Looking for ways to maximize your gross profit %?
In my 30+ years of experience working in dealership and collision repair facilities, I have found many helpful tips and tricks on ways to maximize a facilities parts gross profits.
In this quick read, we will explain some of the key areas that you could focus on today to get your parts department moving in that same direction.
1.) Follow the "Digital" Parts Mirror Matching Process
One of the biggest things I see when coaching Collision Centres in their parts department is the "lack of attention" put on the initial parts order. We constantly say how critically important mirror matching is, but why would we wait for the wrong part to arrive before "mirror matching" begins?
What I believe is helpful is to "digitally" mirror match your parts ahead of time so when your parts arrive, it's a quick glimpse of what was delivered.
The way we see it at PSI Coaching is you really only have one "real shot" to order the parts correctly that, usually, the estimator/repair planner puts on the estimate, so they better be correct or else, well, you know...there is a hold up in the repair cycle.
What I recommend is for the person ordering the parts to put the time in at the very beginning to review the damaged photos (in the management system or estimating system) and compare the damages to what is showing on the original parts list.
"Put the time in at the very beginning"
This will help to confirm things like...
1.) Colour of Emblems, Text, Size and Shape and Colour of Mouldings
2.) Grooves, Holes, etc on bumpers or on other parts.
3.) Headlight Details, LED or Halogen? 1 Bulb or 3 Bulbs?
4.) Verify there were no parts missed or overlooked
5.) You can also verify that there are no "sub" parts missed. For Example. Did they add all the nuts, bolts, brackets, etc that are supposed to be on order?
As we believe in working together to create an efficient and effective team workflow, it's important to be the 2nd or 3rd set of eyes for the repair planner or estimator.
By spending the time, in the beginning, to look over this information, we see a ton of value in eliminating the need to order parts 2 or 3 times throughout the repair cycle. As you may know, supplements are a common thing but we truly want to keep those to a bare minimum.
2.) CollisonLink and Partsbridge are great tools for negotiating prices.
CollisionLink and PartsBridge can be your money making best friends. No, Seriously. You just need to know how to properly utilize and get the most out of these systems to maximize what you need.
I recommend getting to know these systems quite well through training to see how they are able to help you maximize what you need for your part orders.
3.) When Ordering Used Parts, Request a Photo in Advance
Save yourself the work if the used part is not worth the delivery.
Prior to ordering the part, I always call or email the parts supplier and ask for them to send over a photo in advance. I do this for a few reasons...
1.) I know in advance what I'm getting myself into. What condition is the part in? What work is involved? Will repairs be required?
2.) This helps to confirm my initial estimate and what comes already attached to the part itself. Did the estimator put down enough time to R&I and/or clean up the part?
3.) Now I can "Digitally" Mirror Match my part and confirm it's correct as well.
Please keep in mind that used parts are exactly that, “used” and sometimes aftermarket or even OEM will save you money if the used parts are too damaged to work with.
4.) Return damaged or wrong parts right away.
Life gets easier when your technicians get into a habit of making sure that when a part is not being used or has to be "credited" that it gets handled immediately.
Having a properly organized system really helps to ensure that the technicians can easily do their part (by indicating to you which parts need to be returned) and keeps you somewhat sane while juggling 100 things at once.
I must stress, it is important that parts get handled almost immediately for a proper efficient and billing system. This includes Core Charges as well.
And don't forget to follow up with the Vendor for credit invoices consistently as well so that things don't get missed or forgotten.
5.) Revisit your Parts Discounts.
Lastly, it is easy to get so busy that you don't have time to think about ways to improve the department and make things better. That's why we suggest during your slower periods, whether it's once a year, or every quarter...when things do get a bit slower to revisit what discounts and dealers you are currently working with and are they giving the best possible discounts? It never hurts to shop around and see what others are providing in the area and if you're getting the best discounts for what you spend.
The last thing I want to leave with is that the parts department is a major component of the top 5 income streams of a Collision Repair Facility. That's why we see the importance to put a ton of attention to your parts department being as efficient and profitable as possible. It's a key component to you making the money you deserve.
If you're interested in any of our services, you can check our coaching section on our website at https://www.autoplusperformance.com/customer-experience
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