Ibrahim Mesbah

CEO & Co-founder | RevolutionParts

Ibrahim Mesbah is the founder of RevolutionParts, an eCommerce solution that helps dealers transform the way parts buyers and sellers connect. Before the founding of RevolutionParts in 2013, Ibrahim worked in software development for both Inter-Tel and PayPal. Now, he is responsible for bringing easy-to-use products to life, designing web applications that scale, building and running high-performing teams, and managing large-scale software products. Ibrahim is on a mission to disrupt and innovate the automotive space by creating the most active parts network in North America and has led RevolutionParts to over 1,500 customers with over $1 billion in parts and accessories sales.

Upcoming Recession? Embrace This Overlooked Profit Center!

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There has been growing speculation about the possibility of another recession, and experts seem to agree that they aren’t entirely sure if a recession is imminent. Historically, major economic downturns have led to challenging times for many businesses, including dealers. However, dealers can learn how to prepare for a potential recession by embracing an overlooked profit center: the parts department. The automotive industry was among the hardest hit during the recent Great Recession (2007-2009). More recently, the COVID-19 pandemic and supply chain disruptions have presented additional economic hurdles. Despite the financial challenges posed by the pandemic, numerous dealerships have found creative ways to boost revenue and grow their operations. A particularly effective strategy has been establishing a robust online presence for the parts department, which has not only helped overcome pandemic-related difficulties but also catered to rising consumer demands. According to NADA, in 2020, dealerships across the country saw a $6 billion decrease in parts sales. Data from RevolutionParts shows that dealers selling online saw an average increase of 27% in online parts and accessories sales during that year, highlighting how dealers can leverage online sales to offset tough economic times. So, why did RevolutionParts dealers enjoy an average increase in online sales amidst an economic downturn when many other dealers faced financial challenges? Because they were selling parts online during a time when few people were leaving the house, and most of all, because they were able to sell parts outside of their local market. Additionally, if we look at historical data, recessions often trigger an increase in parts sales. During the Great Recession, auto parts retailers like AutoZone, Advanced Auto Parts, and O’Reilly’s Auto Parts showed how resilient the parts industry is. While the stock market drastically fell by over 50%, stocks for companies like AutoZone and Advanced Auto remained steady. On the other hand, O’Reilly’s Auto Parts only dipped 10% in the beginning before seeing the start of immense growth in 2009 (see images below) and saw a massive increase in sales during this time, taking their annual sales from $2.5M in 2007 to $5.7M by the end of 2011. Why Recessions Give Auto Parts Retailers a Boost When a recession hits, the need for auto parts increases, especially for used cars, as the average age of vehicles in operation increases. This is because when people fall into hard financial times, they stop making big purchases, like new vehicles. While this presents bad news for dealers trying to sell new cars and seek a supply of trade-in vehicles, it can mean an opportunity for more parts sales. In an effort to save money, consumers are likely to hold onto their used cars longer. Older cars need more maintenance and repairs to stay on the road than newer cars, resulting in a higher demand for replacement parts. So what is different today compared to 2007? Today, consumers are more likely to shop online than during the Great Recession, a habit reinforced by the 2020 pandemic. Today, 74% of parts shoppers begin their research online, according to Hedges and Company. If another recession occurs, more people will be in need of auto parts, and the first place they start their search is online. Dealers have a unique opportunity to capture these parts buyers and drive more revenue to the dealership. Here are some key benefits to embracing your most overlooked profit center and developing a strong parts eCommerce strategy: Diversifies Revenue By expanding business operations to include online parts and accessories sales, a dealership can diversify its revenue streams and reduce its reliance on traditional in-person sales, which can be negatively impacted during a recession. The COVID-19 pandemic highlighted the importance of diversifying revenue streams. During economic uncertainty, relying solely on traditional in-person sales can be risky, as demand may decline or supply chain disruptions may make it difficult to acquire and maintain steady inventory. Online parts sales can help dealerships reach customers outside their local market. This can be particularly beneficial for dealerships in areas with a small population or limited demand for new vehicles. Increases Parts Accessibility Selling parts online makes it easier for customers to purchase the parts they need, regardless of location or time of day. This can increase sales and customer satisfaction, as customers now expect convenience and accessibility when purchasing goods and services online. By offering parts online, dealerships can meet this demand and provide quality customer experience. Maintains Low Overhead Costs By offering parts online, dealerships can increase profitability without having to add more labor or fixed inventory costs. Selling parts online allows you to sell more parts with fewer staff members than the traditional in-person sales model, as orders can be processed automatically through an online platform. You also can avoid investing in a larger inventory by simply selling what you have on hand and only ordering from the manufacturer the products that have already been ordered. This can help maintain low labor costs and increase the dealership's efficiency during economic uncertainty. This can also help a dealership maintain its sales growth even when understaffed or with limited capital available to invest in additional inventory, which is needed to support traditional parts wholesale channels. Gives You a Competitive Advantage Dealerships that offer parts for sale online can gain a competitive advantage as customers increasingly expect this level of convenience and accessibility. In today's highly competitive retail market, dealerships must stand out from their competitors in order to successfully grow their sales. Offering parts online can be an effective way to gain a competitive advantage and attract customers by providing a level of convenience and accessibility that is highly valued. Ideally, dealers should offer customers the features they expect from a best-in-class eCommerce experience, including multiple payment methods such as credit card and installment options, plus delivery options, including same-day, next-day, and ground service. Provides Better Customer Insights Online sales platforms can provide dealerships with valuable customer data, including purchase history and buying preferences. By analyzing this data, dealerships can better understand their customers and tailor their sales and marketing strategies to meet their customers’ needs. They can even reach out to parts buyers to engage them with marketing campaigns for their service lane offerings. This can help dealerships improve long-term customer satisfaction and loyalty, which can be crucial during challenging economic times. During a time when vehicle owners are keeping their cars for longer and trying to save money, selling parts online and embracing your most overlooked profit center could be the key to recession-proofing your dealership. Overall, the benefits of selling parts online cannot be overstated for dealerships looking to thrive in the face of economic uncertainty. By offering an additional revenue stream, increasing customer accessibility and convenience, maintaining low overhead costs, and gaining a competitive advantage, dealerships can expect to maintain profitability during hard times.
Establishing Connections Through the Parts Department

