CarParts.com, Inc. (PRTS): Business Model Canvas [Dec-2025 Updated]

You're digging into the mechanics of a company actively pivoting toward profitability, and frankly, that's where the real analysis begins. After significant tech investments, seeing their Q3 2025 net sales land at $127.8 million while they aggressively expand high-margin private label assortment-like with A-Premium-tells a compelling story about their direction. We need to map out exactly how they plan to manage rising costs, like import tariffs on goods from China, against the scale of their platform, which sees 100 million annual visits. Below, the full Business Model Canvas lays out the concrete partnerships, key activities, and revenue streams driving this near-term focus; you'll want to see how it all connects.

CarParts.com, Inc. (PRTS) - Canvas Business Model: Key Partnerships

You're looking at how CarParts.com, Inc. is building out its operational backbone through strategic alliances as of late 2025. These aren't just vendor relationships; they are capital-light scaling mechanisms designed to enhance assortment and logistics without massive upfront spending.

The core of the recent strategic shift involved a $35.7 million capital infusion closed in early September 2025 from a group including ZongTeng Group, A-Premium, and CDH Investments. This funding is key to accelerating operational improvements and expanding the product catalog.

Here's a breakdown of the primary strategic partners and their quantified contributions:

• A-Premium: Expands mechanical private label assortment to over 120,000 SKUs.
• ZongTeng Group: Provides global logistics network with over 24 million sq. ft. of fulfillment space, giving access to 50+ U.S. fulfillment facilities.
• CDH Investments: Contributes strategic, operational, and governance expertise alongside capital.
• Third-party delivery services: Essential for inbound/outbound logistics and customer delivery, though fee increases pose a risk.
• Suppliers in Taiwan and China: Source for the majority of private label products, managing tariff exposure between 55% and 75% (China) and about 25% (Taiwan).

The partnership with A-Premium is already showing financial traction. Sales from that expanded catalog are trending at an annualized run rate of about $20 million and management sees potential to exceed $100 million over time. This is a significant move, considering mechanical parts were historically secondary to the collision private label business, which represents about 70% of revenue and covers more than 70,000 SKUs.

The capital structure of the September 2025 investment is worth detailing, as it blends equity and debt instruments:

The ZongTeng logistics integration is designed to enhance speed and efficiency, eliminating the need for CarParts.com to open additional distribution centers. This capital-light scaling is critical when looking at the Q3 2025 results, where net sales were $127.8 million and the cash balance stood at $36.0 million on September 27, 2025, against a $25.0 million convertible notes payable balance.

The focus on digital engagement is also supported through these channels, as evidenced by the mobile app reaching approximately 1,100,000 cumulative net downloads, and the CarParts+ membership program securing over 8,000 members.

Here's how the key operational metrics tie into the partnership strategy:

• Logistics enhancement via ZongTeng aims to reduce delivery times and lower fulfillment costs.
• Product assortment expansion via A-Premium targets incremental revenue of $50 million near-term.
• CDH Investments brings expertise to help scale operations, supporting the goal of free cash flow break-even in 2026.
• The Q3 2025 gross margin was 33.1%, up from 32.1% in Q1 2025, showing early signs of operational leverage.

Finance: draft 13-week cash view by Friday.

CarParts.com, Inc. (PRTS) - Canvas Business Model: Key Activities

You're looking at the core operational drivers for CarParts.com, Inc. as of late 2025, focusing on the hard numbers that define their execution.

E-commerce platform management: Replatforming website and mobile app for better user experience

The company has been actively working on re-platforming CarParts.com to increase performance and shorten development cycles, as stated by the CEO. This focus on the digital front end is critical for capturing the market. As of the third quarter ended September 27, 2025, the mobile app had cumulative net downloads of approximately 1,100,000. In the second quarter of 2025, the mobile app was already accounting for 12% of e-commerce revenues.

