PartsTrader CEO compares New Zealand, U.S. programs
June 19, 2012—Members of the collision repair industry have developed inaccurate conclusions of State Farm Insurance’s online parts ordering program through PartsTrader by comparing it to the program used in New Zealand, said Rob Cooper, CEO of PartsTrader, in an open letter to the industry.
“There has been a great deal of commentary about PartsTrader’s origins in New Zealand and many have drawn conclusions as to the relevancy of such comparisons,” Cooper said. “However, the reality is that the New Zealand market is very different from the U.S. market. And consequently the PartsTrader product being piloted in the U.S. is not the same product that has been in operation in New Zealand for over eight years.”
Cooper stated the following examples:
• In New Zealand, insurers have access to repairers’ buy prices. They do not in the U.S.
• In New Zealand, repairers must get insurer approval on every parts purchase. Repairers in the U.S. have the freedom to choose.
• In New Zealand, insurance companies mandate a 24-hour wait time for price quotes. The wait time is a minimum of one hour in the U.S.
• In New Zealand, the system does not support ordering and is not integrated. The U.S. product does support ordering and will be fully integrated.
• In New Zealand, the majority of parts have always been priced by insurers on a cost-plus basis, before PartsTrader existed. A different model exists in the U.S.
“Saying that the New Zealand and U.S. PartsTrader offerings are the same is like saying that cricket and baseball are the same sport because they each involved bats, balls, innings and runs. In fact, they couldn’t be more different,” Cooper said. “There has been a great deal of public commentary about this initiative, and much of it has been negative. Unfortunately, much of the commentary has been based on inaccurate information.”
Cooper said PartsTrader recently launched a new website, partstrader.us.com, to communicate with and educate the industry on the product and to clear-up misinformation about the program.
“If you have not already done so, you may want to review the Repairer FAQs and Supplier FAQs that we have posted on our website. We urge industry leaders to help their constituents become well-informed regarding this initiative. Many repairers and suppliers to date have received one-sided or misleading information, filtered to ensure only the worst is communicated. We would be discouraged if business owners were to make decisions potentially detrimental to their business without fully understanding all the available information. PartsTrader believes in win-win relationships in the context of an open, competitive marketplace. This means we must deliver value to all stakeholders, including repairers and suppliers,” Cooper said. “Repairers are in control of the process, as they should be.”
Cooper said PartsTrader is constantly enhancing the product based on feedback from repairers and suppliers. He said PartsTrader will soon implement a supplier and repairer rating system, and will integrate the product with all estimating and management software systems.
“This will ensure that factors such as quality of part delivered, service, information accuracy, delivery time, negotiating in good faith and part return policies are all taken into account when purchasing decisions are made,” Cooper said.
“We understand that there is a great deal of concern in the industry about PartsTrader’s objectives and insurance companies’ involvement in parts procurement. However, we believe that our initial client is a good one based on their shared commitment to win-win outcomes. We have committed to the market that we will not allow insurance companies access to any repairer’s buy prices. Similarly, we will not enter into any insurer relationship that prevents repairers from making their own decision about choosing a supplier. We are committed to PartsTrader being a valuable tool for all repairers and suppliers moving forward. In short, we are committed to repairers being in control,” Cooper added. “I wish to reiterate that we only win if all the stakeholders in the process have the opportunity to win. The very basis of the American free enterprise system necessitates that for a business venture to be successful, value must be created for its customer base. As such, we look forward to building a platform that puts repairers’ and suppliers’ needs first, and in doing so, will improve the parts procurement process for all.”