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Creating connections with customers is vital for any business to thrive, whether you are trying to acquire new customers or sell to existing ones. By selling parts online, the dealership can connect to a wider customer base that expands across the country. This can provide additional revenue and help it build loyalty for the dealership and the OEM brand. The sales department often comes to mind first when we think of establishing connections with customers and building relationships. If a dealership wants to drive new opportunities, it will need to seek new ways to make connections with a broader customer base.  The parts department is often one of the most underutilized departments in the dealership when it comes to making connections with new customers. The dealership can expand its reach to customers nationwide through the parts department, breaking through localization barriers. It can do this most effectively by becoming the center for online sales.  The online parts market is thriving. In fact, it’s expected to reach  22 billion dollars by the end of 2023 , according to Hedges & Company. Despite the high demand for online OEM auto parts, most dealerships do not have an online parts business. As a result, many of these dealerships have difficulty establishing a strong network of customers. Connect Nationally by Selling Parts Online Adding online selling channels helps your parts department connect to more customers outside of your local market. Creating an online parts business also opens up new revenue opportunities and helps future-proof your department against local and national economic challenges. Dealerships may also find it valuable to sell through today’s biggest online marketplaces, like Amazon and eBay. Dealers that relied solely on brick-and-mortar sales took a major hit during the start of the COVID-19 pandemic in 2020. According to NADA,  parts departments across the United States lost 6 billion dollars in 2020 . The business that came through their typical in-person buyers had plummeted.  However, dealers who sold parts online with RevolutionParts saw a  27% increase in online parts sales . When most parts departments were experiencing layoffs, dealers partnered with RevolutionParts were hiring more staff to support their additional sales growth. The flexibility of selling online allowed them to grow their customer base at a low cost. These dealers were able to increase their business because they were able to make convenient connections with a wide scale of customers. They were also able to provide a safe shopping experience for their customers, helping them establish a trusting customer base that would continue to grow long after COVID restrictions were lifted. Build Strong Local Connections for the Entire Dealership Aside from establishing a parts web store or uploading inventory to online marketplaces, dealers should sell parts through their dealership website. This is valuable for local retail and wholesale customers.  Local consumers can go online to evaluate prices, see availability, and order OEM parts without needing to call or visit the parts department. Offering convenient pickup or delivery options can help further secure business from your local customers.  This can be especially effective for growing your wholesale customer base. Make it easy for them to view your online inventory and more, help them get quotes on prices instantly, and check for part availability without having to pick up the phone. By providing a convenient shopping experience, you help both your department and your customers save time.   Giving local customers a positive online experience can build loyalty for the entire dealership. Those that purchase parts online will be more likely to return to the dealership for parts installations and other services. Getting that customer to the dealership increases the likelihood that they will return to purchase their next vehicle, leading to more revenue and a higher absorption rate for the dealership.  Don’t Overcomplicate Online Connections It’s expected that over  274 million Americans  will make online purchases in 2023. If your dealership is not selling parts online yet, you should make it part of your overall strategy to grow revenue, build brand loyalty, and expand your business. It’s time for dealerships to invest in parts eCommerce to drive connections for their local and national parts buyers. 
eCommerce Has Permanently Disrupted the Way New Car Dealers Sell OEM Parts

