More than a year ago, Honeywell launched an aviation parts marketplace called GoDirect Trade, with the goal of improving the way used and new parts are purchased. “We thought it would be interesting to build this marketplace and move it into the digital [realm],” said Lisa Butters, general manager of GoDirect Trade and product application owner of all Honeywell blockchain activity.

GoDirect Trade is by no means the first online aviation parts trading system, and many other companies offer online aviation parts platforms. According to Butters, there are about 20 competitors, including companies such as Inventory Locator Service (which Boeing recently agreed to sell to Camp Systems), PartBase, and Locatory. However, she claimed, none of these mirror the ease of use and simplified payment processes of Amazon, and that is what GoDirect Trade is trying to replicate.

The new and used aviation parts business is a $4 billion to $5 billion industry, Butters said, “but nothing [aside from searches] is done online.” Buyers and sellers complete transactions via telephone and email, and in person. “You don’t check out [on a website],” she said. “We’re trying to attract a user community to check out online rather than creating a listing service.” Honeywell did consider buying another parts marketplace but preferred to build a new one with modern e-commerce attributes, including easy payment methods. “If you acquire,” she said, “you’re paying for users and not an e-commerce solution.”

To be clear, GoDirect Trade isn’t targeting the light-airplane-owner who needs an oil filter and can go to Aircraft Spruce’s website and complete the transaction there with relative ease. The Honeywell unit serves far more complex and expensive items, such as turbine engine and APU parts or even whole engines, integrated drive generators, avionics, and much more for airliners and business jets.

That isn’t to say a company that sells light aircraft parts couldn’t open a storefront on GoDirect Trade because anyone can. As GoDirect Trade is still in its infancy, Honeywell is offering a free six-month membership for new storefronts. Companies can sell an unlimited amount of product during those six months, then afterward pay $500 per month. “Our priority is the adoption rate,” Butters said. “We want to get as many sellers as possible so buyers will come.” The strategy is to get the rate of storefront adoption up, then in a few years transition to a transactional model, with a sliding scale for transaction fees.

“We allow anybody from a mom-and-pop to multibillion-dollar enterprises to launch a storefront in less than five minutes,” she said. “You can load your logo or we build one, put up a banner image and information, then select how you want buyers to check out. People can then see [and buy] what you have to offer.”

GoDirect Trade had 65 storefronts as of late April, ranging from small outfits to big names like Duncan Aviation, Dallas Airmotive, and Boeing. The sellers carry more than $2 billion in inventory and over 100,000 unique part numbers. Since launching, GoDirect Trade has generated $7 million in sales and 2,000 part numbers transacted. Currently, there are about 7,000 users from 3,000 companies using the platform.

Along with each part come provenance documents and product images, so the buyer can be confident that the part is legitimate. So-called “ghost listings” are not allowed on GoDirect Trade, Butters explained, highlighting the problem of multiple parts brokers bidding against one another to sell the same part. “In order for the seller to list a part,” she said, “they have to have the price, product images, and paperwork tied to it. Effectively we can’t have ghost listings unless they’re stealing somebody else’s documentation.”

For payments, most buyers use a purchase order or credit card, but GoDirect Trade wants to add other payment systems that allow buyers to open revolving lines of credit for their transactions. Of course, buyers and sellers can conclude transactions outside of GoDirect Trade using systems such as Paypal, Venmo, or Square.

Having a bunch of storefronts on an e-commerce website is a good start, but, said Butters, “One of the key metrics is search success. When a buyer comes on, how successful are they?” Currently, the success rate is about 70 percent, which means buyers find what they’re looking for 70 percent of the time. “We need to be in the 95 percent range,” she said. And to improve that number, she added, “We analyze every day what they’re searching for that we don’t have in stock or have a seller. And we actively go after sellers to get those parts.”

Eventually, Butters sees GoDirect Trade offering many new services such as distributorships for aircraft manufacturers, training, data streaming, and software applications, all related to aircraft parts. “If we can be in the center of these transactions, we would have a very good understanding of what’s going on in aerospace,” she said.

To keep its operation independent, GoDirect Trade doesn’t share any data with Honeywell. But GoDirect Trade analysts do look at search and transaction communications to see, for example, whether sellers are responding quickly to buyers. This will inform design changes to help improve the e-commerce platform.

Butters is also responsible for Honeywell’s blockchain activities, and this fits well with GoDirect Trade’s requirement for parts to come with comprehensive traceability documentation.

When considering the purchase of a part that costs upwards of $10,000, being able to trust that the part meets all the requirements to be installed in an aircraft is a significant issue.

In fact, when GoDirect Trade first opened, there was some hesitation among purchasers to click the buy button, and that is why so many parts websites rely on phone calls and emails between the buyer and seller. “We knew it was an inherent trust issue in this industry,” Butters said. “We looked at blockchain because it builds trust between two parties.”

Blockchain uses cryptography to link the records in an open ledger that can easily be shared between two parties, thus bolstering the trustworthiness factor. Blockchain protects the valuable documentation for all the parts in GoDirect Trade, ensuring that their pedigree is maintained. Honeywell calls this documentation Trust Trace, and it shows where the part came from, information about everything that has been done to it (overhaul, repair, inspection), and who performed the work.

“It’s like Carfax,” said Butters. “We try to use blockchain in the same way, to get as much information as we can about a serialized part to give to the consumer.” Ultimately, the blockchain ledger could contain even more information—for example, whether the part was removed from a wrecked aircraft or whether a component had been through a few rounds of no-fault-found cycles.

“The nuts and bolts are there, and we’re just building out the ecosystem, with more information on the blockchain to answer those questions,” she concluded.