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Digital marketplaces help parts sellers get maximum profit with minimum effort

In a global market survey carried out by Satair, roughly one in five sellers of aircraft parts indicated that a lack of resources is keeping them from taking advantage of digital marketplace solutions.

The survey results, which were based on in-depth interviews with 22 customers around the world, found that 21 percent of sellers view limited resources as a major barrier to their use of digital marketplaces – the single biggest pain point identified.

This lack of resources is also likely why the majority of sellers of used serviceable material (USM) and surplus aircraft parts rely on traditional selling methods over online platforms.

More than one-third of respondents primarily sell parts through a third-party broker, while another 15 percent use a traditional tender or request for proposal (RFP) process. Thirteen percent rely on connections made through their past customer relationships. In total, these traditional methods were the go-to strategies of 68 percent of the surveyed sellers, compared to just 38 percent that currently use digital platforms.

But according to Vincent Joséphine, manager of B2B customer success at the leading e-commerce company Mirakl, this is beginning to change as more and more sellers realize the benefits of listing their parts on digital platforms.

"Sellers are able to expand their customer base through digital marketplaces, increase their sales and reduce their overstock," Joséphine says.

Valuable insights into customer behaviour

In addition to allowing sellers to reach more customers and achieve higher margins on their goods by cutting out brokers, aviation parts e-commerce platforms like the Satair Marketplace also give sellers valuable insight into customer behaviour and market dynamics.

“In the Satair Marketplace, buyers can see who is looking for what, whether buyers are more interested in new parts than used, or vice versa, and whether there are any regional differences when it comes to buyer behaviour,” Satair’s Director of Commercial Strategic Programmes, Allan Uldahl Riis, says.

Sellers that rely on brokers or more old-school methods don’t have access to this insight. “It’s all a black hole,” Riis says.

By gaining awareness of customer behaviours, sellers are also able to gauge the availability of certain parts. If a seller can see that demand is greater than supply, they can take advantage of that scarcity to set a price that accurately reflects the part’s fair market value.

In addition to influencing pricing, the insight into buyer demands and behaviour can also help sellers make decisions about how to position themselves competitively. All sellers on the Satair Marketplace can create a profile page where they can promote special offers to try to stand out from the pack and appeal to buyers. They might, for example, offer a service upgrade of a used part or direct delivery to a customer's door.

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Direct access to buyers

This ability to be more responsive to market demand is particularly important for sellers now that many have shifted away from their pre-pandemic strategies.

According to Riis, parts sellers used to wait until they had amassed a large surplus of parts that they could offload in bulk, often at prices much lower than the parts’ true market value. But now OEMs and other parts and services providers are more likely to try to maximize their returns in order to help offset some of the financial losses they’ve suffered during the crisis.

“Sellers are in a situation where they really need to get higher prices for their stock,” Riis explains. “Their whole supply chain is now being looked at as a moneymaking opportunity and they’ve found that they can get much better prices selling parts individually rather than offering discounted bulk package deals.”

Additionally, Riis says that parts sellers are also realizing that listing their inventory on digital marketplaces means that they don’t need to give a cut of their margins to third-party brokers.

“We can see that more sellers are taking on the direct selling activity themselves rather than offloading large chunks of their inventory to another party that turns around and sells it at a markup,” he says. “And the other thing is that they’ve simply realized that it’s actually quite easy to sell directly because there are platforms available for that.”

With digital marketplaces, even smaller sellers can make the most out of their inventory.

“If you’re a repair shop, you’re not really in the business of selling parts. So traditionally your customer base would be fairly small,” Riis says. “But by using these types of platforms, you can get easy access to new customers without having to commit many resources to it. You can just let the technology work for you and suddenly you have a revenue stream that wasn’t there before.”

The Satair Marketplace currently has ten approved third-party sellers using the platform to sell more than 75,000 products. That’s in addition to the 1.5 million parts sold directly by Satair. According to Riis, the goal is to have more than 40 third-party sellers offering 250,000 parts by the end of 2022.

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About this blog

This blog is driven by Satair Marketing & Communication with input from both internal and external contributors.