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Over the past two decades, retail has drastically changed with the rise in eCommerce. Compared to other sectors, the automotive industry has been slower to expand into online sales. Even slower has been the adoption of eCommerce strategies in the parts department. Traditionally, the parts department has relied on customers walking through the door and driving up to the service lane, or in some cases on local repair shops and collision centers ordering parts for their customers. In the past, consumers seeking out an OEM replacement part for their vehicle would have to physically come into the dealership, and parts were looked up in a physical or PC-based parts catalog. As an online presence became a vital component for businesses to flourish, dealerships created their own websites to better serve vehicle buyers and attract new ones, and later they even added new tools to allow customers to book service appointments online. However, the ability to browse parts and order online was rarely integrated into these sites. Even today, in 2022, the majority of dealerships do not provide an online option for consumers to browse or shop for parts, with only a quarter of new car dealerships selling parts online.  Instead, most parts departments continue to rely on old selling methods, including a parts form that online visitors can fill out to request information about a part. This form results in few conversions and is seen by consumers as inconvenient and impractical - even when they receive an actual response from the dealership.  Although only a fraction of dealers are selling online, it is becoming increasingly apparent that this is where the industry is heading, with more dealers adopting parts eCommerce strategies. COVID-19 Solidifies the Importance of Parts eCommerce If the shift in selling online wasn’t apparent before 2020, it quickly became a central strategy for many franchised new car dealerships as COVID-19 hit and the world began to shut down. In the U.S., businesses across the country closed their doors, and consumers went into lockdown. Even in states where stay-at-home orders were not adopted, and areas did not shut down, dealerships still saw a sharp decline in business.  In 2020, parts departments in the U.S.  lost $6 billion  in parts revenue, and new car sales  dropped by 15% .  Many dealerships found relief in their online parts business to combat this sharp decline in business. During the shutdown, many people use the time to repair their own vehicles or begin new projects. This led to a rise in the demand for car parts.  According to a 2020 eCommerce report from RevolutionParts, dealers selling parts online actually saw a  27% increase  in online parts sales, despite the economic challenges.  The pandemic accelerated the shift to online shopping by more and more people. As restrictions lifted and people began to return to normalcy, one habit that most people are holding onto is shopping online. In 2022, over 230 people in the U.S. made purchases online. In the automotive industry, the shift to online shopping has been drastic. Before 2020, only 32% of consumers felt open to purchasing a vehicle online, but this number has since  risen to 61% .  The impact of parts eCommerce doesn’t just impact parts being sold online, it also affects those being sold over the counter. According to Hedges & Company, regardless of whether a consumer purchases online or in-store,  74% of all parts purchases  begin with an online search. This means that people are not just shopping online for a part, but they are researching where they can get the best price, who has the part in stock, and how fast they can get it. If a dealership does not have a way for consumers to conduct this research, the probability of being passed over is high. New Opportunities for Franchised Automotive Dealers and Manufacturers The challenges dealers began facing in 2020 are far from over, as we are now dealing with the fallout of the pandemic and  worldwide supply chain issues  that have threatened the supply and production of new vehicles and auto parts. However, just as dealers were able to combat pandemic challenges in 2020, dealers who are selling parts online are now using these same strategies to mitigate the impact of the damaged supply chain. Creating an online parts business allows individual dealers to expand their customer base and reach parts buyers across the country and internationally. This means complete reliance on the local market has been eliminated, as new online revenue streams have been established, including selling parts through the dealership website, a separate parts web store, or through an online marketplace such as Amazon or eBay. Not only that, dealers can deal with obsolescence or aged inventory challenges by listing parts where they will be searchable by buyers who need them. Manufacturers have also understood the major opportunity eCommerce presents and often provide sponsored solutions to allow dealers to sell their OEM parts online through official parts eCommerce programs. Dealers and manufacturers know that they cannot compete with the aftermarket via traditional methods only. If they do not add their products to the online market, then consumers will no longer benefit from the opportunity to buy their higher quality products, and they will miss out on sales that go straight to aftermarket vendors and resellers. With the average vehicle age continuing to increase each year and the lack of availability of many new vehicle models, owners are looking to buy parts to maintain their vehicles longer and many even make upgrades to older vehicles Offering parts and accessories both online and over the counter gives dealers a multichannel strategy commonly used across industries to attract new customers and tap into this growing segment of second, third, or fourth owners of vehicles who would otherwise buy from the aftermarket.  The online parts market also grows larger every year, presenting new growth opportunities for franchised dealers and manufacturers. Most consumers today incorporate a hybrid form of online and offline shopping habits, meaning the method of selling products strictly over the counter is outdated and will prevent
Mobile Shopping is Impacting Online Parts Sales

