It's a question that plagues parts managers: What to do with those obsolete and slow-selling parts?
Inventory that sits unsold costs the dealer money. The problem is becoming harder to manage as parts today have a shorter shelf life. A manager who maintains a 5% parts obsolescence rate is doing well.
Some parts managers are turning to the Internet to develop another sales channel for slow-selling parts. The Internet can expand a dealer's marketplace level from local to regional, national or even global.
An Internet sales channel getting attention lately is eBay Motors. It claims to have nearly $1 billion in gross merchandise sales. A part or accessory sells every two seconds on eBay.
But before a parts a manager begins listing inventory on eBay, a strategy needs to be thought out, says Paul Nadjarian, senior manager for eBay Motors.
“You need that commitment from senior management,” he says. “If you don't have that, don't do it.”
The parts manager often is the busiest person in the dealership who's reluctant to take on projects without support from the dealer principal.
To leverage the Internet, the parts manager should assign at least one person as a dedicated channel manager, much like a sales department's dedicated Internet sales manager.
Nadjarian advises dealers against placing their entire inventories online. Instead, he says, dealers should use eBay to move high-end parts for niche or specialty vehicles as well as low-end old parts that are selling poorly. Discount pricing is probably necessary to move the latter.
Otherwise, the bulk of parts inventory probably doesn't belong on the Internet. “The market is so big just in the bookends — the high- and low-end parts — we don't want to focus on that middle portion,” says Nadjarian.
A good strategy means having a realistic approach to what an Internet presence can provide. “If you can get a couple of points of efficiency, that can go directly to the bottom line,” he says.
Other critical pieces are digitalized inventory information and product presentation. Listed parts with digital photos far outsell ones without visual aids, according to eBay research.
The same goes for parts with detailed features listed. Unlike a parts catalog where information is limited to only a couple of lines, dealers aren't constrained by space and can provide much more information to help move the part.