Issue link: https://read.dmtmag.com/i/164037
xxxx 36 • September 9, 2013 • Powersports Business SOLUTIONS www.PowersportsBusiness.com F RETAIL REMEDIES 6 methods to improve your inventory management Well, here we are again … most of you are are not doing them, there are opportunities coming to the end of another primary unit to improve. How about you? Do you take sales season. Oh, I know there are regions full advantage of your suppliers' inventory (notably in the South) where the fall season control offerings? can be the "biggie," particularly for strong ATV and UTV dealers. In addition, the snow- 1. We budget for, and take advantage of, mobile dealers will be ramping up in the major pre-season purchasing programs. next few months trying to drive interest to If you are using an Open-To-Buy program, get those sleds sold before it has you will be ahead of this game. Having the a chance to not snow. It was cash flow available when needed is critialways hard for me to get fired cal so you can take advantage of extended up for sleds when it was 100 terms and special discounts. This is one degrees, but I had to do it. of the ways the best dealers manage to Regardless, we will be dealhold such high margins for PC&A. ing with controlling our parts, clothing and accessories inven2. I stay informed on all PC&A protory. If we are slowing down for grams from all of our suppliers. an extended period, we want This would seem to be obvious. to get that inventory down STEVE JONES However, it is not an easy task for a quickly. If not, we may need to multi-line operation. Nonetheless, failreduce spring/summer inventory while building to do this can result in significant issues ing up needed PC&A for the fall/winter season. down the road. One major OE recently During these changes, I find many dealimproved their P&A programs significantly. ers neglecting the various inventory control They had some great options, but there were programs offered by OEs and aftermarket supcritical dates involved. I visited a number of pliers. These are tools they offer that can help their dealers and found many of them had no you maximize your ability to quickly reduce or idea the OE had even changed the programs. ramp-up the right inventory. That's just sad. This is a requirement for In our Parts Management Workshops, we effective parts management. ask the students to read the following statements and check boxes by each, indicating 3. We minimize the number of vendors we whether or not they do these things. If they use so we can maximize volume-purchasing P36x37-PSB11-Solutions.indd 36 discounts and benefits. This is huge. We all have our favorites and want to use supplier "A" for widgets and supplier "B" for geegaws because we save 50 cents on them. But, if we can get a more profitable deal overall by leveraging the volume buy, it is worth spending a bit more for some things and buying from one supplier. It is worth noting that this can be true when looking at purchasing from OEs. You are already obligated to purchase "X" amount of stuff from them, and if you buy deeper rather than using aftermarket suppliers, it can be to your benefit. You need to spend the time to investigate the options and the overall results to your bottom line. 4. We require our suppliers' reps to provide our staff with feature-and-benefit sales training for their products and assist with displaying and merchandising. One way to weed out the suppliers is to require they do things to help you move their products. Assuming you have the right people, the better training your sales staff gets, the more they should be able to sell. 5. We utilize our suppliers' inventory return programs and OE obsolescence programs to reduce our inventory, control obsolescence and open up budgets. This is where many dealers let their obsolescence get out of control. If it hasn't turned ww Pa once in 12 months (or the season), it needs to go away before it becomes a boat anchor. In my book, if it hasn't turned once in six months (unless it is seasonal), I'm going to start thinking about sending it back. Inventory ties up cash that could be generating profits. 6. We utilize daily parts stocking programs, but never penalize service parts by holding out for minimum quantities. Service represents the most expensive hourly time with the tightest margins in your dealership. You need to do everything possible to get needed parts to them as quickly as possible. In addition, customer satisfaction with your service department has a major influence on your future unit sales. Do the math. If you do these six things, you will find improvements in your margins as well as increased turns and reduced cash flow problems. You will be able to improve your ability to stock the right stuff at the right time. This will result in happier customers and less stress for your staff. PSB Steve Jones is senior projects manager at Gart Sutton & Associates. He has worked in the powersports industry for more than 30 years, for dealerships and manufacturers, and as a consultant and trainer. Contact him at steve@gartsutton.com. 8/28/13 11:09 AM suc hav rec cau are in do rea an the the fro to cu sta wh ao the we com tie eve Yo sw sta see We rai stil