Many industries in the United States are experiencing an absence of available and qualified new employees, and the auto-retail industry is no exception. Stemming from the COVID-19 pandemic, dealerships all over the country are reporting a crisis in finding qualified staff, or, training the new-to-the-industry folks that are available. In the process of these shifts and gaps, many dealers are struggling to maintain a consistent and profitable parts operation. While there is no replacement for good employees, periods of transition highlight the importance of dealerships building core systems that support an ever-changing landscape and maintain consistency in their operation. Today we’ll explore how.
Sales and Retail
While Sales Management positions are core to the success of your sales department, turnover in salespersons has always been high, 67% to be exact. Think about the ways your sales department has naturally been built to accommodate this fact of business. If you’re like most dealerships, your educational tools for new salespersons are standardized, streamlined, and optimized for change. Understanding the nature of this business, it seems unlikely that your finances and over-all reporting would be tied to any single salesperson, but rather, your finance manager and a reporting system that runs in the background. Although transitions are always an adjustment, your Sales department has taken this into account and built a system that can support change.
Parts and Service
Now think about your parts and service department. Do you have the same systems in place? While most dealers might say ‘Yes! We have the DMS and our Parts and Service Managers are on top of it’, the reality in many situations is the DMS doesn’t produce accurate numbers without accurate input, and many parts and service departments don’t have the set training and support to ensure new employees are able to support the existing effort. For many parts departments, managers are struggling to keep the DMS and optimized and updated and department members are left under-supported. New Parts Managers are faced with an even more daunting task: learn the business, manage the entire department, AND manage the DMS successfully.
When your DMS is working efficiently and accurately, everything else in your department falls into place. We’ve seen this over and over again with hundreds of dealerships- especially in periods of understaffing or transition. Creating a core system that runs in the background and keeps your bottom line in sight is crucial for overall parts department health. PartsEdge is the one employee that will never transition out. For only $800/month (far less than the average full-time employee salary), we optimize your DMS and inventory DAILY with custom matrixes, source settings that make sense, and full-time parts experts available to support you on any issues that arise. While we’re not a replacement for a Parts Manager, we empower Parts Managers to focus on the aspects of your Parts Department that really impact your bottom line: customer satisfaction and employee training and support. Not only that, PartsEdge is a great tool for new-to-the-industry managers offering support, training, and ongoing review of your inventory.
According to NADA, dealership service and parts sales totaled more than $120 billion in 2019 and 49.6% of the average dealership’s gross profits come directly from the parts department. With numbers like these, why wouldn’t you invest in a tool to support your parts operation? Our results speak for themselves: dealerships who work with PartsEdge experience, on average, a 20% drop in overall inventory, a 50% higher ROI, a 20% increase in parts sales, and 15% less idle inventory. These numbers translate to more profit, better service, and consistency in your parts department. Plus, our $800/mo service is month to month allowing you to see for yourself just how much your bottom line can improve with our services.