On average, idle and obsolete parts inventory comprise 30% of inventory on the shelves of every dealer in North America. Idle parts include non-stocking and phased-out parts.
Non-stocking parts are those parts that were unsold or returned special order parts while phased-out parts are those parts that have lost their sales demand and haven’t sold in the last 9 months of the last 6 months for more progressive dealers.
It’s an industry rule-of-thumb that when some parts sit in stock for nine months with no sales, there is only a 15% chance that they will sell. After 12 months, the probability of selling them drops to 5%, which means that there is 95% they will not sell at all.
Unfortunately, dealerships only have a few options to recoup their lost for idle parts inventory such as selling them for scrap, toss them in the garbage, auctioning them, or selling them online.
Randy Buyers, Parts Manager at Ontario Chrysler, on the other hand, don’t see these as an option, “I’m not selling my obsolete parts inventory for 50 cents on the buck – when I have other avenues to get rid of them where I don’t have to discount them”.
While there’s a growing concern about obsolete, and idle parts inventory in every parts department, selling idle or obsolete parts inventory for 50 cents on a dollar or even less is no longer thought of as a great avenue.
Today there’s no need for dealers to sell their idle parts inventory through different avenues with major losses. NADPE has designed a parts exchange program that helps dealers prevent losing to half the value of their parts inventory.
NADPE’s Parts Exchange Program is a solution that allows dealers to exchange their slow-moving inventory for active, and fast-moving parts inventory. Through this program, parts managers can get the full dealer cost of their idle parts, no matter how long they’ve been on their shelves. Parts managers will no longer be forced to sell their idle parts in different avenues hoping to get one-half of their investment before tossing them, where they ultimately get zero.
“The parts exchange program turns inactive parts inventory into current and fast-moving parts without me having to lose my shirt by discounting them. In other words, I’m really retaining and getting back what I got into my inactive parts”, says Buyers.
Learn more about the NADPE’s Parts Exchange Program by visiting NADPE.com