FACT: Wholesale parts sold through a new car dealer is typically 85% Collision & 15% Mechanical.
FACT: The on-hand inventory at a typical dealership is 85% Mechanical & 15% Collision.
Wholesale parts are one of many sales channels that parts managers have total and complete control over. However, many are focused on the ultra-competitive collision segment, where margins on highly competitive parts are non-existent. The orders are high-dollar, the returns are excessive, and the accounts need to be serviced to ensure continued purchase retention.
Mechanical parts are usually 90-95% captive, which means they are not available elsewhere. They come with a top-shelf warranty and are readily available. Three things are needed to capture this higher gross profit segment and help increase inventory turnover (turn rate) of your 100% cash inventory investment. You don’t have to be the cheapest, but you have to provide the most value.
Build Strong Relationships
Having a high level of knowledge about your customers’ needs & expectations is crucial. Anticipating your customers’ needs is a vital component to establishing a strong relationship with them. Deliver them market insights into what kinds of parts are seeing an uptake in demand, what types of vehicles are getting the most repairs in your area, and how their consumer values are changing. Showing a vested interest in helping them become more efficient and profitable will make you much more valuable.
Level Up Your Delivery Service
Time is money. The longer the car sits on the lift, the more productivity and profits the shop loses. For mechanical parts, a 1-hour “Hot Shot” delivery is ideal to keep business going. Offering a fast and convenient delivery service directly from the parts department is essential to growing and keeping your wholesale business. If your dealership has limited resources and you can only send out one driver at a time, look to third-party delivery services to see if you can increase your value without spending too much.
Offer 24/7 Online Shopping
ISP shops need timely and accurate price and availability information complete with part numbers to prepare in-house repair estimates. Phone calls to the dealer are extremely time-consuming and oftentimes inaccurate. Many times, customers call the dealership but never reach the parts counter.
Online shopping tools like a 24/7 online parts catalog are a necessity. The best part is that your parts business is open 24 hours a day. It offers the customer the accurate information they need and will drastically cut down on the amount of non-revenue generating inbound telephone calls. Online-offline business models are extremely valuable for many wholesale customers. If time is of the essence and it’s easier for them to pick up a part after they’ve purchased it online, you can easily fulfill parts orders in time for them to arrive at the parts counter.
Keep Your Wholesale Customers Happy
Capturing wholesale customers is half of the battle. Maintaining their business and delivering their needs effectively is just as important. How can you ensure that your parts department consistently wins new wholesale customers? Check out our “The Roadmap to Winning More Local Sales” to learn how you can offer better services to your wholesale customers.