Key operational metrics for the period ending Q3 2025 reflect the strategic shifts:

Supply chain and logistics optimization: Managing national distribution centers, including a new semi-automated facility

Supply chain optimization remains a key pillar. CarParts.com enhanced its logistics by opening a new semi-automated facility in Las Vegas, Nevada. Furthermore, a restructuring initiative, which included the closure of the Virginia facility, is expected to generate approximately $10 million in annualized cost savings. The strategic investment secured in early September 2025 provides access to ZongTeng Group's network, which includes over 24 million sq. ft. of fulfillment space and access to 50+ U.S. facilities.

Private label product sourcing: Expanding high-margin product assortment with partners like A-Premium

Expanding the private label assortment is a direct play for higher margins. The partnership with A-Premium is set to add 100,000+ new SKUs to the product range. This specific partnership is already generating about $20 million annually and management sees potential to grow this to over $100 million as integration continues. Management noted that private label products carry mid-50% product margins. On the sourcing side, approximately 20% of private label products are imported from China.

Digital marketing and customer acquisition: Rationalizing ad spend to focus on profitable growth

The focus shifted sharply toward profitability, which directly impacted marketing spend. Total operating expenses in the third quarter of 2025 were $52.3 million, a decrease from $60.9 million in the year-ago quarter, partly due to favorable marketing spend. This rationalization of advertising expense was cited as the primary driver for the 12% decrease in net sales in Q3 2025. In contrast, Q2 2025 saw higher marketing spend, which contributed to a larger net loss of ($12.7) million.

AI-driven search and recommendation engine development: Improving conversion rates on the website

The company is investing in AI to improve product discovery, a trend seen across the industry where AI influences product discovery and recommendations. While specific 2025 conversion rate improvements tied to the engine weren't quantified, the overall strategy involves leveraging technology to enhance the factory-to-consumer experience. The mobile app's growth, with 1,100,000 cumulative downloads by Q3 2025, is part of diversifying the marketing mix away from reliance on search engines.

Finance: draft 13-week cash view by Friday.

CarParts.com, Inc. (PRTS) - Canvas Business Model: Key Resources

You're looking at the core assets CarParts.com, Inc. (PRTS) relies on to execute its e-commerce strategy as of late 2025. These aren't just line items; they are the engines driving customer acquisition and fulfillment.

The company's technology stack is a major differentiator. They have a proprietary e-commerce technology foundation, which includes a fully replatformed website featuring a mobile-first, fit-specific user experience. This platform, as detailed in early 2025, supports new search and product recommendations capabilities, generating 100 million annual visits.

Logistics is clearly central to the value proposition. The national distribution network is structured to cover 95% of the U.S. with 2-day delivery, a key component in competing on speed against traditional brick-and-mortar players.

The physical assets supporting this network are substantial, as seen on the balance sheet for the period ending September 27, 2025.

The depth of the product offering is critical for capturing customer spend across repair, maintenance, and accessory needs. This is supported by the physical inventory and the digital catalog.

• Proprietary e-commerce technology: Replatformed website and AI-based search/recommendation engine.
• National distribution network: Provides 2-day delivery coverage to 95% of the U.S.
• Inventory: Valued at $94.3 million as of September 27, 2025.
• Product catalog: Over 1 million high-quality automotive parts and accessories.
• Mobile app: Over 1,100,000 cumulative net downloads, driving retention.

Furthermore, the technology investment extends to the mobile experience, which is increasingly important for revenue capture. The mobile app, with its over 1,100,000 cumulative net downloads, accounts for over 10% of e-commerce revenue as of early 2025, signaling a successful shift in customer behavior.

Here's a quick look at the scale of the digital assets mentioned:

Finance: draft 13-week cash view by Friday.

CarParts.com, Inc. (PRTS) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose CarParts.com over the competition right now, late in 2025. It's all about efficiency and selection, built on a digital foundation.

Seamless factory-to-consumer e-commerce: Cutting out brick-and-mortar supply chain costs

The value here is the direct digital pipeline. This model aims to strip out layers of traditional distribution costs. You see evidence of this focus in the operational metrics, even with recent headwinds. The company is actively working to align fixed costs with volume, streamlining corporate headcount and reducing underperforming software expenses.

• Variable contribution margin improved to the low 9% range in Q3 2025.
• In September 2025, average weekly sales of $9.0 million generated over $900,000 in variable contribution margin.
• In January 2025, average weekly sales of $9.7 million generated under $600,000 in variable contribution margin.

