The auto aftermarket size is more than $300 billion EVERY YEAR in the US, so why don't digital marketplaces like and CarGurus list aftermarket auto parts?

I'm curious why these digital marketplaces limit themselves to simply marketing and listing dealerships and not aftermarket parts sellers like AutoZone, O'Reilly, Advanced Auto Parts, etc.

After all, there must be demand from these aftermarket sellers to advertise on such high-traffic car sites, and demand from consumers to find aftermarket parts on these sites right? If I visit a website called, I'd expect to find everything car-related there, including buying parts for my car.

Feels like a huge untapped market. Asking because I'm trying to understand their business models. Any help is appreciated. Thanks

WSO Elite Modeling Package

  • 6 courses to mastery: Excel, Financial Statement, LBO, M&A, Valuation and DCF
  • Elite instructors from top BB investment banks and private equity megafunds
  • Includes Company DB + Video Library Access (1 year)

Comments (2)

Most Helpful
Jul 20, 2021 - 7:32pm

Despite its size, the auto aftermarket is a very niche industry that few truly understand including those who work in it. The reality is that most customers looking to buy vehicles on probably aren't 'car people' that buy retail aftermarket products from online distributors. There is some overlap, but often times car enthusiasts buy directly from other private sellers thru classifieds and enthusiast websites and almost never through dealers unless they are buying new. The majority of cars on are posted by dealers and the vast majority of customers are not going to be buying aftermarket products off a website due to 1) ignorance and 2) lack of interest.

Additionally, if we assume that primarily sells new cars, dealers will not want to list their cars there as they often sell both OEM and aftermarket add ons to customers directly after sale and would view as a competitor to their parts department. Another thing is that is simply a marketing service. They do not own inventory, warehouses of cars, or have to worry about distribution. They simply charge for classified ads. It's a safe, high margin and low risk business.

Parts distributors on the other hand have inventory costs, distribution costs, marketing costs, sales costs (to independent shops and dealers), and logistics costs. It's a totally different game and at a much lower margin. There simply isn't enough potential revenue synergies between the two business models for it to make sense to combine them and there certainly are very little cost synergies as their business functions are so different. Not to mention that if one were to acquire the other it would be very expensive as online parts distributors can trade at up to 13-18x and a type model could theoretically trade up to 25x if sold as a SaaS which it basically is (subscription contracts to market cars on their website with dealers).

This means it would be very expensive to acquire and very hard to see accretion because multiples are so high meaning there is a limit to how much debt you could use to finance the acquisition. It would also be expensive to buy a parts distribution business with debt because of the highly cyclical nature of the industry so creditors demand higher spreads and distributors also have a lack of fixed assets to use as collateral. So in all, that means that a deal would be highly dilutive to shareholders as mainly stock would have to be used for financing and with little opportunity for synergies. Hope this helps. 

  • Prospect in S&T - Other
Jul 20, 2021 - 8:44pm

Sit incidunt quis aut non molestiae optio est error. Ipsa consequatur minima expedita voluptatem et ab iusto. Similique esse quis laboriosam deserunt recusandae sint.

Expedita veritatis non qui in magnam. Quo nemo impedit ducimus rerum esse omnis. Dolore provident tenetur mollitia libero. Doloribus quia tenetur suscipit error consequatur provident non iusto. In sed perferendis et rerum explicabo. Nulla et suscipit incidunt cupiditate.

Praesentium placeat et voluptatem. Velit sint perferendis praesentium quis rerum.

Illo quia dolor eum qui voluptates. Minus qui sint occaecati distinctio molestiae.

Start Discussion

Total Avg Compensation

September 2021 Investment Banking

  • Director/MD (10) $853
  • Vice President (38) $367
  • Associates (218) $232
  • 2nd Year Analyst (130) $153
  • 3rd+ Year Analyst (30) $147
  • Intern/Summer Associate (102) $144
  • 1st Year Analyst (478) $135
  • Intern/Summer Analyst (375) $82