Should You Add E-Commerce to Your Service Business?

Having run both a diesel repair shop and an e-commerce store under the same brand, I’ve received a ton of questions about this. So in this post, I'll break down the key challenges, considerations, and whether this move makes sense for your business.

Who This Is For

Before we jump in, let’s be clear about who this advice is for. If you're the type of business owner who's pushing hard, operating at a high level, and willing to grow, this is for you. This isn't for the "old-school" guys sitting around complaining about the industry while refusing to adapt. I’m talking to smart, hardworking entrepreneurs looking for real answers.

The Biggest Challenge: Competing on Price in a Low-Margin Industry

One of the biggest pain points in adding e-commerce to a service business is how difficult it is to add enough value in an already low-margin market.

E-commerce brands that succeed have two major advantages:

1. Data – They know their customers and use analytics to optimize every part of the buying process.
2. Distribution – They have efficient logistics to ship products quickly and at a lower cost than competitors.

The problem? Most service businesses don’t have either of these in place.

Why Competing on Price is a Losing Battle

E-commerce is highly competitive. If you sell the same parts as everyone else, the only way to compete is on price. And when you compete on price, you need to be incredibly efficient because margins are razor-thin.

This becomes a major issue when you're already operating a service-based business with different pricing structures. Most shops make money on both labor and parts—you’re charging higher margins on parts than online retailers. If you start selling parts online under the same brand, you create two problems:

1. Customers Expect Online Prices in Your Shop – If they see a part online for $50 but you charge $75 in-store, they’re going to question your pricing. This leads to friction and lost trust.
2. You Attract DIY Customers Instead of Service Customers – The people buying parts online often want to install them themselves. These are not your ideal customers if your main business is service-based.

At the end of the day, you’re trading a 60% margin on a full repair job for a 5-10% margin on a part sale. That’s a losing formula.

The Fundamental Difference: Service vs. Data Business

Another major issue is that service and e-commerce are completely different business models.

• Service Business = High skill, direct communication, face-to-face sales, trust-driven transactions.
• E-Commerce Business = Low skill, bottom-of-the-funnel transactions, brand loyalty is minimal, highly data-driven.

If you're not excited about data, logistics, and competing on price, then e-commerce probably isn’t for you. The reality is, you're not just getting into the parts business—you’re getting into the data business. And that’s a whole different game.

When E-Commerce Does Work

So, does that mean adding e-commerce to a service business is always a bad idea? Not necessarily. It can work if you meet two key conditions:

1. You Have Your Own Branded Product – If you’re selling something proprietary (not just reselling parts), you have a unique value proposition that isn’t just price-based.
2. You Have Strong Distribution & Data Systems – If you understand e-commerce as a data-driven business and have the systems in place to compete, you’ll have a much better chance of success.

My Experience: Why It Worked (And Then Didn’t)

In my business, we succeeded in e-commerce because:

• We had our own DTC (Direct-to-Consumer) product.
• We were data-focused and optimized our distribution.

But when we lost the ability to sell our branded product DTC, our revenue dropped 50% overnight, even though it had only made up 10% of our total sales. Why? Because without that unique product, we were just another e-commerce shop selling the same parts as everyone else—at a lower margin.

Final Thoughts: Should You Add E-Commerce?

If you’re thinking about adding e-commerce to your service business, ask yourself these questions:

• Do you have a unique product to sell, or will you be just another parts retailer?
• Are you willing to operate in a low-margin, high-competition space?
• Do you have the data infrastructure and distribution capabilities to make it work?
• Are you okay with losing high-margin service customers who might just buy parts instead?

If the answer to most of these is no, then e-commerce is probably not the right move for your business.

E-commerce isn’t bad—but it’s a completely different business model than service. If you don’t go into it with the right mindset, it can end up costing you more than it makes.

Hope this helps! If you’re in the service industry and considering e-commerce, let me know your thoughts and questions in the comments.