Fitment accuracy: Technology-driven experience to ensure customers get the right part

Getting the part right the first time is critical for customer satisfaction in this space. CarParts.com has been investing in the tech stack to make this happen. They launched a fully re-platformed website in fiscal year 2024 featuring an AI based search solution and machine learning based product recommendations.

Broad product selection: Offering over 1 million SKUs for repair, maintenance, and collision

The sheer breadth of inventory is a major draw. This is being actively expanded through strategic partnerships. For example, the partnership with A-Premium is expected to add 100,000+ new SKUs and boost mechanical parts coverage. As of the end of fiscal year 2024, the selection was already substantial.

Speed and convenience: Fast delivery with 2-day coverage to most of the U.S.

Logistics capability underpins delivery promises. A recent strategic investment brought access to significant fulfillment infrastructure. ZongTeng provides a global logistics network with over 24 million sq. ft. of fulfillment space, giving access to 50+ U.S. facilities. Furthermore, a semi-automated Las Vegas distribution center was fully operational in fiscal year 2024, handling 25% of company volume.

Competitive pricing: Direct sourcing and efficient logistics enable lower costs

The company is focused on driving profitability through cost discipline, which supports competitive pricing. They closed on a $35.7 million strategic investment in early September 2025 to strengthen product assortment and logistics capabilities. The A-Premium partnership alone is targeted for $50M incremental near-term revenue, with potential to exceed $100M annually over time. They expect to be free cash flow positive in 2026, which is a key indicator of future cost structure strength.

Here's a quick look at the recent financial snapshot supporting the operational model, based on Q3 2025 results:

The focus on owned channels is clear; they are trying to increase customer lifetime value. Mobile app downloads are a key metric here, showing engagement beyond paid search. If onboarding takes 14+ days, churn risk rises, so logistics improvement is defintely critical.

Finance: draft 13-week cash view by Friday.

CarParts.com, Inc. (PRTS) - Canvas Business Model: Customer Relationships

You're looking at how CarParts.com, Inc. connects with and keeps its customers in late 2025. The strategy has clearly pivoted from pure volume to profitable, repeatable engagement, especially given the focus on reducing reliance on expensive paid search.

Direct digital engagement: Fostered through the flagship website and mobile app. The company is actively working to monetize its significant digital traffic, targeting 100 million annual website visits for high-margin fee income opportunities. This digital-first approach is central to lowering overall customer acquisition costs.

CarParts+ membership program: This is a key element for locking in loyalty and generating recurring, high-margin fee income. The program offers roadside assistance and other perks for a set annual fee. The program is stated to have over 8,000 members as of late 2025. The annual fee for the membership is $79 per year, with an alternative payment plan of $9 per month for a 12-month commitment. Benefits include complimentary 24/7 roadside assistance and an extended 60-day return window, double the standard 30-day period for non-members.

The shift toward owned channels is showing measurable results in digital adoption:

• Mobile app cumulative net downloads reached approximately 1,000,000 by the second quarter of 2025.
• The mobile app accounted for 12% of eCommerce revenues in the second quarter of 2025.
• The company is aiming to reduce paid advertising spend to 12.5% of gross e-commerce revenue by 2026, down from 17.7% previously.

Lifecycle marketing and CRM: Initiatives are specifically focused on increasing customer lifetime value (CLV) by encouraging repeat purchases over one-time transactions. This is being achieved by rebalancing the traffic mix toward owned channels like the mobile app and CRM-driven efforts. The goal is to drive more predictable profitability through this enhanced customer relationship management.

Self-service online tools: Empowering drivers for vehicle maintenance and repair is built into the digital experience. The platform is designed to be a one-stop shop for repair and maintenance resources. This self-service capability is supported by the mobile app, which saw improvements in conversion rates and units per order in the second quarter of 2025.

