There are three primary distribution channels for aftermarket parts and tire distribution:
traditional wholesale, retail and e-commerce channels.
Automotive Aftermarket Distribution Channels
Traditional Wholesale Channel. The traditional wholesale channel is the predominant
distribution channel in the automotive aftermarket. It is characterized by the
distribution of parts from the manufacturer to a warehouse distributor, to parts
stores and then to automotive service providers. Warehouse distributors sell
to automotive service providers through parts stores, which are positioned geographically
near the automotive service providers they serve. This distribution method provides
for the rapid distribution of parts. We have products and services that meet
the needs of the warehouse distributors, parts stores and the automotive service
providers.
Retail Channel. The retail channel is comprised of large specialty retailers,
small independent parts stores and regional chains that sell to “do-it-yourself”
customers. Larger specialty retailers, such as Advance Auto Parts, AutoZone,
Inc., and O’Reilly Automotive, Inc. carry a greater number of parts and
accessories at more attractive prices than smaller retail outlets and are gaining
market share. The business management systems used in this channel are either
custom developed by the large specialty retailers or purchased from business
systems providers by small to medium-sized businesses. We have products and
services that support the retail channel.
E-commerce Channel. Innovation in the e-commerce channel is taking place across
the automotive aftermarket supply chain. Both B2B (wholesale) and B2C (retail)
businesses are looking to leverage e-commerce technology to streamline their
sales, inventory and delivery operations. The increasing popularity of e-commerce
within the aftermarket is encouraging suppliers and OEMs to modify their business
models and participate in direct retail sales. It is also attracting traditionally
non-automotive participants, such as Amazon and eBay, to the industry. We have
products and services that support the e-commerce channel.
In addition to these three primary channels, some aftermarket parts and tires
are being distributed through new car dealers. The business management systems
used in this channel have unique functionality specific to new car dealerships.
We sell a small number of products into the auto service provider side of car
dealerships. Also, aftermarket wholesalers of parts and tires provide online
purchasing capabilities to some new car dealerships.
