Achieving 100% fixed absorption is a must for the long-term success of your dealership—especially in the midst of plummeting vehicle profitability and growing uncertainty around the future of service. However, this goal continues to be a significant challenge for many dealerships, as the average absorption rate for U.S. dealerships sits around 60%. The solution is hiding in plain sight: your parts department. 

Parts departments in particular can create serious financial strain when managed inefficiently, leading to lost opportunities, increased costs, and decreased profitability. While sales departments have typically been viewed as the star of the dealership, the strongest armor protecting your dealership’s success is in the fixed ops department. But only if you have the tools and processes in place to reach your full revenue potential.

Let’s explore the hidden costs associated with dealership parts inefficiencies. Plus, we’ll share how modernizing your processes can boost your dealership’s profitability and customer satisfaction.

Finding Inefficiencies in the Parts Department

Operational inefficiencies have a snowball effect on dealership profitability. Here are some of the most common inefficiencies that dealerships face:

The Vital Role of the Parts Department in Fixed Operations

A well-managed parts department is key to the success of fixed operations. As Tully Williams famously said: 

This quote highlights the symbiotic relationship between the parts and service departments. When parts are efficiently handled, service operations run smoothly, leading to increased revenue through additional labor hours.

Here’s how an efficient parts department can enhance service operations:

• Reduced service delays: Quick access to the right parts ensures that service jobs can be completed on time.
• Increased technician productivity: When technicians have the necessary parts available, they can focus on completing jobs rather than waiting on parts.

Boosted dealership profitability: By optimizing parts management, dealerships can sell more labor hours, contributing to higher fixed absorption rates.

Embracing Modern Automotive eCommerce Solutions

If you’re like 95% of U.S. dealerships, you know there’s no room for error, which highlights the need to maximize the revenue impact of every department in your store. One area with a typically underutilized power source is your parts department. To tap into your parts department’s revenue potential, adding an eCommerce channel is a must. Here’s why:

Reach a Larger Market

An eCommerce platform allows your dealership to reach customers far beyond your local market. Can any of your other departments do that on a daily basis? By selling parts online, you can tap into a national (and even global) customer base, increasing sales opportunities and supersizing your dealership’s footprint.

Streamline Inventory Management

With an eCommerce platform specifically designed for dealerships, you can access the best, most accurate and up-to-date brand catalogs available. This translates to real-time inventory management which means you can sell any part at any time. When you sell parts this way, you get paid before you actually have to purchase the part. That means no financial risk and no threat of the part becoming obsolete. It also improves accuracy in tracking sales trends by providing data insights.

Enhance your Customer Experience

There’s a huge DIY market out there that values genuine parts. And those customers expect fast, easy, and transparent online shopping experiences. eCommerce enables customers to browse available parts, check prices, and place orders from anywhere, at any time. It also simplifies order tracking and communication, improving customer satisfaction.

As online sales of automotive parts and accessories are expected to grow by nearly 50% between 2024 and 2030, embracing eCommerce has never been more of a must-do.

Success Stories That Speak Volumes

Leveraging Data and Digital Tools for Better Decision-Making

To improve efficiency and profitability, dealerships should look to digital tools and data-driven decision making. Real-time data allows parts managers to track key performance metrics, make informed decisions, and continuously optimize operations. Here are some key metrics your parts department should be tracking:

• Inventory Turnover Rate: How often your inventory is sold and replaced over a certain period. A higher turnover rate suggests efficient inventory management.
• Obsolescence Percentage: The percentage of your inventory that consists of obsolete parts. A high obsolescence rate indicates poor inventory management practices and wasted resources.
• Fill Rate: How often the parts department can fill customer or service department orders without delays. A low fill rate indicates dealership parts inefficiencies in inventory management.
• Gross Profit Margin: The percentage of revenue that exceeds the cost of goods sold. A healthy gross profit margin indicates that the dealership is maintaining profitable pricing strategies and managing costs effectively. Monitoring this helps ensure that while parts are competitively priced, the dealership is still making a sufficient profit.
• Average Order Value (AOV): The average dollar amount spent each time a customer places an order. Increasing AOV can be a sign of effective upselling and cross-selling strategies, such as offering complementary products or bundling parts. 
• Backorder Rate: How often the dealership’s parts are on backorder. A high backorder rate can lead to customer dissatisfaction and lost sales. By closely monitoring this metric, parts departments can work toward optimizing stock levels and ensuring timely fulfillment.
• Customer Satisfaction Score (CSAT): This metric gauges customer satisfaction with their purchasing experience. Whether it’s based on timely delivery, the accuracy of orders, or the quality of customer service, tracking CSAT is crucial for building customer loyalty and ensuring repeat business in the competitive auto parts market.

