The majority of OEMs track their primary sales channels perfectly. They can measure results, make data-driven decisions, and create a strategy to drive more spare parts sales. However, OEMs rarely gain transparency into their secondary sales networks. They work on estimates and let distributors handle the rest.
The secondary sales network, inclusive of distributors and retailers, is an untapped area with huge potential. To enter these markets, OEMs may have to bypass dealers, which is a primary challenge as it puts the OEM-dealer relationship at risk. Still, gaining control of the secondary sales network is important to maintain pricing power in the market, identify consumer trends, and stay competitive.
In this blog, let’s take a closer look at some strategies that OEMs can execute to increase spare part sales through their secondary network.
Secondary sales channels are the growth engines that can help an OEM create a strong brand presence in the market and dominate competition. With a solid approach, OEMs can easily penetrate their retailer networks and boost sales.
To take control of secondary sales operations, it is essential to gain visibility into the market. OEMs should be aware of which distributor or retailer is selling which part and in what quantity. This can be done by creating a centralized system for distributor and retailer parts procurement. Both these parties can search for spare parts on this system and directly place an order through the OEM.
Intelli Commerce is one such system that can help OEMs in launching a centralized mobile app where distributors and retailers can place orders and track order fulfillment.
Even after implementing the aforementioned solutions, gaining 100% visibility into secondary network sales is impossible. This makes it difficult to forecast demand through sales figures. However, OEMs can still rely on quantifiable and quantitative research methods to forecast spare parts demand.
They can consider several factors, including:
Based on these figures, OEMs can prepare a rough estimate of secondary sales, and also do demand forecasting to meet any future requirements of secondary sales factors. By switching to consumption-based replenishment, OEMs can prevent overstocking and understocking, and also keep third-party spare parts at bay.
OEMs can officially register retailers by launching sales initiatives for them. This will help OEMs in tracking secondary network sales and encourage retailers to perform better. They will automatically start preferring genuine spare parts over duplicate parts.
The sales-based incentives can be of several types, such as international holiday trips, electronics, or other luxury gifts for top-performing retailers. OEMs can also give sourcing discounts or promotions on their official channels for other retailers.
Nevertheless, implementing such a strategy can be difficult. Sales figures can vary according to regional demand. Thus, incentives should also be regional. Retailers from the mid-sales volume region should not compete with dealers from the high-sales volume region.
To boost secondary network sales, OEMs can also switch to geo-specific pricing models. This can be done via multiple ways:
Competitive pricing can not only help improve sales figures but can also prevent third-party manufacturers from settling into the market.
OEMs often lose secondary channel market share in distant regions where it is difficult to fulfill last-mile delivery, even to retailers. In such areas, third-party manufacturers or local manufacturers take the lead, and OEMs lose significant market share.
A few solutions to ensure last-mile fulfilment are partnering with reliable logistics partners and local distributors. OEMs can set up micro-warehouses near remote regions to simplify shipping and logistics. Lastly, depending on their long-term vision and profitability, OEMs can set up manufacturing units near those areas as well, or partner with local manufacturers and suppliers to ensure stock levels.
After getting some control over secondary sales channels, OEMs can collect data and measure metrics like fast-moving SKUs, which SKUs responded better to discounts, regional consumption patterns, seasonal fluctuations, retailer performance, and retailer area coverage.
Based on this data, AI can help identify which retailers need stronger incentives, which need frequent stock replenishment, and which are weak secondary sales territories. OEMs can collect data in real-time and make data-driven business decisions to boost sales.
Intelli Commerce is a next-gen parts ordering software for secondary sales networks such as distributors and retailers. It helps OEMs streamline catalog management, ensure timely stock replenishment, and efficiently manage secondary sales channel orders. With advanced AI capabilities, Intelli Commerce helps boost sales and ensure seamless sales distribution across the entire secondary sales network.
Key Features of Intelli Commerce Include:
To remain a dominant player in the market, gaining control over secondary sales channels is important. It can help OEMs push away duplicate parts and third-party manufacturers, while ensuring part availability to distant regions as well. To boost secondary sales network performance, OEMs need visibility into secondary channel sales. With sales order transparency, OEMs can help dealers restock inventory in time and extend serviceability to distant regions.
1. How to increase secondary channel sales?
Answer: To improve secondary channel sales, OEMs first need to gain complete visibility into secondary sales data. This includes performance metrics of distributors and retailers. Based on their performance, OEMs can incentivize retailers, provide better procurement and restocking support, and even help distributors connect with last-mile retailers to increase sales. OEMs can even offer region-specific pricing and sales strategies to capture market share.
2. How to improve secondary sales data collection?
Answer: Today, AI enables the most efficient data collection and analysis. With the help of solutions like Intelli Commerce, OEMs can track secondary channel sales and inventory levels in real-time. They can do demand forecasting, predict stock levels, sales figures, and more. Based on their analysis, they can send timely reminders to their secondary sales network for carrying out sales strategies or simply replenishing stocks.
3. How to compete against duplicate parts or third-party aftermarket manufacturers?
Answer: Duplicate parts and third-party manufacturers are key concerns for OEMs. Despite selling unofficial spare parts, these providers offer lucrative pricing to customers and disrupt the consumer base. To effectively tackle them, OEMs need to figure out the regions where genuine part sales haven’t reached yet. They can improve their last-mile delivery, partner with local retailers, or even incentivize retailers with gifts and holiday trips to encourage genuine parts sales.
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