eBay Motors Becomes Parts Supplier for Openbay Member Repair Shops

Openbay, a startup that is trying to transform how consumers find reliable automotive repair shops in their area, has partnered with eBay Motors to allows its member repair facilities to source parts on eBay from the Openbay dashboard directly

By including the large selection of eBay Motors Parts & Accessories in the Openbay dashboard, repair facilities will have access to OEM automotive parts, white label parts, national brand aftermarket parts, remanufactured and used parts, and hard to find parts for older or vintage cars.

“By collaborating with Openbay, we are making it extremely easy for automotive repair businesses to get their hands on the parts they need, when they need them. With millions of items available on eBay – everything from OEM to hard-to-find parts, we’re arming the Openbay community with the access to this inventory. With our wide spectrum of value, we’re hoping to save customers time, money, all while improving their profitability.”

Jordan Hettinga, Director of Category Management at eBay Motors

Repair facilities have often used eBay as a source for hard to find parts.

While most shops usually buy wholesale from local dealers or through aftermarket distributors, eBay Motors expands their ability to source more unique products.

Some shops also do not have purchase arrangements with performance aftermarket distributors. eBay Motors vast inventory through its large seller base may provide them with access to these products. But there might be a catch!

Changing the way Repair Businesses Source Parts may be Risky

One aspect of this arrangement neither party in this agreement is addressing is about warranty responsibility. Many aftermarket parts suppliers refer back to the service or installation service to handle warranty repairs.

In some states, the service facility is on the hook for performing warranty service, regardless if the product was purchased through them or if the customer provided it.

Many large auto repair and service chains do not install parts that are not purchased through authorized distribution channels, and that is where eBay sales of parts could become an issue.

eBay is full of parts sellers that are not authorized dealers for main product lines.

Will Openbay restrict access to a few sellers they know are authorized dealers and technically hold wholesale distribution agreements?

If so, is there a mechanism for eBay sellers to “apply” to become part of the Openbay eBay inventory for brands they are authorized to distribute to retailers?

Exactly What is the Potential Catch?

While independent automotive repair shops are willing to consider alternative suppliers for auto parts, using eBay sourced parts may create problems neither Openbay or the repair facility imagined.

Some parts manufacturers flat-out prohibit the sale of their products to other retailers. Here is a passage out of one manufacturer’s dealer policy that is not that uncommon:

“… Customers are authorized to resell only to end user consumers of <brand name deleted> products, and not to any entity or individual that will resell the products….”

If the Openbay member service facility purchases a product from an eBay seller, the manufacturer is not necessarily required to provide warranty service if the sale violated their dealer or distribution agreement. The manufacturer can claim it was a grey market or unauthorized sale, therefore the product has no warranty.

Of course, there is a reputation issue that manufacturers may take into consideration and may step up to help solve the warranty issue. But there is no guarantee that will happen.

The manufacturer may also ask the service facility to go back to the eBay dealer to handle the warranty. A common request as well. But what happens if the eBay seller no longer exists?

The above scenario is not valid for harder to find products that are out of manufacturing, refurbished products, or used products. Those products are typically sold as-is and would not carry a warranty.

The Openbay and eBay Motors partnership would be a benefit for the harder to find products, but the press announcement specifically discussed using eBay for new parts and that is where sales and distribution agreements could become a factor.

eBay may be a great marketplace to find parts, but transshipment rules by automotive aftermarket parts suppliers are a contractual issue that unless addressed by Openbay with its member service facilities, may negatively impact their business.

Afterall, the whole idea of Openbay is to remove the questions and doubts about choosing the right repair shop. Yet, this partnership could backfire on new parts purchased on eBay that are covered by restrictive distribution agreements.

We love to hear your thoughts on this deal and the possible problems it may have for consumers. Drop us a line in the comments section below.

Author Disclosure: I have worked in automotive performance aftermarket parts and have seen the industry change to shift away from distribution channels and toward direct to authorized dealer sales. Some of this shift is a direct result of attempting to control the sales and distribution channels of their products. This control can only be exercised with a direct sales relationship. I checked several distribution agreements I still possess in my emails and prohibiting transactional sales is becoming very common. I am not a lawyer, but I believe new parts retail sales by eBay sellers to repair facilities becoming increasingly prohibited by the language in the agreements. I also was involved working for one parts manufacturer enforcing IP (Intellectual Property) rights using the eBay VeRO (Verified Rights Owner) program. This IP enforcement included distribution sales channel enforcement and tracing of origin of parts sold through unauthorized distribution channels. Therefore, I believe I have a unique perspective on this issue that is based on actual working knowledge.
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