The strategic partnership with A-Premium is directly tied to enhancing the value proposition for all customer types. This collaboration is expected to add over 100,000 SKUs to the assortment. Here's a quick look at the expected financial impact from this relationship:

Dedicated B2B sales: Scaling the wholesale channel is a stated priority for 2025 to diversify revenue streams beyond the core do-it-yourself (DIY) consumer. This involves adding higher-touch sales efforts and investing in last-mile transportation solutions in key markets to better serve professional installers. This B2B focus is intended to capture a larger market share and improve the overall margin profile.

Key metrics reflecting digital engagement and fee income growth as of mid-2025:

• Mobile App Users (Q2 2025): 1,000,000
• Mobile App Revenue Share (Q2 2025): 12% of eCommerce revenue
• CarParts+ Members (Latest Reported Q2 2025): Over 7,000
• Fee Income Growth Driver: Paid membership and services like product/shipping protection are showing record levels.

Finance: draft 13-week cash view by Friday.

CarParts.com, Inc. (PRTS) - Canvas Business Model: Channels

You're looking at how CarParts.com, Inc. gets its parts to the customer, which is really the engine of their entire operation. It's a mix of heavy digital presence and a physical fulfillment backbone.

The flagship e-commerce website, CarParts.com, remains the primary digital storefront, generating 100 million annual visits. This massive traffic volume is a key asset they aim to monetize further through high-margin fee income opportunities. Also, the mobile app has rapidly become a significant growth driver, accounting for more than 13% of e-commerce sales by the end of the third quarter of 2025. This is up from under 9% at the start of the year.

Here's a quick look at the digital channel performance as of the third quarter ended September 27, 2025:

The company is actively working to diversify away from pure transactional revenue by growing other channels. The wholesale commercial sales channel, which involves marketing products nationwide to auto parts wholesale distributors, was reported to account for approximately 5% of the overall business in the third quarter of 2024, with expectations for rapid growth. This B2B focus is a key part of their 2025 priorities, aiming to scale with last-mile transportation support in key markets.

The physical infrastructure supporting these sales is centered on the company-owned distribution centers, which serve as the core fulfillment channel. They are optimizing this network for speed and cost efficiency. You should note these specific physical channel components:

• Nationwide fulfillment network spanning 1.2 million square feet (as of late 2024).
• Opened a new semi-automated facility in Las Vegas, Nevada.
• Closed the Virginia facility at the end of October 2025 to align fixed costs with volume.
• Gained access to over 50+ U.S. facilities via the ZongTeng Group partnership.
• Inventory balance stood at $94.3 million at the end of Q3 2025.

Finally, selling through online marketplaces remains a channel, though it experienced softness in the second quarter of 2025, partially offsetting growth in the primary carparts.com channel. The company is focusing on its own channels and the B2B segment for more durable growth.

Finance: draft 13-week cash view by Friday.

CarParts.com, Inc. (PRTS) - Canvas Business Model: Customer Segments

You're looking at the core groups CarParts.com, Inc. targets to drive sales, which is crucial given their Q3 2025 net sales were $127.8 million. The strategy, as of late 2025, shows a clear shift away from purely cost-conscious acquisition toward higher-value customers and channels.

The customer base is fundamentally split between direct-to-consumer and commercial/wholesale opportunities. Historically, CarParts.com, Inc. catered to cost-conscious consumers, often relying on paid search advertising, but economic challenges in 2024 prompted a strategic pivot. The company competes with retailers serving both the Do-It-Yourself (DIY) and Do-It-For-Me (DIFM) customer segments.

Here's how the segments break down based on recent strategic focus:

• Individual consumers (DIY): This remains the primary base for repair and maintenance parts purchases through the main CarParts.com website and mobile app.
• Professional installers and repair shops: This is the targeted B2B segment, with the company actively scaling its wholesale operations and adding higher-touch sales in key markets.
• Vehicle owners: This broad group seeks collision, replacement, and mechanical parts, which the company offers through its selection of over 1 million parts.
• Higher-income, less price-sensitive customers: This group is a specific focus for the new acquisition strategy, intended to upgrade the customer base and improve the long-term margin profile.
• Premium and Higher-Margin Segments: The company is realigning around products to target higher margin sales and adding high-margin fee income, which aligns with reaching less price-sensitive buyers.

