt e-Commerce at lease as a secondary resource? One reason is that there is a misleading perception that e-Commerce is an “all or nothing” commitment where all proprietary information is laid bare for all to see and market geography is compromised. Sellers are reluctant to put their inventory and pricing online and many are not set up to ship out of their market area or compete with other sellers that belong to their dealer network. But the reality is that e-Commerce can be a powerful addition to buyers and sellers without disrupting the way the currently buy and sell parts.

    The Progressive e-Commerce solution. e-Commerce engines have become very smart and sellers can offer online sales that are tailored to each buyer’s preferences even as those preferences evolve. Online sites can offer the buyer telephone access, a marketplace in which multiple sellers participate, or an e-Store that represents one supplier and offers online inventory, pricing, a shopping cart, and payment options (including open account). Also, the online site knows where the buyer is located and can limit the search results to sellers that are within the market area of the buyer. “Progressive” means flexibility for the buyer and the seller. If a buyer moves from the telephone to full online e-Commerce, the ‘Progressive’ e-Commerce sites will be ready to serve.

    It is true that e-Commerce can expand a seller’s market area dramatically and it is also true that e-Commerce is going to account for a larger and larger share of fleets’ spend on heavy duty truck parts. Global Business to Business e-Commerce sales will exceed half a trillion dollars in 2013. But it also true that Progressive e-Commerce Services allow some buyers and sellers to continue business as usual and for others, they can take advantage of full featured e-Commerce.

    In the end, or perhaps better said, the beginning, online buying is here to stay, but if done right, it is here to serve the buyer the way he wants to be served. And as he progresses to more automated buying, e-Commerce will be ready.

  • What is so different between B2B and B2C? Part 6: Online B2B can deliver business intelligence

    This is the sixth in a series of blogs that talk about the major differences between B2C and B2B. The last blog talked about the value of Requesting Quotes on a B2B site (see link to blog). This blog addresses the value of Business Intelligence for sellers that comes as a result of having a B2B site. This blog is not so much about the differences, but how B2C is showing the way for B2B. In a nutshell, B2C sellers are getting smart. Very smart. B2B needs to do the same.

    When I owned a distribution business, we were constantly asked for truck parts that we did not have in stock or ones that we needed to special order. Not making the sale was one thing, but not being able to keep track of all of the part inquiries was another. Because the requests were random, spaced over time, we had no ability to ‘get smart’ about which parts were being requested multiple times, how often, over what period of time and by what kind of buyer. Because my company had more than one location, it was even more difficult to coordinate this kind of information. So lost sales just stayed lost, over and over again. And we were none the wiser.

    But B2C online sellers (Business to Consumer) generate a wealth of knowledge that comes by tracking all the searches and purchases as well as the profiles of their customers. Each time a buyer registers or searches, more valuable information is collected which can become very powerful analytical information to help your company improve its product line, its service, and customer loyalty. Companies learn not only what stocked parts are being searched and purchased, they also learn about what parts are being searched that they don’t stock.

    Good customer service people know their customers and become familiar with their buying habits and as a result, buyers become loyal for the long haul. But transferring that information or putting it in some form that management can use is very difficult unless all the questions all the information bout transactions can be gathered and processed into analytic reports.

    Online retailers have refined business analytics to the point that one large retailer can tell when a woman is pregnant often before she knows it herself. No kidding. Heavy duty truck parts may be a bit different than baby products, but analytics can provide truly amazing information for your company. For example, if there is a spike in searches for a particular product, perhaps because of a factory stock out, you may be able to offer and alternative part. Or if you find that some of your parts are being searched often but not purchased, you might learn that your prices are too high for them.

    Buyer profiles can be valuable. For example owner/operator parts buying patterns are distinctively different form larger corporate fleets. Fleets with multiple nameplates buy differently than fleets with primarily one nameplate.

    Online B2B sellers who take advantage of this treasure trove of information can gain a real advantage no matter what size they are. In fact, it is approaching the point that not having this information can be a serious disadvantage in the truck parts marketplace.

