In a recent conversation with Jeremy Baratto, the Parts Manager of Team Chrysler, we had the opportunity to get some invaluable feedback about our parts exchange program. It was interesting to find out what provoked him to sign up, his perspective on the benefits of using our program and hear his side of the story. We are grateful that Jeremy has allowed us to share some of his insight.
Initially, we wanted to know what problems Jeremy had in his parts department, prior to joining NADPE. His response was: “I always wanted, and believed, that I had a low percentage of inactive inventory. With the increased parts return limitations I was receiving over the years from the factory, I noticed an ongoing increase in my inactive inventory. I also have a problem with MSQ’s (minimum sales quantity) packaged parts…you know I need 1, but I have to buy 5 or 10.”
We asked if he thought this was an industry-wide problem. Jeremy responded: “I do, the OEM’s to me is saving money from every angle. The amount of return value the dealers can accrue is declining. Therefore, the dealer’s inventories are swelling. As well, the number of parts with MSQ’s have increased.” He later went on to mention: “with NADPE, you can even exchange parts that the Manufacturer won’t take back. You can exchange parts that have MSQ’s, rather than sitting on 9 of one part# because the MSQ is 10 and the Manufacturer will not take back 9. You have the potential to trade them for something that will sell off your shelf.” So all-in-all, NADPE came as a huge relief, enabling dealers to get rid of those parts and help reduce the swelling.
In many of our posts, we discuss the importance of how a Parts Manager is the “money manager”, in the parts department. In relating that to Jeremy, we asked if he thought this was a problem work solving. His response, which directly correlated with the opinions of NADPE, was: “I respect my Dealer Principal, after all, this is his money, and I am responsible for it. If I’m not treating his money like it was my own, then I’m not respecting him/her.” Great advice from a successful parts manager.
When presenting NADPE to potential new customers, a common question we get asked is: “Does it work?” If Jeremy could answer for us, he would leave no doubt in your mind that it does. In fact, he gave us some numbers, to prove that it does. “The amount of inactive inventory is reduced, my over 12 months on hand went from over $13,000.00 to as low as $3,500.00, and I still have return accrual available”, said Jeremy.
So, why then did it take him so long to get signed up? What was his hesitation? Jeremy’s response was: “To be honest, I really wasn’t aware of these programs. I had heard of them, just didn’t really focus my attention on them, for a long time. There is always the fear of trying something “new”. We are creatures of habit and are afraid of change. Also, of course, the question that everyone asks. How much is this going to cost me?” We then asked what it was that put his fears to rest. He answered: “The cost is reasonable, for what seems to be a large effort, that is put into this. The process is simple and if there are any questions the staff is very knowledgeable and friendly to work with.’
Jeremy has been a great promoter of NADPE, so obviously, we wanted to know what he liked most about our program, and what ensued him to recommend NADPE to others. Jeremy’s rewarded us with this response: “The satisfaction of knowing inactive parts are going out the door in exchange for active parts. For what I consider a small fee, the results are impressive. If the Dealer Principal ever asks how much inactive inventory they have, you might as well be prepared with a low number.”
In closing, we asked Jeremy what he would say, should he recommend NADPE to another dealer who might have hesitated. He said: “Keep an open mind and remember what you’re doing for the dealership. $20,000.00 in stale inventory can be used to buy a couple used cars and sell them for a profit. So why have that kind of money sitting on the shelf in the parts department?”