THE PROBLEM I FROZEN CAPITAL

Transcription

1 HIGH LEVEL OVERVIEW

2 THE PROBLEM I FROZEN CAPITAL If a used car sat on your lot for 60 days you would implement your used vehicle write down policy. If a used car sat on your lot for 90 days you would immediately dump it to a wholesaler or auction. WHY? FROZEN CAPITAL. Your idle parts inventory is also frozen capital and it sits on your shelf for 366 days, before it s given a second thought. 60 DAYS Implement Used Vehicle Write Down Policy 90 DAYS Send to Wholesaler or Auction 366 DAYS Idle Parts Inventory! AND YOU HAVE A LOT MORE IDLE PARTS than you have 90-day used vehicle inventory!

3 OF THE PARTS INVENTORY OF EVERY DEALER IN NORTH AMERICA IS TIED UP IN IDLE AND OBSOLETE PARTS. Non-Stock and Auto-Phase Out parts that don t fit their stocking criteria. We Address This Problem. *Source: NADA & Others

4 THE COST The average dealership in North America has $294,214 of parts inventory, $88,264 * of which is Idle & Obsolete parts. A large dealership can have $700,000 or more of parts inventory, with $210,000 or more is Idle & Obsolete parts Frozen Capital. Non-Stocking (NS) & Auto Phase-Out (AP); don t qualify under Stocking Criteria because of little or no sales demand. NS & AP Parts have of 35%-85% probability of never selling. Parts older than 12 Months have a 95% chance of never selling. Regardless of how many months an NS or AP part has been on the shelf, it s a problem the moment it should have sold and didn t. The old 12 Month-No-Sale policy for idle parts no longer applies. *Source: NADA & Others

5 FROZEN CAPITAL PARTS MANAGER S MONTHLY PARTS INVENTORY PERFORMANCE REPORT YOUR FROZEN WORKING CAPITAL Parts you can t return to the manufacturer. *Source: NADA & Others NS PARTS I Parts which don t qualify under stocking parameters. 35% - 65% of these parts will never sell in your dealership. AP PARTS I Parts which sales demand has decreased, and no longer fall under stocking criteria. 85% + chance these parts will never sell in your dealership again.

6 THE REASON WHY DO YOU HAVE PARTS IN INVENTORY THAT HAVE A SMALL LIKELIHOOD OF SELLING? Because you re stuck with them. The manufacturer won t take them back, and your Parts Return Eligibility/Allowance is too low to accommodate them. BUT THESE ARE GOOD PARTS, STILL SELLABLE, AND NEEDED BY CUSTOMERS AT OTHER DEALERS. They are just not sellable at your dealership.

7 OPTIONS Your options are limited and expensive outside of the Manufacturer's return process SELL TO OTHER DEALERS No mass collaboration or platform to facilitate bulk transactions EBAY OR CRAIGSLIST Too much time and effort to be useful AUCTION Recover 15% or less SALVAGE Recover 5% or less...until NOW HAUL IT AWAY Lose 100% + cost of disposal

8 THE SOLUTION An online marketplace for OEM Dealers EXCHANGE Exchange parts Reallocate & Redistribute with other dealers. NO parts cost reduction. Dollar-for-Dollar Exchange BUY & SELL Buy/sell parts 50% of dealers cost. Secondary option for dealers to move parts in bulk after the trade platform has been exhausted. CLOUD BASED Cloud-based fast, efficient, minimal effort

9 THE PRODUCT

10 HOW IT WORKS LIST A list of your NS & AP, and Active Parts is uploaded with the criteria you specify, so we can Bulk Exchange Idle for Active parts MATCH NADPE s Matching Engine process all of the requests & creates matches ACCEPT We send the Parts Managers transaction orders to accept or reject ONCE ACCEPTED BY BOTH SIDES INVOICE We invoice each party for our fee only when a transaction occurs CONTACTS We send each party the contact info of their transaction partner PAY & SHIP The parties handle payment between themselves. Ship out parts Freight Prepaid

11 In the past, Parts Managers managed INVENTORY. In today s market, Parts Managers manage MONEY. How Well Is Your Money Being Managed?

12 LET S SOLVE THE PROBLEM TOGETHER Crystal Nicholson cnicholson@nadpe.com Jordan DePoortere jdepoortere@nadpe.com