  • What is so different between B2B and B2C? Part 5: Finding local part seller and geographic coverage

    This is the fifth in a series of blogs that talk about the major differences between B2C and B2B. The last blog talked about the value of Requesting Quotes on a B2B site (see link to blog). This blog will talk about the value of being able to locate local sellers.

    Local availability of heavy duty truck parts is critical to keeping trucks on the road and not in the shop. Local sellers provide knowledgeable parts people as well as part delivery, not to mention the fact that they help the maintenance shop keep its own parts inventory to a minimum. No matter how effective online purchasing becomes, this cornerstone of parts supply will continue to be a most important solution to maximizing equipment uptime.

    However, online B2B can play an important role in helping a part buyer find local sellers that he may not realize have the part he needs when his primary supplier is out of stock. For example, if a buyer is looking for a Navistar part and his local dealer is out, he might find an alternative part sold by either an aftermarket or a different OE brand. Navistar, Freightliner, Kenworth, Peterbilt, and Volvo all sell identical parts under different numbers and access to a cross-reference database can provide the part numbers. Once you know the alternate part numbers you can search for those local sellers. A good B2B site should provide alternate part numbers to the buyer and sources of supply for those alternates.

    Most of us who use the internet have our favorite sites that we are familiar with and can navigate easily. Online B2B truck part buying is no different. If you find a site that is set up to make your search and purchasing easier, it will likely become a favorite. A website that can help you find a competitive price as well as local inventory through alternate parts might well prove to be a time and money saver.

    Local truck part sellers are primarily interested in serving a local customer base, however, it will probably surprise us to realize that there may be more local supply than we realize. A good online B2B site should offer this information as part of its overall offering to become a more complete resource for the truck parts buyer. B2B for heavy duty truck parts is evolving but like other industries, it will certainly become an important method for parts procurement. As B2B offers more and more solutions, more and more buyers will adopt it as a preferred means of finding and buying even local parts.

  • What is so different between B2B and B2C? Part 4: Requesting quotes

    This is the fourth in a series of blogs that talk about the major differences between B2C and B2B. The last blog talked about why alternate parts are important for a B2B buyer (see link to blog). This blog will talk about the value of being able to request quotations from multiple sellers.

    Being able to request quotations from multiple sellers is a bit like going to one of the comparison shopping sites like Buy.com. A heavy duty truck parts buyer has a couple of reasons for wanting a quote. First, the part might be expensive and worth comparing prices. Second, the buyer may require a larger than normal quantity and is looking for a quantity discount.

    Whatever the reason, an online B2B shopper needs the ability to request this information without having to make a phone call. Also, the buyer must be able to track his RFQ’s so that he can make sure they are being processed and responded to. Visibility is really important for this buyer. He submitted the RFQ and is waiting for a response and will have much more confidence if the status of his request is completely transparent. This can be the difference between winning a new loyal customer and losing one.

    Once the buyer submits a RFQ, the seller must have a process to locate the part(s), get pricing and availability, and respond to the buyer via email or text. Each RFQ must have a tracking number so the buyer can manage the RFQs that he is currently waiting on. One clear value of being able to place RFQs online is time savings. A parts buyer could have any number of RFQs out with many sellers and not spend one minute on the phone. If you consider that the real cost of the part also includes the time it takes to buy it, the result is a much cheaper overall cost. The advantage for the seller is also lower cost. Online RFQs come in via email and can be responded to either through its website or email which is a much more cost effective way of handling volume.

    Request for Quote is a key part of complete customer service and important for a B2B site to be successful.

  • What is so different between B2B and B2C? Part 3: cross-reference and alternate parts

    This is the third in a series of blogs that talk about the major differences between B2C and B2B. The last blog talked about why managing part numbers are critical to successful B2B. This blog will talk about the importance of cross-reference and alternate parts.

    When an online consumer searches for a product, like a blender, they may be shown several different blenders made by different companies and for different prices. Fortunately there are often user reviews so the buyer can get some information about quality and service. Or they can go to a shopping comparison site and compare retail prices for one of the products. Once they decide what they want, they can pull the trigger and buy the one they want.