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For millions of people, shopping online has become the preferred method, especially over the past two years since the start of the pandemic. However, just because things have begun to look more normal doesn’t mean people are giving up their shopping habits. The rise in online purchases across all retail industries has caused many retailers to pivot their strategy to a fully optimized buying experience. This pivot has not escaped the automotive industry as new franchised dealers turn to eCommerce to drive additional revenue. However, recent data also shows that if dealers want to maximize online efforts, they need to keep the mobile experience in mind.   Don’t Ignore The Data A recent report from  RevolutionParts  that looked at the shopping behavior of over 100 million online parts shoppers showed that nearly 59% of consumers shopped for parts through a mobile device, marking a nearly 5% increase in mobile shoppers from 2020. Mobile users spent an average of $168 in parts orders and made up a little over $204k in total revenue for dealers signed up with RevolutionParts in 2021.  Not only were more shoppers searching for parts through mobile, but they were also purchasing more often, with 1.2k transactions made through mobile compared to 1.1k transactions made through desktop.  Although in 2020, we saw more shoppers searching for parts using mobile. However, 2021 marked the first year more consumers completed their purchases through mobile devices. What Does This Mean For the Parts Department? The dealership’s online parts business needs to be mobile-friendly. This rise in mobile purchases means dealerships will have to include mobile shopping in their online parts strategy and understand their customer’s mobile shopping experience.  Building an online parts business where the mobile experience is lacking will cost the parts department sales. Ignoring the data in the report mentioned above could lead to losing half of the department’s potential online sales. To ensure customers have the best online shopping experience when shopping from their mobile device, you need to make sure that the mobile version of the parts web store meets specific criteria. Otherwise, when a customer lands on the parts website, they may not know how to navigate the site to find what they are looking for, or they may have difficulty inputting their information and checking out. A poorly made mobile version can also confuse mobile shoppers, especially if it is visually unappealing, the text is difficult to read, or links don’t work. When building an online parts business, there are certain qualities you want from the mobile version of the website:  -       Easy to navigate  -       Quick load time -       Text is easy to read -       Visually appealing on a small screen -       Links are easily clickable -       Forms are easy to fill out Ensuring an online parts store is mobile-friendly is a must. A mobile-friendly parts site with these qualities is more likely to increase parts sales and deliver higher customer satisfaction.  Mobile shopping isn’t the future of shopping; it’s already here and growing. If the parts department wants to build a successful online parts business and capture more sales, the data shows that implementing a mobile-friendly shopping experience is a must. Get the Full 2022 eCommerce Shopper Behavior Report The RevolutionParts  2022 eCommerce Shopper Behavior Report  gives parts sellers insight into the behavior online auto parts customers, devices they shop from, how much they are spending, and demographics. To view the full report, visit: https://www.revolutionparts.com/  
Supply Chain Issues and Inventory Challenges For Franchised New Car Dealers

