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Best Practices Network with positive results. "They have opened up a lot of doors for us," reported Washic. In September, the group invited representatives from Cleveland Brothers to share an exhibit at MINExpo. In addition to business development, the group helps Pennsylvania businesses understand the legal issues, pricing and channels of international trade. Thompson continues to be impressed that so much global business for used equipment and used parts is conducted over the Internet and phone. "There are only a handful of strong players internationally," said Washic. "Good, honest, trustworthy people will buy a tractor without making a trip over here, based on your credibility." In-Territory Success To boost used parts and used equipment sales within their territory, the used parts and used equipment group communicates regularly with the field sales force, parts counter personnel and product support sales reps so they are all kept current on what's available. There is a lot of collaboration. "Cleveland Brothers' service department is our No. 1 customer," said Washic. Utilizing used parts is an integral component of Cleveland Brothers' repair and maintenance services. With a 40-50 percent savings off of new parts, utilizing used parts can be an excellent choice for cost-conscious customers. When competing against aftermarket parts providers, Cleveland sells the quality and standards of CAT parts. Locally, Cleveland follows CAT reusability guidelines to determine if used parts will be put in inventory. "The rule of thumb we use," said Washic, "is if we wouldn't use that part in our own rebuilds, it doesn't go into inventory." Leveraging Their Network Cleveland Brothers belongs to the Caterpillar Dealers Used Parts Association (CDUPA), an industry association that certifies the quality of used Caterpillar parts. According to Washic, who is president of CDUPA, the Caterpillar dealer network provides a unique advantage in the used parts business. "The idea is to share best practices so that all CAT dealers can increase their parts business," explained Washic. It also provides dealers with access to additional inventory. "If I get a call from Alabama I will call the Cat used parts dealer in Alabama and a lot of times we will route the sale through the dealer versus selling it direct to the end-user," said Washic. At the same time, when Cleveland Brothers needs to source the part, they can turn to the CAT dealer network. " "It makes it really good for our customers because we can use each other's inventory on used product," added Thompson. Cleveland Brothers uses Netcom and Fasttrack/ Machinery Trader databases to locate parts and machinery. The company's parts inventory includes approximately 4,500 line items, a number that Washic says is about average for a large used parts dealer. What's unusual is the number of turns Cleveland Brothers gets on its inventory. Where an average dealer might get one turn on used parts inventory, Cleveland Brothers is on track to get four-and-ahalf turns in 2012. "The used business is unique in how you manage and price your inventory," said Thompson. "You have to have a vision for what to buy; the knowledge of the investment you need to put into that product to refurbish it; and then you have to price and market it." Demand and availability are among the biggest factors in setting price. Washic believes the collaboration between the two departments as well as the CAT dealer network helps them leverage their knowledge to make intelligent decisions. Every trade-in machine is thoroughly evaluated and inspected by three experts to determine the extent of repairs needed and to determine if it will sell used or become a parts salvage machine. Inventory needs to reflect global demand as well as the demand for parts and machines within their territory. "Gathering information is an ongoing process," said Thompson. Listening to Customers Listening to customer requests has also paid off. Whereas most CAT dealers are strictly selling used earthmoving equipment, Cleveland Brothers also sells rebuilt on-highway truck engines to the company's truck engine division. In the last year the company increased used parts sales through its truck division by 75 percent. "If we see a need that is not being filled for our customers, we are trying to address that need so we capture the sales, and somebody else doesn't." Washic believes that most dealers are playing a catch-up game in the markets for used parts because it hasn't been their focus. He contends that not stressing the quality and value of branded parts has allowed aftermarket suppliers to gain marketshare. Washic credits Cleveland Brothers' management for recognizing the potential of the used market and providing their team with the tools to succeed. "It does pay to be aggressive in the used market, and marketing is a big part of it." Clockwise, from top left: Matt Washic, Bob Thompson, Dean Tressler, Sherry Masisak, Bill Baughman December 2012 | Construction Equipment Distribution | www.cedmag.com | 61