    Heavy duty truck parts buyers on the other hand, need options for the same form-fit-function part especially if the truck is down. An accurate alternate part might be just the thing if the OE part is not available. When he or she enters a part number in an online store or marketplace, getting back alternate parts will provide him or her valuable information in one search. There can be can be a dozen part numbers out there for the same part and having this information can save the buyer downtime, part searching time, and money.

    Where does this cross-reference information come from? A B2B online site must have access to a database of part cross-reference information. When the buyer enters a part number into an online website, the search engine will look at the parts database for the available cross-references and display those back to the buyer. A valid cross-reference is one that crosses all part numbers to the component manufacturer part. To maintain a good cross-reference database, new parts must continually be added.

    Consumer online shoppers may not care in what country a product was manufactured. However, business shoppers may be very concerned about buying only domestic products, especially in the Heavy Duty truck part market. It is important that alternate parts reflect the buyer’s preferences.

    Clearly, offering good alternate parts is challenging but the value for the buyer can be huge.

  • What is so different between B2B AND B2C? Part 2: Part number search

    My previous blog talked about the significant differences between successful B2C and B2B which have a lot to do with why online B2B has grown more slowly than B2C. The next series of blogs will address each one of these differences specifically. Whether you are buying or selling parts, understanding and managing these issues is critical.

    Let’s compare buying a sweater online with buying a D2 Governor online. You can find a sweater on your favorite e-Store like Macys.com or Market Place like Amazon or eBay. When you search for the sweater you care about brand, color, size, material, and so on. Most likely, you don’t care what the part number is or where it ships from.

    Buying heavy duty truck parts, like a D2 Governor, on the other hand, requires much more information to make sure the buyer is getting the right part, from an acceptable seller, and at the right price. First, this part may have multiple part numbers because of several reasons. One is that the part might be made by different manufacturers. Second, it will have different OEM numbers. Third, each OE Dealer might give it a unique part number, often by adding a prefix or suffix. And lastly, aftermarket sellers may give it yet another part number.

    And there is another part number that you may have: an incomplete part number. A buyer may have only part of a part number or one that contains characters that really shouldn’t be there (like a dash).

    With all of these possibilities, it is important that B2B search engines be able to wade through this list and give the buyer some result besides “no results found”. There are two main pieces to managing these searches. First, search engine to look beyond the part number format such as dashes and slashes, and to be able to give options for an incomplete part number. If you know only part of a number the search engine should show you the different options. Even better is if you can filter searches by manufacturer or product category, like “brake system”.

    The second is to compare the part number search against a cross-reference database that contains at least some of the part number options. Often a buyer can use a part whether it is marketed by more than one company. The ability to find parts online with a partial part number and get several options to choose from can provide huge value for the buyer who needs a part right now, not to mention for a good price.

  • What is so different between B2B and B2C? Part 1

    Many of us, if not most of us, have purchased something online, either from an e-Store or a Market Place like Amazon or eBay. In fact, online spending is capturing a larger and larger share of the consumer dollar. Which brings me to the question that we at PartsRiver have been asking. If B2C (Business to Consumer) is growing so quickly, why is B2B (Business to Business) lagging behind, especially in the heavy duty truck parts market? Is it just because companies have purchasing processes in place and don’t want to explore other channels? Is it because B2B offerings are limited?

    Our research tells us that there are some significant differences between B2B and B2C which require another level of capability to successfully manage online B2B sales. These differences are challenges, but ones that present real opportunity to companies that manage them. Here is a brief list. I will address each of these in more detail in future blogs.