The focus on B2B and higher-value customers is yielding early results, particularly through strategic partnerships. For example, the contribution from the A-Premium partnership is already noted at $20 million annually. Furthermore, the mobile app is a key channel for engaging higher-value, repeat customers; by Q1 2025, the app, with cumulative net downloads near 900,000, accounted for over 10% of eCommerce revenue.

Here's a quick look at the segments and associated metrics as of late 2025:

The company is actively working to change its customer acquisition mix and margin profile. If onboarding for the B2B segment takes longer than expected, cash flow goals for 2026 could be pressured. The company is also focusing on growing its CarParts+ and Roadside Assistance Memberships, with over 7,000 members as of Q2 2025.

Finance: draft 13-week cash view by Friday.

CarParts.com, Inc. (PRTS) - Canvas Business Model: Cost Structure

You're looking at the core expenses CarParts.com, Inc. is managing right now to shift toward profitability. It's a tightrope walk: cutting spend while absorbing external cost pressures. Here's the quick math on where the money is going.

The Cost of Sales for the third quarter of 2025 was reported at $85.49 million. This number reflects the direct cost of the parts sold before any operating expenses are factored in. Gross margin for that quarter landed at 33.1%, which was down from 35.2% in the year-ago quarter, partly due to those import costs we'll discuss.

Total Operating Expenses saw a significant reduction as part of the strategic pivot. For Q3 2025, these expenses totaled $52.3 million, which was down from $60.9 million in the prior year's third quarter. This reduction came mainly from dialing back on marketing and adjusting headcount.

You've got to watch the logistics line; outbound freight and logistics costs are definitely increasing because of the current global transportation environment. The company is actively working to mitigate this, partly through a new partnership that provides access to over 50 U.S. facilities, aiming for better speed and efficiency.

The marketing strategy has been completely re-evaluated. The spend on marketing and advertising has been rationalized to improve efficiency, moving away from volume acquisition. By September 2025, this spend was brought down to 12.5% of gross e-commerce revenue, down from 17.7% at the start of the year. They expect continued improvement through 2026.

A major cost headwind comes from import tariffs, which hit the gross margin directly. Roughly 20% of CarParts.com, Inc.'s private-label products come from China, facing tariffs in the range of 55% to 75%. Also, products sourced from Taiwan are facing tariffs around ~25%. The company is managing this with vendor concessions, pricing adjustments, and sourcing diversification.

Here's a snapshot of the key P&L items for Q3 2025:

The focus on cost discipline is clear across several areas:

• Headcount reductions contributed to favorable payroll costs.
• Underperforming software was reduced to align fixed operating expenses.
• Variable contribution margin expanded to the low 9% range in Q3.
• The new partnership with ZongTeng Group is expected to lower fulfillment costs.

Finance: draft 13-week cash view by Friday.

CarParts.com, Inc. (PRTS) - Canvas Business Model: Revenue Streams

You're looking at how CarParts.com, Inc. is bringing in cash as of late 2025. The focus is clearly shifting toward higher-margin, more predictable income sources, even as the core e-commerce engine adjusts its spending.

• E-commerce sales: Net sales for the third quarter of 2025 landed at $127.8 million.
• High-margin fee-based income: This stream includes product and shipping protection, plus the CarParts+ membership program and roadside assistance. The company reported over 8,000 CarParts+ members as of Q3 2025.
• Recurring revenue: This fee-based income is currently running at nearly $4 million on an annualized run rate basis.
• Wholesale/B2B sales: Revenue comes from selling products to auto parts wholesale distributors, serving markets like crash-avoidance parts.
• Private label sales: Sales from the A-Premium partnership are trending at an approximate $20 million annualized run rate, with potential to exceed $100 million annually over time.

The strategic investment secured in early September 2025 totaled $35.7 million, which is meant to bolster product assortment and logistics, supporting these revenue paths. Mobile app revenue, a key driver, increased to more than 13% of e-commerce sales by the end of the third quarter.

Here's a quick look at the top-line performance from the latest reported quarter:

The company is actively managing tariff impacts, noting that products from China face rates from 55% to 75%, while those from Taiwan are subject to about 25% tariffs. Finance: draft 13-week cash view by Friday.