The Easiest Way To Increase Your Parts Profits

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Welcome everybody to the big show. This is your Friday drive by where we answer your questions. I'm Chris Collins and this is Chris Joan.

Hello everyone.

Hello, hello. We have a fun question for you today.

And maybe get a pen, paper, open up notes on your phone. Write down this number. It's 8333-ask-SDR. That's 8333, ask SDR. That's the hotline you call in if you want to have your question answered on the show. Now we had a question last week that I came up with some, some other ideas for. So the question was from a manager that said I have an advisor that, that pisses off about 75% of his customers. But 25% of his customers are really, really heavy.

Ecstatic.

Yeah. So he has a 75% failure rate in dealing with customers. And.

We gave our advice and you might want to go back and listen to that episode. But I thought of some other career paths for this advisor that it might, might, might be a good idea.

We gotta find him something.

So having a 75% failure rate. What about a pilot?

Yeah, I'm on that flight.

Very fine pilot, right? You only make it to the destination one out of four times.

Well, if you had a takeoff and a landing.

What about a cop?

You could be a cop, right?

Yeah, that's a terrible.

You make the news real fast.

Right.

I thought of an electrician.

And then baggage handler at the airport. Forget pilot.

Three out of four bags are lost, don't make it to their destination.

Let's just get this thing in the air.

Construction. I don't need dmv.

I don't think that you can put him at the dmv. No, it went out of four.

No.

Well, yeah, it's going to be hard to have a career when you 75% of the time not making it happen.

Yeah, that's pretty rough. I have a question before we get to the question from the audience.

And that my friends, is the smooth Christian segue.

What? What does a pig say when it's been sitting out in the hot sun all day?

What does the pig say when it's.

Been sitting out in the hot sun all day?

What?

I'm bacon.

Pretty good. Okay, let's go to the question.

Hi Chris, my name is candice, I'm a 33 year old female. I was a service manager and I've been listening to you for the last couple years and really implemented a lot of this stuff. I have now taken on the parts manager role and I'm just wondering if you have any tips or tricks on how to grow part sales and wholesale and gross, or if you have any podcasts in particular that I should listen to. Thank you very much.

Thanks for the question, Candice.

What a fun challenge. I know a lot of people that have gone from service to parts and it ends up being pretty good. So the first thing I would say is you really want to understand your financials and your break even point on selling apart because that can vary from market to market, brand to brand. But when we bring up the conversation of selling wholesale, I've seen a lot of managers go head first into trying to grow wholesale.

And the way their expense structure is and what it costs them to do that, it ends up you're moving a lot of parts and making no money so you have more liability, more responsibility, more employees, more overhead, all that and you're not making any more money in the end.

That is also dependent on the manufacturer because a lot of manufacturers have, you know, kickbacks or, or bonuses. Rebates, rebates. So sometimes wholesale can save you in those situations. So even if you're breaking even on wholesale, the rebates will make up for it. So you, you know, we have to understand what the brand is, we have to understand the market. What are our, what is our expense structure as a department. You know, all of that would go into me deciding whether or not I'm going to go after wholesale because there is the difference between wholesale and retail is there is kind of a market for what wholesale pricing is. And it's going to be really hard for you to do any sort of volume if you're not very competitive in your pricing. You're not, you know, you might get away with a couple percentage points saying you're going to deliver every day or offering better service, but for the most part you're going to have a hard time competing if you're not competitive on price. So our expense structure is going to determine how much volume we need to do to actually be profitable when it comes to wholesale.

Yeah, that's really good advice. The other thing I was thinking of in terms of growing the business on the part side is I would focus on, if I was training my counter people, I would focus on people that are just walking in, buying parts over the counter. I would say what are we doing to try to convert them into service customers? I think that's probably one area where parts managers don't look at that. You might coming from the service side. And then also if there was something to focus on, it would be looking at how often a part's requested and how often you're giving it out right on the first shot. So fill rate is probably something that I would be focusing on if I was just going into a parts room. But there's a ton of other stuff.

Yeah. And then.

The other thing, not understanding the brand that you're working with, which would make a difference in this. There is a lot of opportunity in accessories, wheels, personalization of vehicles. So I would go out to the service drive for a little while and just watch how many cars coming in have wheels, how many have some sort of modification and getting into performance modifications, getting into wheels, getting into vinyl wraps.

3M.

