Fixed Ops Journal - October 2017 - 12

FIXED OPS JOURNAL

 Managing parts
inventory gets
tougher I PAGE 16 I

Parts players
These are among the major programs
that help dealerships sell or trade
unwanted and obsolete parts.
CASH DISCOVERY (CDK GLOBAL)

PARTING
WITH PARTS

 Options abound for dealerships to cut

costs by selling or trading obsolete inventory

D

ALEX KWANTEN
foj@autonews.com

ealers and fixed operations managers are taking aggressive steps to
dispose of their parts desks' unwanted and obsolete stock, even as
factory parts return policies grow stricter.
More vendors are offering software and other
products to help them do that.
Mike Nicholes, an industry consultant in
Post Falls, Idaho, pegs the annual holding
cost of a typical dealership's parts inventory at
25 to 28 percent of its total value.
At least 80 percent of inventory should consist of fast-moving parts that will sell within
six months of delivery to the dealership, Nicholes says.
"If I have obsolescence back there that's not
turning," Nicholes told Fixed Ops Journal,
"that's like the used car sitting on the lot for
many months."
Traditionally, the industry has defined an
obsolete part as one that fails to sell within a
year, Nicholes notes. But he and other analysts now say nine months is a more realistic
cutoff point.
After that, Nicholes says, if a part can't be returned to the manufacturer - through increasingly narrow return allowances or guarantees in recommended stock programs - a

PAGE 12

OCTOBER 2017

dealership should look for other ways to get
rid of it.

Parts hoarder
Don Johnson is parts director of J.C. Lewis
Ford, a trio of dealerships in Georgia. When
the group acquired a store in Hinesville, Ga.,
last year, Johnson discovered that nearly 15
percent of its $120,000 parts inventory was obsolete.
"The previous guy didn't believe in throwing
anything away," Johnson says.
To trim parts inventories at all of the dealerships, Johnson turned to the most popular
method of disposing of unwanted parts: discounting.
He relied on D2D Link, a listing program
that is geared toward selling individual parts,
and PartsBrokerDirect, which handles larger
transactions. OEConnection operates both
programs.
D2DLink and PartsBrokerDirect list parts at
half off, a standard industry practice. OEConnection product manager Patrick Miltner calls
that rate "a good balance between the seller
getting enough money back for something
they otherwise won't be able to sell, and an incentive for buyers to go out and purchase it."
see PARTS, Page 14

 Parts-discounting program
 Includes about 2,200 dealerships
 Charges 7% commission
 Open to all brands
 Established: 1999
DEALERMINE

 Discount buy/sell platform
 Includes more than
3,500 dealerships

 Charges parts buyers

7% commission, parts sellers 5%;
no monthly fees
 Open to all brands
 Established: 2002
ORBIT (DEALERSHIP CSI)

 Parts-trading platform
 Includes 250 dealerships
 No commission; charges non-

Dealership CSI clients $295/month
fee for as many as 4 trades a year
 Open to all brands
 Established: 2012
D2D LINK/PARTSBROKERDIRECT
(OECONNECTION)

 D2D individual parts-discounting

platform; works with Ford and GM

 PartsBrokerDirect bulk parts-

discounting program; open to all
brands
 Includes more than 10,000 stores
 7% commission from buyers, 6%
from sellers, no monthly fees
 Established: 2011 (Parts Broker
Direct), 2002 (D2DLink)
NADPE

 Parts-trading platform
 Includes 150 dealers
 5.99% commission, $150 monthly
fee
 Open to all brands
 Established: 2017



Table of Contents for the Digital Edition of Fixed Ops Journal - October 2017

Fixed Ops Journal - October 2017
Contents
Editor’s Letter
Service Counter
Legal Lane
Dealers vs. OEMs
Parts disposal
Chicago way
Certifi ed repairs
Richard Truett
After the deluge
Labor rates
Off lease, on the lot
Paragon model
Feedback
Net benefi ts
Sometimes on Sunday
Get ready
Shop Talk
Five Minutes With
Fixed in Time
Fixed Ops Journal - October 2017 - Intro
Fixed Ops Journal - October 2017 - Fixed Ops Journal - October 2017
Fixed Ops Journal - October 2017 - Cover2
Fixed Ops Journal - October 2017 - Contents
Fixed Ops Journal - October 2017 - Editor’s Letter
Fixed Ops Journal - October 2017 - 5
Fixed Ops Journal - October 2017 - Service Counter
Fixed Ops Journal - October 2017 - 7
Fixed Ops Journal - October 2017 - Legal Lane
Fixed Ops Journal - October 2017 - 9
Fixed Ops Journal - October 2017 - 10
Fixed Ops Journal - October 2017 - Dealers vs. OEMs
Fixed Ops Journal - October 2017 - Parts disposal
Fixed Ops Journal - October 2017 - 13
Fixed Ops Journal - October 2017 - 14
Fixed Ops Journal - October 2017 - 15
Fixed Ops Journal - October 2017 - 16
Fixed Ops Journal - October 2017 - 17
Fixed Ops Journal - October 2017 - Chicago way
Fixed Ops Journal - October 2017 - 19
Fixed Ops Journal - October 2017 - 20
Fixed Ops Journal - October 2017 - 21
Fixed Ops Journal - October 2017 - 22
Fixed Ops Journal - October 2017 - 23
Fixed Ops Journal - October 2017 - Certifi ed repairs
Fixed Ops Journal - October 2017 - 25
Fixed Ops Journal - October 2017 - 26
Fixed Ops Journal - October 2017 - Richard Truett
Fixed Ops Journal - October 2017 - After the deluge
Fixed Ops Journal - October 2017 - 29
Fixed Ops Journal - October 2017 - 30
Fixed Ops Journal - October 2017 - 31
Fixed Ops Journal - October 2017 - Labor rates
Fixed Ops Journal - October 2017 - 33
Fixed Ops Journal - October 2017 - Off lease, on the lot
Fixed Ops Journal - October 2017 - 35
Fixed Ops Journal - October 2017 - Paragon model
Fixed Ops Journal - October 2017 - Feedback
Fixed Ops Journal - October 2017 - Net benefi ts
Fixed Ops Journal - October 2017 - 39
Fixed Ops Journal - October 2017 - Sometimes on Sunday
Fixed Ops Journal - October 2017 - 41
Fixed Ops Journal - October 2017 - Get ready
Fixed Ops Journal - October 2017 - 43
Fixed Ops Journal - October 2017 - Shop Talk
Fixed Ops Journal - October 2017 - Five Minutes With
Fixed Ops Journal - October 2017 - Fixed in Time
Fixed Ops Journal - October 2017 - Cover3
Fixed Ops Journal - October 2017 - Cover4
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