THE VENDOR EFFECT
MERA’s Chris Cook provided additional insight into why a partnership with eBay Motors is an opportunity to break the ecommerce / brick and mortar stalemate.
ME: Why do we need a partnership to get authorized retailers selling online? Why can’t vendors do this on their own? Cook: Te problem comes from retailers trying to sell products outside their local market. Te only way they can compete is by lowering the price, which hurts the brand for the vendor and all retailers. Most vendors with territory based sales have not figured out how to address this and have just said ‘no’ to online selling. But the problem is this isn’t a long-term solution. Although the traditional products that this industry represents are on a decline, the fact is that the independent retailer is losing market share to online retailers at a faster rate than the industry decline.
ME: Are vendor concerns justified regard- ing the inability to regulate a plethora of individual websites to insure that they adhere to online pricing and/or territorial agreements? Cook: Vendors are concerned about how their brand is represented online by new Internet resellers. But the fact is they already have a problem with their product being represented online by unauthorized retailers, even with a restrictive Internet policy. One posi- tive of allowing authorized retailers to showcase their products online is that consumers have a chance to compare the value proposition offered by local retailers.
ME: If this potential partnership results in a successful online marketplace, do you feel it would encourage retailers who are currently engaging in gray market activi- ties online to “right their ships?” Cook: Yes. If this is successful, then all authorized retailers will want to par- ticipate. Gray market retailers can only compete on price and hopes to attract customers through a search engine. With authorized retailers emphasizing vendor-approved transactions under warranty, the ‘value’ message becomes less about price and more about a more fulfilling service experience.
20 Mobile Electronics May-June 2013
Laying the Groundwork MERA, the Mobile Electronics Retail-
ers Association, represents more than 1,000 mobile electronics specialists in the U.S. and Canada. Chris Cook, pres- ident of MERA and a 29-year industry veteran, says that the controversy over e-commerce participation by specialist retailers is an ongoing concern, not just on behalf of MERA, but for the entire industry. “Feedback from our membership, as well as studying the changing retail landscape, tells us that our customers have decided that they would pre- fer to shop online,” he said. “Mobile electronics retailers need to be where the customers are, and not just with a website but a full online store. The old days of ‘I don’t give prices over the phone’ or ‘we don’t sell online’ will not cut it anymore.”
But, he added, vendors are reluctant to allow their products to be sold in a seemingly uncontrollable marketplace, where both price and territory become major issues.
So, earlier this year, MERA embarked on a project to explore solutions. It contacted eBay Motors, a division of eBay, to see if there was a way both parties could work together to achieve complementary goals. eBay Motors is one of the largest sellers of new and pre-owned vehicles worldwide, with more than 5 million passenger vehicle sold (not auctioned) to date. In addition to offering “market space” for stores to sell vehicles, eBay Motors also allocates
space to parts resellers. In the fourth quarter of 2012, parts and accessories sales on eBay Motors totaled more than $1.7 billion. “With the wave of in-car technology being promoted by practically every automobile manufacturer, it became clear that the industry did not need to promote what you can do in the car, but instead that you do not need to buy a new car to get the latest technology,” said Cook. “The focus then became about how to get in front of drivers as part of the used car buying experience.” With four to five times more used car
transactions each year than new, not to mention the 250,000,000 cars already on the road, Cook said MERA began ex- ploring the relationship to identify the best way to reach these customers and eBay motors emerged as the dominant automotive marketplace. “On eBay Motors a passenger car is sold every two minutes with a part or accessory sold every second,” Cook pointed out.
Vendor Objections Need to Be Addressed
While the specifics of a MERA / eBay
Motors solution are still up in the air, the outcome, according to Cook, is a marketplace within eBay Motors in which MERA retailers can market and sell all of their products and brands online with installation, and provide fulfillment in-store. Of course, to do this, the plan would involve elements to
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