March 3, 2010, 12:00 AM

U.S. Auto Parts Network cranks up 2009 web sales by almost 15%

U.S. Auto Parts Network boosted 2009 sales by 14.9% to $176.29 million, aided by its private-label parts offerings.

Web-only retailer U.S. Auto Parts Network Inc. boosted 2009 sales by increasing its private-label parts offerings and opening an East Coast distribution center.

“We brought in a significant amount of private-label engine parts,” CEO Shane Evangelist tells Internet Retailer. “Our auto body parts always have been sourced overseas and engine parts have always been from the U.S. We outsourced close to 1,800 SKUs that we could sell as private label and at competitive pricing.”

U.S. Auto Parts Network, No. 102 in the Internet Retailer Top 500 Guide, also opened a new distribution center in Chesapeake, VA, that cut the average shipping time from five days to under three days, Evangelist says.

New site search technology from Endeca Technologies Inc. also now enables U.S. Auto Parts to produce refined product lists in response to shopper searches. For example, in the past a search for brake pads for a Ford F150 pickup truck would have presented all brake pads for Ford pickups, forcing the shopper to consult the fine print to find the right pads, Evangelist says. The new search tool helps reduce the number of products presented to the consumer. “Now we can show the specific part the shopper needs,” he adds. That in turn contributed to a 19% reduction in product returns in 2009, says Evangelist.

The company also launched a web site devoted to do-it-yourselfers last year. AutoMD.com offers the consumer advice on procedures and approximates a level of comfort the shopper gets from talking to a parts store employee, Evangelist says. “We can show parts, tools and how-to guides,” he says. “We built an authoritative site to provide content and, by giving a list of parts needed, we can send shoppers to our e-commerce site-we generate our own leads.”

Closer up-front scrutiny of customer credit cards last year helped reduce card declines by 24%, he adds. The improvements contributed to a reduction in average order size without a reduction in margin, which showed up in the sales increase, Evangelist adds. The average ticket in the fourth quarter 2009 was $115 vs. $120 in the prior year quarter.

For the fiscal year ended Jan. 2, 2010, U.S. Auto Parts reported:

  • Web sales were $176.3 million, up 14.9% from $153.4 million in 2008.
  • Net income was $1.3 million compared to a net loss of $16.9 million last year.

For the fourth quarter, the company reported:

  • Online sales were $45.8 million, a 35.5% increase from $33.8 million in the prior year quarter. The increase in online sales resulted from a 28.0% improvement in conversion and 9.6% growth in unique visitors, the company says.
  • Net income was $586,000 compared with a net loss of about $3.5 million.
  • Online advertising expense was $2.8 million or about 6.1% of web sales for the fourth quarter of 2009, down about half a percentage point from the prior year period due to more efficient marketing spend, the company says.
  • Marketing expense, excluding advertising, was $3.3 million or 7.2% of sales compared with 8.6% of sales in the prior year period. The decrease in percentage terms was primarily due to spreading the marketing expense over higher sales.
  • Fulfillment expense was $3.1 million or 6.8% of net sales versus 6.9% in the prior year period.
  • Technology expense was $1.1 million or 2.4% of net sales compared with 3.3% of net sales in Q4 2008.
  • Capital expenditures were $2.2 million, including $1.5 million of internally developed software and web site development costs.
  • Unique web site visitors numbered 25.1 million, up by 9.6% year over year from 22.9 million.
  • 368,000 orders, a 39.4% increase from 264,000 in Q4 2008.

 

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