Digital Tools for Parts Department Optimization

Inventory Management Systems:
These systems provide real-time insights into inventory levels, helping reduce the likelihood of overstocking or running out of parts.

Automated Pricing Tools:
Automating pricing adjustments based on demand and availability ensures that parts are competitively priced while maintaining profitability.

Customer Relationship Management (CRM) Platforms:
CRMs can track customer interactions and help streamline the order process.

Streamline Your Parts Operations & Boost Dealership Profitability

Dealership parts inefficiencies carry hidden costs that can quietly erode your dealership’s profitability. From lost sales and outdated inventory to customer dissatisfaction, the risks of an inefficient parts operation are significant. However, by adopting modern automotive eCommerce solutions, dealerships can transform their parts department into a powerful driver of revenue and customer loyalty.

If you fail to modernize, your dealership will continue to face unnecessary financial strain. Meanwhile, those that embrace eCommerce and optimized processes will thrive. RevolutionParts is here to help you make that transformation. Streamline your parts operations, boost dealership profitability, and ensure your long-term success by exploring the modern automotive eCommerce solutions we have to offer.

Maximize Absorption Rate and Future-Proof Your Dealership

Unlock your fixed ops revenue potential—download the Ultimate General Manager’s Roadmap to Maximize Absorption Rate for proven tips.

As costs continue to rise and many consumers are expressing increased sensitivity to pricing, many leaders within automotive dealerships find themselves searching every corner of their business for ways to drive revenue growth and maintain profit margins. Without a doubt, one of the biggest areas for opportunity is typically found within the parts and service department, more commonly referred to as “Fixed Ops.” 

In this article, we’ll take an in-depth look at how selling parts online can empower your fixed operations department to not only increase revenue but also reduce costs for your store.

Conclusion

For General Managers aiming to enhance profitability, optimize operational efficiency, and secure long-term success for their dealership, online parts sales have transitioned from an option to a strategic need. The advantages reach well beyond the mere establishment of an additional sales channel; they influence every facet of your Fixed Ops department and can profoundly affect your dealership’s overall success.

As the automotive retail sector evolves, entities who adopt digital transformation across all domains, including parts sales, will be well positioned for success. The moment to take action is now. Ensure your dealership remains competitive in the digital landscape.

Maximize Absorption Rate and Future-Proof Your Dealership

Unlock your fixed ops revenue potential—download the Ultimate General Manager’s Roadmap to Maximize Absorption Rate for proven tips.

This article was originally published in Fixed Ops Magazine, October 2024.

Today, dealerships face a pressing dilemma: How to prepare for sustainable growth as they enter a new, digital-forward automotive industry. The answer may be in transitioning from a traditional variable ops focus to a more fixed ops-oriented approach, where parts and service are empowered to drive more revenue and cover 100% of operating costs.

As consumers increasingly favor online shopping and vehicles become more sophisticated, dealers must recognize the need to replace antiquated business strategies to protect their revenue streams. The day when customers expect to buy a vehicle in a few clicks, rather than shop in person and endure the uncomfortable experience of haggling with a salesperson, has arrived. With it comes a call to arm the other side of your dealership with modern tools and a plan for profitable growth, along with a strategy to address rising operational costs. 

It’s more important than ever to maximize your dealership’s absorption rate—it’s also more attainable. There’s massive revenue potential in fixed ops that’s largely untapped. Mining this opportunity through modernization is the only way to safeguard the future of your business in an industry on the cusp of transformation. Yet, this goal remains a major challenge for many dealerships, with the average U.S. dealership absorption rate hovering at just 57%.

Challenges and Opportunities in the 2024 Automotive Market

The 2024 automotive industry is up against economic uncertainties, shrinking profit margins on new vehicles, the rapid rise of automotive technology, and a strong consumer preference for convenient shopping options. These factors are driving dealerships to rethink their traditional business models and seek new avenues for growth.