    • Part number search – Unlike buying a sweater on a consumer website, truck parts buyers need a correct part number. A B2B website must offer a part number search that can handle partial part numbers, imbedded part numbers (part numbers that have prefixes and suffixes).
    • Cross reference parts - There is typically more than one part number for a specific part. The component manufacturer number, the OE number, several aftermarket numbers. It is important that a site has this cross-reference information as part of its search.
    • Quote requests – Companies often require multiple bids prior to buying to ensure that they are getting the best price for the truck part. They need to be able to request quotes from multiple part sellers.
    • Find local sellers – Unlike B2C where buyers may have no idea nor do they care where their new sweater is coming from, truck parts buyers often need the part very quickly and need to buy the part locally.
    • Geographic coverage – Some Parts sellers, such as dealers have specific geographical responsibilities and want to limit their sales to this market area.
    • Purchase orders – Many companies must issue purchase orders, both for individual orders and for blanket orders or annual contracts.
    • Sales tax exemption – B2C sales are almost always taxable. Many B2B purchases are tax exempt. There may be taxable and non-taxable items on a single order.
    • Custom pricing – Truck parts sellers offer customer specific pricing based on contracts, quantity discounts, and annual purchases. They don’t necessarily offer a ‘published’ or ‘list’ price.
    • Approved product, manufacturer, supplier – Fleets often have approved products and do not allow purchases of other brands. Buyers often must buy from approved suppliers.
    • Price breaks – Price breaks are offered for higher quantity purchases. Online part ordering must calculate pricing based on these criteria.

    These conditions are not trivial and present a challenge for B2B online sales, but they can be dealt with. As online sites become more sophisticated and manage these requirements, B2B will start catching up to B2C.

    My next blogs will dive deeper into the specific requirements and how they can be handled. In the meantime, I welcome any comments or thoughts that you have.

  • Does expanding your sales market reduce your cost of sales?

    Expanding sales geography can move a company into a new level of revenue but along with it will come a new level of operational and infrastructure challenges. For many companies that sell heavy duty truck parts to a local market, they are seeing the growth of a new way of doing business: online parts sales. Most of us have purchased a consumer product online, however, online truck parts sales are just beginning to take advantage of this new channel. As a result many parts sellers are wrestling with developing a strategy that services their local customers and offers an online store to service both local and a larger geographical market. If done right, a seller can see a significant increase in sales; however, they experience growing pains to accommodate this new business.

    What are some of the “Nuts and Bolts” things to consider when developing a “bricks and clicks” strategy? Here are a few that are critical for success.

    • Shipping – If much of your business is delivered by your company, you may need to beef up your shipping infrastructure and processes. These include physical space, packaging that will withstand shipping, and training employees. This may also be the time to invest in equipment such as bar code readers, electronic scales, and other efficiency equipment. Much of it will integrate seamlessly with your ERP system. For heavier shipments, there are some online freight sites that will provide shipping quotes and process a shipping order.
    • Shipping costs – You will need to calculate shipping costs at the time of order, not at time of shipping because many online customers will be paying for the product as they complete the online order. This will require building product weight into the catalog so your e-Commerce store can calculate the shipping cost.
    • Customer service for online customers – Having good, knowledgeable customer service people available to help online buyers is critical. Buying commercial truck parts is more complicated than buying consumer goods or automotive parts. Customer service people need to be knowledgeable about parts and how your online store works.
    • Online catalog management – An online catalog is a dynamic product and resources must be committed to keep it up-to-date. Parts will added, deleted, superseded, discontinued and so on and you will need a process to ensure that the catalog is continually updated. Buyers will keep coming back to online stores that have accurate information including pricing and availability.
    • Descriptions – Part descriptions must be accurate and thorough. So many descriptions, even from the manufacturer are terrible and don’t help identify a product.
    • Pricing – Create an ‘online’ price strategy that won’t undermine your existing customer base.

    These are just a few of the things that need to be done. They will cost resources to complete and put in place, but once done, they can help you develop new markets. To do a cost – benefit analysis is fairly straight forward. Once you figure out the costs of putting these things in place, you can figure out how much gross margin you will need to pay for them. Some are onetime expenses and some are ongoing.

    The exercise is worth the effort since online selling will experience very significant growth in commercial trucking over the next few years. Those companies that make the effort to do it right will be the winners.

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