Members, Leaders Weigh in on State Farm Parts Ordering

Posted 02/01/2013
By Rachael J. Mercer

State Farm Pilot

State Farm is piloting its PartsTrader application in the following cities:

• Charlotte, N.C.
• Birmingham, Ala.
• Grand Rapids, Mich
• Tuscon, Ariz.
• Chicago

The hot-button topic these days when it comes to collision repair is electronic parts procurement. Specifically, there are concerns in the collision industry about the changes State Farm and the online parts ordering application created by PartsTrader are bringing about. As with any mandated change, there are many technicians, shop owners and even industry leaders who are upset about the ramifications of the State Farm/PartsTrader application.

To keep its members informed and educated about the issue, the Automotive Service Association offers this recap of the issue, with input from various parties on how they see it affecting collision shops now and into the future.

State Farm has partnered with PartsTrader, an electronic application for obtaining parts. Independent collision repair owners who want to continue to work with State Farm as a Select Service provider must opt-in to the electronic PartsTrader system for parts ordering. State Farm initially piloted this program in Charlotte, N.C., Birmingham, Ala., Grand Rapids, Mich., and Tuscon, Ariz. Recently, State Farm expanded the pilot to include the Chicago market. In the Chicago area, where there are 477 State Farm Select Service shops, 475 registered in advance to participate in the PartsTrader program.

Although there is no published time frame for introducing this program to the rest of the United States, there is already a great deal of trepidation among repairers because it will greatly affect the way they do business.

Denise Caspersen, manager of ASA’s Collision Division, cautioned against reading too much into the high sign-up numbers. “Some of the Select Service shops that registered for the PartsTrader program are going to use it at a 10 percent level,” she said. “But some will take off and really run with the program and use it at 100 percent.” She explained that the Chicago market is unique in that it has many consolidated shops and there are fewer traditional independent collision repair shops. “This high-consolidator-type market may have driven the high number of sign-ups for the pilot program,” she explained.

Stay Informed

Dan Stander, AAM, ASA Collision Division director, understands the concerns surrounding this issue, and encourages shop owners not to panic just yet. “ASA is trying to give as much information as possible to its members, who should never make a decision based on rumor or misinformation,” he said. “Each shop owner is responsible for his or her own due diligence – talking to State Farm representatives directly, getting information from shops that have experienced the PartsTrader system firsthand, and learning from their association.”

Stander, of Fix Auto Highlands Ranch, Littleton, Colo., said having questions is natural. Many shop owners who have not experienced any part of the PartsTrader system themselves might be asking questions such as, “Will these changes bring me more work?,” “Will it cut into my work?,” “Will this system reduce my bottom line?,” etc.

Stay Informed!
Stay educated and informed on the State Farm pilot issue! To keep on top of ASA’s efforts regarding the State Farm pilot program, ASA has created a section on its website to house the latest press releases and other resources on this ever-developing issue. Go to www.ASAshop.org, click “Tools and Resources” and then select “State Farm Pilot Program.” If you’re a collision repairer, be sure to bookmark the page so you can check back conveniently for updates on this important issue.

Stander encourages concerned shop owners to participate in absorbing as much information about this change as possible. “Listen to what the associations are doing to learn about this program, and the changes they are suggesting,” he said, referring to the involvement that ASA and other industry organizations are having. This involvement has already led to some refinement and honing of the PartsTrader program in the test markets. He finished by saying, “The truth is, I won’t know if the program is right for me until I try it for myself. If there are benefits I can find, I will use it. If not, I will kick it to the curb. But I will try it for myself – see it with my own two eyes and use it with my own two hands. And then I will make a decision.”

Mike LeVasseur, owner of Keenan Autobody, a multi-shop collision business in Pennsylvania, echoed Stander’s advice on the level of concern many shop owners are exhibiting about this program. “The State Farm PartsTrader program is still in the pilot stages. It is important to recognize that and not pass judgment on its functionality until more changes are made and everyone can try it personally,” he said. As a member of ASA’s Collision Division Operations Committee, LeVasseur has witnessed changes that have been made in an effort to make the PartsTrader experience as positive as possible for collision repairers.

PartsTrader, which was developed in New Zealand in its original application, has changed significantly since State Farm contracted with the owners to bring this product to the United States. No matter what experience those in New Zealand had with the product, the experience for those in another part of the world, who will be using a modified application of the program, is sure to be different.

The Automotive Service Association has been extensively involved in refinement of the PartsTrader application. Members of ASA’s Collision Division Operations Committee have been actively engaged in testing and in the information-gathering process since April 2012. ASA and the operations committee have suggested numerous changes to the PartsTrader application and will continue to suggest changes as the pilot continues.

Unexpected Benefits

Steve Tomaszewski, also a member of ASA’s Collision Division Operations Committee, is president of Alpine Collision Center in Grand Rapids, Mich. His shop is involved in the pilot program with State Farm and PartsTrader. Tomaszewski pointed out one of the unexpected benefits of using the Parts- Trader system for parts ordering: “PartsTrader gives me – a small independent operator – the luxury of time. I can capture emails to send the estimate later and submit a quote – all online, and then I can come back to check the quote after hours.” He emphasized that even though many dealers and recyclers may be closing (or already closed), “I can go into the system and order parts after business hours.” He explained that the conventional parts ordering process involves calling three recyclers or distributors and documenting the calls, while trying to get the best price. This method takes a good bit of administrative time, he said, and stressed that the PartsTrader system has definitely streamlined the parts ordering process.

Caspersen said the program may bring about some other benefits to the collision industry as it is implemented nationwide. “There will likely be greater visibility as to what’s available in the parts marketplace,” she said. “Competition among parts suppliers is good.”

Several industry insiders also commented that the PartsTrader ratings process that has been developed will likely be part of the final application implemented nationwide. Everyone agreed that this ratings process would be beneficial to all parties involved in parts procurement. Shop owners and technicians will have the ability to rate their experience with parts suppliers and vice versa. For the same reason a buyer might not complete an eBay transaction with a seller who has a poor feedback rating, a parts provider might decide against doing business with a collision repairer who has received poor feedback. Caspersen said, “With a ratings system, a shop owner can look critically at the parts offers he has received and think, ‘I really like buying from XYZ – they have 5 stars, etc. And then they can look at and read the recommendations of others. I believe the better suppliers and repairers will rise to the top.”

For State Farm Select Service shops, keeping an open mind and waiting to try the product for oneself rather than jumping to accept the conclusions of others will be key factors in deciding whether to enlist the PartsTrader application.

Realparts.com Emphasizes Time Savings

Ken Weiss and his business partner, Bob Lyons, both grew up in the automotive industry – one in the salvage pool business and one in the body shop business. After spending years in industry-related jobs, both saw the need for a technology solution to improve parts ordering processes in body shops. “I saw the ups and downs of parts ordering,” said Weiss. “Technicians ordering parts had a relationship with the suppliers, but still had to deal with the downside of unreliable parts databases or time they didn’t have to spend on the telephone.”

Together, they developed RealParts.com, an online Internet application that allows repairers to build their own vendor networks of suppliers and recyclers based on the relationships they already have. RealParts.com has the capacity to source all types of parts but the focus has primarily been to help repairers save time and frustration when sourcing recycled parts.

“Parts quoted via RealParts.com are all confirmed by a parts specialist at each participating recycler for availability, condition, price and delivery,” said Weiss. “And best of all, there are no multiple phone calls, busy signals, time spent on hold, waiting for promised callbacks or messages to return.” – RJM

Rachael J. Mercer is a freelance writer based in McDonough, Ga. She can be reached at mercerfreelancing @gmail.com.