| Parts Department Attitude Adjustment |
|
The Life Cycle of a Part
Many parts Managers have had very little guidance
on the life cycle of a part on take the dealerships
investment in inventory to dangerous levels in age
without a sale. The cycle of a part begins with
Technicians asking for a needed item at the counter.
At this stage the Parts department would not have
any record in history. The correct action would be to
record a lost sale and attempt to find the needed
item. Many parts departments do a poor job tracking
lost sales. My definition of a lost sale is any time a
needed part for service is not in stock and gross
profit or return reserve is lost to another vender. This
includes items that are called emergency purchases. I
understand that this practice will create another
demand in history, however phase in can be adjusted
up one top compensate for this. This makes one
place for a manager to review and track for lost
sales.
After the part generates enough history for stocking
it will sell for a period of time then stop selling and
become dead or aged. If phase out is set to a
recommended 6 month cycle the next sale after that
period of time will not generate an order and keep
aged inventory in line. The next event in the cycle is
to return the item to the distribution
Find out more....
|
|
| |
Greetings!
This month we take a look at a few keys in the parts
department that will unlock gross profit and control
aged inventory.
|
| |
| |
| |
| Matrix Pricing |
| |
Many managers believe Matrix pricing is just a way to
get more from the customer and don’t understand the
logic why this is a good business practice. If you took
your total parts department operating costs and
divided by the number of parts sold you would have
an actual cost per part sold. Let’s say the average
cost per part sold in your dealership is $5.00 You
then must add the purchasing cost to this amount to
get the dealerships actual cost to bring this item to
the customer. The idea behind the matrix is to
increase gross profit as a percentage of sales on
lower valued numbers to reduce the loss to the
company on these items. I understand you might
have never looked at your average cost of operation
per part however this example shows the need to
improve margins on these lower priced items. Be
aware of your average cost per part and adjust or
install your matrix to improve your parts department’s
gross profit.
|
| |
Read on... |
| |
| Company Update |
| |
Rob Gehring will be on vacation June 10th through
June 17th. He will check cell phone messages and
respond when possable. Fixed Performance will be
adding another
Consultant so additional additional dealerships can be
added. July is almost sold out so now is this time to
book your store and begin to improve fixed
operations. Call Jay at 419-651-6934 for more
information.
|
| |
Read on... |
| |
| Huge Cash Generator |
| |
|
Find out how to retain your customers and generate
huge amounts of cash for only a $400.00 investment.
Call Jay at 419-651-6934 for more details!!
Our Price:
$400.00
Learn More
|
|
| |
|