• Economic pressures: The industry is grappling with significant economic hurdles. Rising operational costs, shrinking profit margins, and intensified competition have a tightening grip on dealership profitability. To maintain financial stability, dealerships are under pressure to diversify and find new revenue streams.
• Increased digitalization: eCommerce has changed how consumers shop for everything—including automotive parts and services. Online shopping is not a convenience, but an expectation. In fact, even consumers who plan to buy in-store often browse and compare product prices online beforehand. Dealers whose parts inventory isn’t represented online may as well not exist to these shoppers.
• Rise of electric vehicles: The growing EV market is starting to have a major influence on dealership operations. As traditional part sales evolve to accommodate new technologies, dealerships must adapt to different parts requirements and service models while fighting to maintain profitability. 
• Changes in consumer behavior: Today’s consumers are tech-savvy and demand self-service shopping experiences. This means dealerships that don’t have an optimized digital presence face losing customers to competitors who are taking the needs of automotive shoppers seriously. Consumer expectations are being molded by leaders in customer experience like Amazon. If your dealership doesn’t get on board, it will be left behind.
• Industry challenges and long-term projections: Dealerships that resist modernizing will face serious challenges, like a diminishing customer base, which will accentuate the pressure of rising overhead costs. But with a forward-thinking approach and by bringing in the right tools and strategies, these obstacles can be overcome. Dealers who invest in the historically ignored and undervalued areas of the dealership will see new revenue opportunities. 

Slim margins and rising costs of a changing industry are threatening the traditional dealership’s bottom line. The focus needs to shift towards maximizing the untapped opportunities within your fixed operations, particularly in parts and accessory sales. This transition is crucial for achieving a 100% absorption rate and securing your dealership’s financial stability in years to come.

The Role of Parts eCommerce in Driving Absorption Rates

Parts eCommerce offers a great opportunity for auto dealers. Bringing parts inventory online means dealerships can tap into a national customer base and upgrade the parts department from a dark corner in the dealership to a powerful revenue generator. With online sales of automotive parts and accessories projected to grow by nearly 50% between 2024 and 2030, embracing eCommerce is a strategic necessity.

Benefits of selling OEM parts and accessories online:

• Market reach and expanded customer base: Selling parts online broadens your dealership’s visibility to nationwide parts shoppers. With a webstore and through online marketplaces like eBay and Amazon, dealerships can sell their inventory far beyond the confines of their local area.
• Gross profit and parts volume: Online parts sales may have slimmer margins than your parts counter, but the sheer volume of parts you can sell maximizes your gross profit. Plus, online platforms often include tools to optimize shipping costs, which allows you to claim another margin on shipping, further boosting profitability.
• Access to manufacturer incentives: eCommerce can unlock valuable manufacturer incentives and discounts. By integrating online sales solutions, dealerships can more easily access these benefits, leading to better margins and reduced operational costs.
• Competing with aftermarket retailers: Aftermarket retailers hold a large share of the online market, but OEM parts offer advantages they simply can’t match. As vehicle technologies advance, OEM parts stand out by delivering better performance, durability, and reliability. Now is the time to compete with aftermarket options by entering the parts eCommerce space.
• Attracting the new generation of buyers: Today’s youngest drivers have grown up in a digital world. They’re accustomed to shopping online and expect the convenience of purchasing everything, including car parts and accessories, from the comfort of their homes. An online presence for your parts department will allow you to attract this demographic and solidify your dealership’s footing in an increasingly digital marketplace.
• Modernizing the dealership: Integrating eCommerce throughout the dealership is more than just an advantage. We’re on the precipice of a meteoric shift and dealerships that drag their feet on building business strategies around new technology and consumer trends risk having to close their doors.

Strengthen Your Dealership’s Future with a Modernized Parts Department

As we enter an exciting, albeit uncertain automotive future, achieving a 100% absorption rate, and the financial security that comes with it is more critical than ever. The fastest way for dealerships to reach this goal is to invest in their parts department, a powerful but underutilized revenue generator. Retail is shifting to meet the needs of today’s shoppers and advanced auto technology. Fortune will favor those who arm their fixed operations with modern tools and embrace online parts sales. With parts eCommerce, dealerships can unlock new revenue streams and build a strong foundation for long-term growth, no matter what the future brings. Prioritizing these strategies will help dealerships secure profitability and remain competitive in a reimagined automotive industry.

