How CarParts.com Is Taking Advantage of the Supply Chain Crunch
Supply chain disruptions are hammering retailers big and small. A combination of factory shutdowns because of COVID-19, limited shipping capacity, delays at ports, and labor shortages are introducing unprecedented inventory challenges for a wide range of businesses. Retail giants like Walmart and Costco are chartering container ships to ensure they have sufficient inventory for the holiday season, and automakers are still reeling from a shortage of semiconductors.
CarParts.com (NASDAQ: PRTS) is small-cap online auto parts retailer. It's facing many of the same challenges as other retailers, including delays in shipping and higher freight costs, but the company also sees an opportunity to take advantage of the squeeze. Just as the stock soared during the early stages of pandemic, the supply chain disruptions could also present a good entry point for investors, especially with the stock down 20% in the last three months.
The supply chain is important in any industry, but it's crucial in auto parts. There are millions of SKU's (stock-keeping units) across the automotive world since every car requires a different set of components. Unlike some products, in auto parts there are no substitutes -- either you have the right part or you don't -- so having the right part in stock is the most important factor in making a sale.
Source Fool.com
