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Building trade Sales - how it happened in Australia

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Australian dismantlers such as Hytech Parts Plus are not that different on the face of it to UK dismantlers. The big difference has been their positive adoption of technology which has allowed them to work together to supply trade markets far more successfully.
We ‘bang on’ about trade sales a great deal here at atfPro and to explain why the Australian market has developed significantly while the UK market remains in the doldrums, we have enlisted the help of Steve Tapner, an independent trainer and consultant to the dismantling industry down under - Here’s what he had to say.

When I first joined the dismantling industry in the mid 80’s there was very little trade business for the Australian dismantler. The first business I worked in was almost entirely retail, we made only a few trade sales and had no strategy to change that. What I believe changed all that was a shift in the mentality of operators from being traditional wreckers to being dismantlers. We saw the rise of smaller, warehouse based operations based in suburban locations with a move to parts being primarily on the shelf rather than on the cars. It was intended to benefit the retail customer who could come into the dismantler and find the part available already on the shelf rather than have to wait, which was traditionally the case. What the change did in fact was provide convenience and certainty to trade customers and they responded over time buying more used parts.

Of course I recognise that is not how dismantlers are organised in the US and yet they too do big volumes to the trade from their acreage yards, but I believe they achieve the same certainty for the customer in a different way. If you look at the systems they use (and Pinnacle is obviously the one I know well) you see there is a lot of emphasis around the production, dispatch and shipping side of the business. So they do the final quality check in dispatch and put a lot of effort into delivering the part on time - and that seems to work for their trade customers.

Not so long ago I presented a Pinnacle training session called “Delivery Certainty” at one of the APRAA Conferences and I do think it is one of the most important things for the industry to get right. The modern sales person needs to be an expert on price, warranty and delivery because these are things the trade customer needs certainty about if buying a used part is going to benefit him in his business.
  • Price - If the inventory software can provide all the information about the available parts then the salesman can concentrate on price - the trade customer needs to see the value proposition for the used parts as he has to “sell” it to his customer;
  • Warranty - are there warranty options for the part sale that suit the workshops needs – some franchised workshops offer labour guarantees on all their work and need a parts and labour warranty option from the dismantler to support that, and:
  • Delivery - the trade customer needs to know when and at what cost the part can be in his workshop.
Steve Tapner
Steve Tapner is as a past owner of a dismantling business in Australia but more recently (since 2004) he has worked with Actual Systems which then became Hollander International Australia, following its acquisition by Solera Inc. This period saw the introduction of the Pinnacle inventory and management software to the Australian market - from the first sites in late 2004 to 100 plus sites in Australia and New Zealand by late 2014. Since that time Steve has been working as a trainer and independent consultant to the industry.

If you have any questions or would like to ask Steve anything, then contact him by email here.
I am sure the progressive yards in the UK are doing this in some way, but it does take time to benefit. In Australia now only a few of the major yards are acreage sites and most of the parts for sale today are sitting on a warehouse shelf.
ACM Parts Business puts dismantlers on edge
One of the big changes for the Australian dismantler began about two years back when US dismantler LKQ entered into a joint venture with major Australian insurer Suncorp. They have bought or established major facilities in the 3 East Coast States (Queensland, NSW and Victoria) to process a percentage of Suncorp’s written off vehicles and ‘harvest’ parts for use in Suncorp’s repairable claims. They are also introducing Certified after-market parts into repairs where only genuine new or used parts had been used previously.

Needless to say this put everyone on edge, particularly because of the priority access to salvage. The joint venture is called ACM Parts and fits with Suncorp’s consolidations in the smash repair industry to give them a much greater control over the parts supply chain than they had previously.

The ACM Parts businesses all use Pinnacle software and therefore, also Pinnaclenet. this has been useful as existing dismantlers don’t miss out completely as they can, via the Pinnaclenet, be part of that supply chain.

The next thing that I believe will happen is that some form of consolidation will take place amongst the other big players in the dismantling industry which up until now are all independently owned businesses. There are a few loose groupings in the form of marketing groups and “users groups”, so a consolidator will probably come from there.

May 2015

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