Amazon's Sales Opportunity

Publish Date: 
Nov 1, 2008
By Joe Delmont

Manufacturers, retailers can get in on the action

YOU MAY HAVE NOTICED last month's announcement by Amazon.com that the Internet retailing giant is selling motorcycle and ATV parts and accessories to consumers. The company has launched a Motorcycle and ATV store at amazon.com/motorcycle.

What does this mean for you, the dealer? Are your manufacturers — OEMs and aftermarket — going to sell direct to your customers, in turn cutting you out of the profit stream? Possibly, but not likely; it really depends on the deal that you have with your suppliers.

The important thing is that this could be a great revenue opportunity for you.

Amazon's new online store features more than 300,000 parts from over 500 top manufacturers including brands such as Alpinestars, Corbin, Shoei and Joe Rocket, Fox Racing, Harley-Davidson, Kawasaki, Honda, Suzuki and Yamaha. How would you like to be selling all of these brands? None of the OEMs is selling direct — these products are being sold by Amazon and other retailers.

I called the company and talked with Heather Cartwright, who carries the title of category manager of Amazon's powersports and auto stores. Cartwright is responsible for building business at the two ventures. I also visited the Web site — which I strongly recommend you do if you're interested in knowing how Amazon's powersports operation works. The company does a nice job of explaining what you have to do if you want to participate as a retailer or a wholesaler. (For more information, visit this site: www.amazonservices.com)

The powersports store is an extension of the auto store which Amazon launched in October 2006. Auto seems to be working well, says Cartwright, but she declines to disclose any financial details. When it opened, auto had 1 million parts. Two years later it carries more than 4 million.

 

SELLING STUFF ON AMAZON

 

There are three ways consumers can buy products through the Amazon powersports store: They can get it direct from the dealer (that's good for you), or they can get it from the Amazon warehouse (that's bad for you because in this case, Amazon is a competing retailer), or they can get it direct from the manufacturer (that's bad for you, too, obviously). The third option is probably not going to happen. But if your supplier has his products listed on Amazon, ask how you can be listed as a seller on the site.

Distributors sell their products on Amazon. House brands of both Parts Unlimited (ICON) and Tucker Rocky (River Road) are being sold on Amazon through their dealers. The distributors make out well in those cases: They sell product to dealers who can sell them internationally through the Internet, possibly in a larger venue than they could ever do on their own.

The picture looks good for manufacturers because they can sell through several channels. Amazon can process the sale, collect the money from the consumer and pay the sellers. It charges about 12 percent, depending on the setup. All the fees are spelled out on its Web site.

In the one case where Amazon directly competes with powersports dealers, it purchases products from the manufacturer, pays for the product, takes delivery and stores the product in its warehouse, promotes the product in the Motorcycle & ATV store, completes the retail sales transaction with the final customer (including credit card processing), and then picks, packs and ships the product to the consumer.

When I checked last month, there were more than 50 sellers listed, ranging from Amazon itself to Adventure Harley-Davidson, Fay Meyers Motorcycle World, St. Paul (Minn.) Harley-Davidson, Motorcycle Accessory Warehouse, Northern Tool & Equipment, and World of Powersports. Several are dealers like you.

Fay Myers Motorcycle World is a Colorado franchised dealer of Aprilia, Ducati, Honda, Kawasaki, KTM, MV Agusta and Suzuki that seems to be getting some results on Amazon. But I can't tell for sure; nobody at Fay Myers wanted to talk with me about it. Afraid to share their success story, perhaps.

World of Powersports (WPS), based in Decatur, Ill., is another aggressive brick-and-mortar dealership that is big in the digital world. WPS is a franchised dealer for Honda, Yamaha, Kawasaki, Suzuki, Polaris, BRP, Arctic Cat and Triumph Motorcycles. Its profile on the Amazon site notes that it sells for Parts Unlimited, Tucker Rocky, White Brothers, Custom Chrome, Chrome Specialties, Motorcycle Stuff, Western Power Sports, and many others. Mike Jackson, one of the owners of WPS, long has been an early adopter of the latest Internet technology, so it's not surprising to see him in this venture.

 

CONSIDER IT

 

If you're a manufacturer and you don't have a distribution network, take a look at Amazon. There are several options for you there.

Bottom line, if you're looking for a way to increase sales through a custom Internet e-commerce platform — whether you're a dealer, distributor or manufacturer — take a look at Amazon.com. You might find an unusual digital solution that fits your business model very nicely, one that can boost your bottom line in this really tough business climate, and give you a nice competitive advantage.

Joe Delmont can be reached at jdelmont@dealernews.com or 952-893-6876.