Idle Inventory: aka Obsolete Parts
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In the midst of the biggest automotive crisis of all time, dealerships now more than ever are finding themselves stuck with idle inventory. Some may be using dealer to dealer programs and inventory swapping to help each other gain inventory that is more sell-able in their markets. |
One of the biggest and most appealing trends happening in the dealerships, is the concept of liquidating the inventory by selling it off to a wholesaler for 50 cents on the dollar. This is if you let the buyer pick and choose what they want to purchase. If a dealer wants to get rid of everything and does not allow the pick and choose method they will be lucky to get somewhere between 10 and 20 cents on the dollar.
I can see why a dealership facing possible shutdown would be tempted or even required by the owner to take these measures to free up as much cash as possible. However unless in dire need I am not a fan of these cash discovery or inventory liquidation programs. Think about it for a minute, if the inventory is just sitting there and not really hurting you why not find a way to sell it for a profit? There are different methods out there to get this done. Here is a short list of options:
* Amazon.com
* eBay Motors
* MyObsoleteParts.com
Here are the three biggest players out there (in no particular order).
Amazon.com is getting into the automotive parts market. Currently most of their automotive clients are after market suppliers, but Amazon encourages dealerships selling OEM parts to sign up. Amazon charges $40 per month for their basic package and 12% of the revenue for each part sold. It also will need to be maintained closely by a member of the dealership staff to make sure inventory is up to date.
ebay Motors as we all know is huge. They sell a very high number of parts and accessories both OEM and after market. This also requires the dealer to manage this to make sure that everything is up to date. There are a number of third party companies out there that can help you streamline your listings onto eBay to make it less time consuming for the dealership. eBay runs on a listing fee for each listing, and then adds a charge based on the selling price of the parts.
MyObsoleteParts.com is the new kid on the block. You know the kid that has something to prove and has an innovative grasp on the industry. There are no listing fees associated with the program just a one time set-up fee and revenue share on parts sold. There is also not a monthly fee at this time, or any limits to the number of parts that can be submitted on the site. The major difference with MyObsoleteParts.com is that there are not after market parts allowed on the site. It is 100% OEM so you as the dealer will not be competing with a less expensive copy of the OEM part.
Whatever you choose make sure it is the correct fit for your department. There are a lot of dealerships that have not considered going to the Internet beyond signing up with companies that connect their inventory with other dealerships selling the same stuff. Its time that dealerships started making there parts known to the world and not just other dealerships.
For questions regarding any of the above programs please contact the companies and all would be more than happy to explain the benefits of creating a relationship with the Internet.
By: Adam Judson - CEO - Auto Dealer Improvements
