Auto Service World
Feature   April 1, 2000   by Auto Service World

COVER STORY: Keeping on Track

While the front wheel drive segment isn’t growing at the same rate as it used to, it’s still growing and changing. Here are some key indicators to review to see if your business is addressing the market effectively.

Empirical research indicates that front wheel drive front-end parts sales make up about 15% of overall sales. If this ballpark figure doesn’t agree with yours, it’s worth looking into.

Review your overall sales concentration by model year if possible. If your customers are servicing older and older cars, perhaps they’re missing opportunities for higher-dollar work.

If you’ve resisted adding a “price” line for fear of losing sales in your premium line, you may be losing sales and profit. While there will surely be some cannibalization, don’t forget to consider the sales you may be losing to the competition by not serving that market.

Tracking lost sales is an important component of addressing the market you serve; balancing your order volume, inventory investment and special orders with the lost business from lost sales is critical. The few percent you lose from ordering below the prepaid freight minimum may be well worth it. Giving up 30% margin on a sale to save 4% doesn’t make sense.

Look for niche markets that aren’t so price sensitive. Import performance enthusiasts–particularly the drag racing segment–go through CV shafts in record time.

Be prepared to continually expand your part numbers. The market continues to be the object of fragmenting applications–heavy-duty, regular duty, with ABS, without ABS, date of manufacture all take their toll on turns and inventory investment.

Broaden coverage and try to watch as new models enter their aftermarket service years.

Watch as older models drop from first line customers to second line and then off the map altogether. If your top 10 numbers are the same as five years ago or even two, your inventory is overdue for an overhaul.

Core: a four-letter word for many jobbers. It’s not unusual to have a core be worth more than the part you’re selling. Fail to inspect cores at your own peril; an unusable core will come back to haunt you weeks or months later. Making proper core inspection a part of sales and billing procedure is worth the effort and it is probably worth making this a “core” function of somebody in your business.

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