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sell more buy less

graphic car on depollution rig
Are you making the best of your opportunities? Robert Counts believes we could all do a great deal better if we took more time analysing our businesses.
Those who attended CARS last year had the opportunity to hear one of America’s top consultant’s to the auto recycling industry. Here we bring you the key points of Robert Counts’ seminar which explained how to grow your sales without buying more cars.

It’s very easy to get hooked up on the concept that to make more money you need more vehicles and more space to put them on. Robert Counts of Counts Business Consulting says, “think again” and kicked off by looking at what’s happening in the vehicle dismantling industry today:
  • Cost of Inventory is rising.
  • Cost of fuel is rising.
  • Profits are shrinking.
  • Higher metal and core prices are what is keeping many in business.
These are fundamentals that I am sure we all recognise. What makes the need for us to consider our businesses with greater urgency at the moment is the final point Robert makes as the higher metal prices are now slipping. Slowdowns in China and the far east coupled to continuing recessionary forces in west makes the outlook for metals less than brilliant. The only bright note is that with the west printing money like it’s going out of fashion, all commodities should retain value if serious inflation takes hold. That said, higher metals prices are no substitute for selling more parts.

Robert Countsof Counts Business Consulting
Robert Counts is a small business owner and currently works with automotive recyclers and towing businesses in the United States, Canada, and the U.K. He manages owners’ groups that are largely family owned businesses. He does independent consulting on buying, sales, operations, customer relations, financial health and facility layout and design. For further information: email Robert or visit the website.
Robert claimed that 50% of the time, a dismantler doesn’t have the right part which does nothing to make your potential customer want to come back. To combat these negatives, Robert suggests a three pronged approach.
Increase the efficiency of your facility
Robert explained that most facilities he has worked with (and there’s many) are both poorly managed in terms of people and processes, with many operations under utilised. An important point he stressed was that sales must relate to the number of vehicles processed and not your yard size.
Perception of availability
Robert can’t stress enough how important it is to say ‘yes’. You need to create an environment where you do have what the customer wants rather than saying no. This is so important as most of your customers will be repeat customers and you want to keep them coming back.

So how do we achieve this? By selling other people’s parts, developing trading partners and selling after market and remanufactured parts. I can hear many of you groaning and the usual statements - “you can’t rely on another yard’s quality” (don’t forget that’s what the other yard is also saying about you), there’s not enough profit in these sales (and it’s true, you won’t make as much selling someone else’s part as your own), but don’t miss the point here. This is about customer retention and Robert’s data shows that 80% of sales in our industry comes from 30% of the customers so retaining those customers is essential if you want to build sales in the future.

There’s another side to this as well. Others can help you sell your stock which means you have that part off the shelf and ready for another saleable item. The extra volumes will more than justify the reduce profit margin.
Maximise your non-part sales
This area is very easy to overlook but according to Robert, can make up 10% of revenue. This includes any added incomes that relate to the business:
  • Freight/delivery.
  • Extended Warranty.
  • Core Charges.
Freight charges and money received for core are quite obvious but extended warranties is an area where we haven’t even began to capitalise on in this country. Many items are now high value and as technology within vehicle design increases, so will the value of many parts. We all offer warranties but for those high value items there are opportunities to sell extended warranties. This can also serve to add confidence to your products and business.

Understanding your customer is key. To grow, you must grow repeat business as it’s far easier to sell to an existing customer than need to find a new one every time. Don’t forget, sales is not about how many vehicles you buy but understanding what you buy and constantly moving those fast moving parts through your business.

Please bear in mind that this article is a brief resume of what Robert covered in his seminar at the CARS show held last summer. The actual seminar was far more detailed and made attendees take a hard look at their own operations. We hope Robert will be back for the next CARS event which is currently being planned for Summer, 2014.

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