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October 24, 2006

Now You Can Find A New Set of Rims at Amazon.com

posted by MR WAVETHEORY at 10/24/2006 10:18:00 AM
Amazon.com, Inc. (Nasdaq AMZN) has begun selling auto parts today. What an odd choice you say? Actually, it is the largest market that Amazon is not in today! How many auto parts will be available at Earth's largest selection? 100,000 of those items will be eligible for Free Super Saver Shipping according to Amazon.com's press release. Also, you'll be able to get $20 off purchases of $99 or more at Amazon.com Auto.

How many parts are available?
Amazon.com will have 1 million new, used and remanufactured parts at its online automotive store. Parts are available for 10,000 different car and truck models built in 1975 and later.

The choice of moving into the auto parts sector further speaks to Amazon's continued ambition. The market is attractive because of its sheer size, says Steve Frazier, vice president of automotive at Amazon. He says Amazon believes that the auto parts market could realistically total $40 billion and says it is one of the few remaining big markets where Amazon is not already a player.

Why Is Amazon.com getting into auto parts?

"If you look at our company mission, it is to let people discover anything they want online," said Frazier in an interview. "And auto parts is a very large business in the U.S."

But the decision to get into such a large market is also replete with potential potholes. For one thing, many of those looking for auto parts are likely to have urgent car problems and may be more inclined to head to a local garage than to wait for Amazon to ship. "It will be tough for us to address problems like 'My car is making a funny noise,'" says Frazier.

But he says Amazon plans to focus on enthusiasts looking to modify their cars and on those items -- such as windshield wipers -- that can be anticipated to be replaced.

Aren't auto parts very heavy to ship?

Still, many of the auto parts that Amazon will traffic in tend to be very heavy. The costs involved with mailing and storing snow-tire chains and roof racks is daunting. But Frazier says Amazon encountered the same hand-wringing five years ago when it entered the electronics business, and again four years ago when it opened its kitchen store.

While the move may play to Amazon's strengths much more than search-engine technologies or delivering video, it's clear that the company continues to swing for the fences. Investors are likely to view A9 and Unbox as strikes against it.

They will be paying close attention to exactly how Amazon plans on taking its next pitch.

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Blogger Jonathan Siberry said...

Online is now the way forward for most things from banking to online shopping and car parts is no exeption.

I recently found a good vehicle salvage site also which could be used for car parts or a new car

2:32 AM  

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