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The automotive industry has experienced a variety of challenges since the beginning of the pandemic, and with ongoing supply chain issues impacting inventory, OEMs and dealers are encountering new obstacles at every level.  New Vehicle Inventory Challenges The current supply chain issues are limiting the amount of new vehicle inventory produced and supplied to dealers. As every dealer knows, this leads to low availability of new vehicles, high prices on new and old vehicles, and a rise in older vehicles remaining on the road.  Issues in the supply chain are also leading to mass amounts of unfinished vehicles being produced and waiting on chips. To combat this, some manufacturers have decided to produce and sell, at a discount, “unfinished” vehicles, with the idea that dealers can install the missing chip components as they become available. Other manufacturers have opted to drop popular features to increase sellable inventory, including rear-climate control, automatic start-stop features, wireless charging, hands-free driving, and HD radios.  For example, according to  Automotive News , Ford will soon begin to ship and sell vehicles missing non-safety-related chips that can be installed at a later date. These missing chips control things like rear-seat heating and air conditioning and auto start-stop features.  With more used cars being sold and some new vehicles being sold “unfinished,” this will mean more, potential dealer-installed options. These missing parts will need to be installed as inventory is available, and older cars will need to be maintained to remain on the road.  The Rise in Used Vehicles Inventory issues are also having an impact on the vehicles currently on the road. Due to the rise in vehicle price and inventory challenges, consumers opt to keep their current vehicles longer or purchase used. This means more used cars are on the road than ever, with the average vehicle age nearing 13-years old. Over time, wear and tear on vehicles lead to more part replacements. They also don’t run as efficiently as newer vehicles and require more maintenance, such as more frequent oil changes. It is estimated that vehicles that are a decade old cost twice as much to repair and maintain yearly than a vehicle that is just five years old. These aging cars represent a great amount of  potential growth the fixed ops side of the dealership as more people will need parts and service as their vehicles age. Roadblocks in Parts Inventory Along with a disruption in new vehicle inventory, there is also a disruption in the supply of automotive parts (more specifically, materials). Dealers and repair shops are struggling to source some of the parts their customers need, resulting in vehicles taking weeks and sometimes months to repair.  The ability to communicate with customers is critical. Be honest with them and let them know if they can expect delay issues on specific parts. If a delay comes up unexpectedly, let the customer know what is happening.  If you are selling parts online, this communication may be easier. Dealers who are selling OEM parts online should be able to have the ability to display what parts they have in stock and which parts they do not. Controlling what inventory a customer can order online prevents customers from ordering an out-of-stock part, lowering order cancellation rates. Currently, many dealers are facing higher cancellation rates due to supply chain issues and inventory shortages. The ability to shop online and expand sourcing options can help alleviate the pressure of getting parts by increasing the odds of finding a part. While your dealership may not have a part in stock, there is a chance that another dealership in the nation may. The ability to go online and shop around for the part can determine how long a car is sitting in a dealership’s service lane.  The same is true for other dealers and repair shops sourcing parts. By creating an online parts business for the dealership, dealers and repair shops nationwide have the ability to source parts from your dealership. Looking Ahead With OEM Parts While not much can currently be done about continuing supply chain issues, OEMs and retailers should focus on providing service to the aging vehicles on the road now, by maintaining OEM replacement parts.  Dealers lack new inventory, and consumers may be hesitant to pay the rising prices; the one thing that remains consistent is the vehicles on the road continue to age. This places more importance on fixed ops and the ability to sell and source parts. To do this efficiently, dealers need to expand their reach by taking their parts business online. By creating an online parts business for your dealership, you become part of a national market with access to millions of more buyers and thousands of more parts sources.       
Parts eCommerce Fuels Revenue Growth in 2021

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Despite the intense economic challenges and supply issues that occurred during 2020 and 2021, dealers selling parts online with an effective eCommerce strategy continued to see an increase in parts sales. RevolutionParts measured the success of dealers selling through with their eCommerce platform to determine the top trends of digital retail in 2021. RevolutionParts found that the average dealership selling online with their eCommerce tools grew their revenue by 13.4% in 2021, making it their most profitable year yet.    New Car Dealers’ Selling on the RevolutionParts Platform  Online Parts & Accessories Sales Growth, (YoY) Dealer Revenue Continued to Grow Online Despite the challenges presented to dealers over the past two years, online parts sales continued to rise. On average, dealers selling through the RevolutionParts platform generated $38,972 a month, a 13.9% increase over 2020, and the average annual revenue per dealer reached over $600,000, adding massive revenue to their parts department.   This increase in sales comes with a new shift in the way consumers buy parts. Not only are they buying online, but year-over-year, more consumers are buying parts from their mobile devices.  In 2020, most people did their online shopping via desktop. However, in 2021 mobile shopping surpassed desktop purchases for the first time, with 49.3% of people using mobile to make their online purchases, which is an 8.4% increase from 2020. This points to the growing importance of targeting parts buyers on the move with a high-quality, responsive web store and a shopping experience that is also mobile-friendly.  This report shows how important it is for dealers who want to continue to grow their parts business and provide a modern customer experience to sell parts online. Parts buyers are shopping online in high numbers from their desktops and mobile phones. Having a successful parts business means meeting your customers where they are.    Get the Full 2021 eCommerce Year-In-Review Report  The  RevolutionParts 2021 Parts eCommerce Year in Review  provides a look into the performance and top eCommerce trends in 2021, including insights from how and when people are shopping for parts, to the top parts and accessories they are buying. To view the full report, visit:  https://www.revolutionparts.com/ebook/2021-parts-ecommerce-year-in-review/