Used Car Sale! 10 Cents On The Dollar

Got your attention??
You’ll find 4 Used Dodge Caravans in Parts Department, but in a 1000 pieces, called Idle Parts Inventory, which will be written off or sold at 10 cents on the dollar when it reaches 12 months old. If this happened in Used Car Dept – what would you do? I speculate, not what you do in Parts.
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Parts Dept Affects 50% Of Your Dealership

It’s time to understand that the Parts Department is a major department, that needs as much attention from upper management, including the Controller as any other department. Fixed Ops is half of your business, and the Parts Dept has their hand in all of it, but I’d venture to say gets less than 5% of your time and attention.

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Parts Is Like Voodoo

Parts Department is the only department in your dealership that only 1 person really understands. In every other department, multiple levels of management understand how it works, and how to make it successful.
In Parts – that’s not the case. It’s time to understand that the Parts Department is a major department that needs as much attention from upper management, including the Controller, as any other department. Fixed Ops is half your business, but I’d venture to say it gets less than 10% of your time and attention.

Money Manager – Your Parts Manager

With the lack of OEM Return Allowance, it’s critical that your Parts Manager has all the tools to succeed, including training. What if we wrote off Used Cars and tossed them in the garbage? Or received 10 cents on the dollar? Parts is no different, except it’s a Dodge Caravan in thousands of pieces.
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Ol’ Days – Parts Manager Was An Inventory Manager

…but today, Parts Managers are Money Managers. Although this was true then, it’s especially true now. For example, Ford USA dealers don’t have return allowances. Many other OEM’s have cut Return Allowance down dramatically also, on an already insufficient allowance.
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Parts – Largest Unfinanced Capital Asset

Parts inventory isn’t floor planned, meaning every dollar tied up in Parts Inventory is the dealer’s own money, and funded by the Dealer’s bank account. It’s important on many levels why parts inventory must “turn”. Especially with a large amount of dealer capital invested.


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30 Days Is Enough – Even Too Much

30 days is more than enough time for anyone to pick up or install Special Order Parts. Unless a customer has vacation during that period, or another part is on back-order, there should be 0 Special Order Parts that are tagged, and held for a customer after 30 days. This includes a Service customer.
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Special Order Parts – You Have 30 Days

Besides Prepaying Special Order Parts and Pre-Booking Service appointments, there is another way to accelerate Special Order Parts pick-ups or installs. Implement a 30 days policy. If it’s not gone within 30 days, it’s someone else’s part. This creates urgency.
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Service Pre-Paid Special Order Parts – Pre-Booking

On top of getting Special Order Parts Pre-Paid in service, a better way to ensure your customer will return and get the parts installed, is to pre-book the customers next appointment. This is possible, and should be done for every customer, who’s part isn’t on back order.
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Service Implementation Of Pre-Paid Special Order Parts

Yes, you can implement Pre-Paid Special Order parts in Service for retail customers. This process isn’t any different than doing it on Retail Counter invoice. It simply requires Service Management on board.
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