Guard protection, like all of those things can be very, very profitable. And you know, the best parts managers I've ever dealt with are in the. In the Friday sales meeting in front of handing out spiff money, Talking about selling 3M and vinyl wraps and wheels, all that their window tint, pre installing that stuff on cars on the showroom floor and making it very, very easy for the sales managers in that sense. What I like to do when I set that up is I'm paying the managers, so the sales managers and the sales people a spiff. But it's a flat amount. I'm not giving them the gross.

There's a couple of ways to do that, but let's. Let's say I'm going to put some. Some, you know, really cool wheels on. On a. Let's just say a suburban or something, right. And so I'm selling wheels and tires on that. And let's say that those cost me just because I'm doing a round number. This isn't what it would actually be. 1000 bucks. And I'm going to sell it for 2500. I'm going to spit the manager, the sales manager 50. I'm going to spiff the salesperson 100, and I'm going to keep the rest of that gross. And labor, well, the labor is going to go to the service department, But.

A lot of places what they do is you would sell it to the sales department wholesale, and then they're going to keep the gross. But a lot of times, the way their commission works and the way they will discount things, they give the gross away and they never actually end up making anything. And in their mind, they. It's like, oh, well, that's just a pain in the butt because the customer didn't want the wheels and we had to throw them in. When there's actually a monetary value and sometimes that 100 bucks is a. Is a pretty good clip compared to their commission on some of the. The vehicles that salesmen are selling. That ends up being a better. A better thing. The other thing that I would do as a parts managers, I'd be going to SEMA and those sort of things and just looking at what the trends are in wheels and tires and modifications. And you go to sema, once you'll. You'll be different. You know, you'll be like, I can't believe people have a LED screen on their gas tank flap. Like, some of this stuff is just ridiculous. But.

There'S billions of dollars spent in that marketplace that you're not getting. And people are leaving and going and doing it. They're doing lift kits, they're doing all kinds of stuff. And so there's no reason for you not to be in that market. And, you know, pull your service manager in and get in that. But I don't know how many, like, how many dealerships we have that are like a Jeep dealership or Subaru or whatever, they are killing it on accessories. And truck dealers that are doing lift kits and stuff like that, vinyl, I mean, it's. It's really only limited to. To your imagination and you paying attention to the marketplace. But like, you know, even dealerships that are doing a lot of fleet work, all those cars, when they sell them to the fleet, are getting vinyl wraps. They're getting all this stuff. There's no reason for them to have to take it somewhere else. You could be doing all of that. So that's probably the most overlooked opportunity. And those, those purchases usually aren't about price. It's about getting it done and the convenience of wrapping it into the loan. So say you buy a truck, you would rather wrap that lift kit into the loan than pay for it on the side separate from your down payment. Right, Right.

But people are. People are picking up their car, and Tuesday they've got their appointment.

Better chance to sell more if you're doing it up front.

Man, if I had to pick between accessory and wholesale, I'm accessory all day long.

I'll tell you this. I had. So eventually I had two advisors just upping new customers, and we were doing over $200,000 a month in parts and labor sales, Just upping them before they hit F. And I was just saying, hey, Christian, I'm Chris. I'm here to help you personalize your BMW. And then we, you know, we had wheels, we had all that.

We would you put Poppy Chulo on the hood.

We actually weren't into the vinyl, but.

Okay. And I wasn't into the guy who did the pinstriping. I always thought pinstriping looked terrible. So I'm sure we could have called somebody in.

Not as bad as the gold.

Figure it out.

Not as bad as the gold package. After a couple of years, remember what.

Those started to look like? And I remember when I was an advisor at Cadillac, they did gold on a, on one of those big add on bumpers that kind of the, the, like the ones that you would put a winch on, you know.

Oh, okay. Yeah.

They gold plated the whole thing for this guy. And I don't know, after like four months, the gold kind of started fading off.

It looks really cool when it's first done though.

Yeah.

Especially on the old Caddy.

It's funny the, the Vogue tires. So fun.

Yeah. With the white walls.

Yeah. It was great. So that. Thanks so much for the, for the question. Candice and I hope we inspired some ideas. Go to sema, check it out.

And that's it for the big show today. We will see you next time on service Drive Revolution. Thanks for watching this week's Drive by. I hope we gave you something to think about over the weekend. We're uploading new stuff every day, so make sure you subscribe and click the bell icon so you don't miss out. If you have a question you'd like us to answer on the show, call 8333 Ask SDR and we'll answer your question on the show. That's 8333 Ask SDR. For special deals on our books and training, head over to offers.chriscollinsinc.com now that's offers.chriscollinsInc.com I'm Chris Collins and I'll see you in the next video sa.