As it turns out, there are MANY reasons why selling auto parts online is a great idea for dealerships aside from just driving more revenue. From eliminating obsolescence to increasing absorption rate, parts eCommerce can solve some of the everyday problems of the parts department.

Here are 6 ways your eCommerce can benefit the parts department, its staff, and the dealership.

READ MORE: How to Eliminate Obsolescence for your Parts Department

Expand Your Parts Sales with eCommerce Solutions

Adding online selling channels to your parts department can help you increase revenue, improve operations, and lower obsolescence. If you want to learn more about how to modernize your parts department, download our free guide, “Creating a Digital Parts Department.”

The traditional auto parts quoting process at the dealership can lead to a poor buying experience that can drive customers away from your business directly to your competitors.

Often, it can cost you time, resources, and money. Turning parts quotes into final sales is an essential process, and when done correctly can help improve your sales numbers. 

But if the traditional quoting process isn’t working for the average dealership, what can you do to fix it?

How Your Current Quoting Process Impacts Customer Experience

The traditional quoting process is often slow, inefficient, and lacks transparency. This can lead to several issues that result in a poor customer experience.

Four Tools to Implement Into Your New Quoting Process

So you’ve decided to get rid of your outdated parts quoting system. Where do you go from here? You need to implement a more streamlined, automated process to help you maintain quality customer service.

To create a better buying experience for your customers, consider using the following tools.

▶ CRM (Customer Relationship Management) System

A CRM software system helps you manage customer information, track interactions, and streamline the buying process.

It can also enable sales staff to access customer and product data quickly, resulting in faster and more accurate quotes.

CRM tools are an essential component of your customer experience strategy.

▶ eCommerce Platform

The right eCommerce platform can provide your dealership with a website plugin that allows customers to search for parts, view pricing, and place orders right on your dealership’s website.

This can save time for both the customer and the dealership while reducing the likelihood of errors.

They can also check to see if parts are in stock, back ordered, or out of stock.

This will help them get a better idea of how long it will take to get access to those parts. 

▶ Automated Quote Generation

Integrate software that can automatically generate quotes based on predefined rules, like discounts for bulk orders or price adjustments for specific customers.

This can speed up the quoting process and minimize human errors.

The RevolutionParts Quoting Tools is the perfect example of how technology can be used to help automate quotes for customers, whether the request comes over the phone or by email.

Check out the video below to learn more about how the RP Quoting Tool works.

▶ Customer Communication Tools

Utilize tools like email, text messaging, or chatbots to keep customers informed about the status of their quotes.

Transparent communication can help build trust and improve customer satisfaction.

It’s also a great way to help train your parts team on their customer communication skills.

Utilize all of these tools to help you streamline your quoting process and maximize your overall efficiency.

Set Up a New Standard Operating Procedure 

You know what tools and systems you need to implement to ramp up your new quoting process.

You’re ready to get the ball rolling, but you need a plan of actionable steps to take to make sure you don’t overcomplicate the process before you start to use it.

Consider following these five steps to establish a new, more efficient SOP for your auto parts department. 

Step 1: Choose The Right Tools

Evaluate and invest in a CRM system, an eCommerce platform, automated quote generation software, and communication tools that best suit your dealership’s needs.

Ensure they can be integrated with your existing systems to streamline the process.

Step 2: Train Your Staff

Train your parts department staff to use the new systems and tools effectively.

Ensure they understand the importance of accurate data entry, timely communication, and providing prompt quotes to improve customer satisfaction.

Have regular training follow-up sessions to help them get used to new tools and processes and reinforce this knowledge. 

Step 3: Define Your Rules

Establish standardized pricing and discount structures to be applied consistently across all quotes.

Incorporate these rules into your automated quote generation software to ensure accurate and consistent quotes.

Step 4: Create a Communication Plan

Develop a clear communication plan for keeping customers informed throughout the process.

This should include:

• Confirmation message acknowledging receipt of the quote request.
• Regular updates on the quote’s progress.
• Notification when the quote is ready.
• Follow-up messages to ensure customer satisfaction.

Step 5: Implement the New SOP

Roll out the new quoting SOP, ensuring all staff are aware of the changes and understand their roles within the parts department.

Help them train new hires to maintain these processes and keep the customer experience consistent.

Improve the Customer Experience to Double Your Sales Growth

Improving the customer experience is essential to growing your parts sales and securing future business for your dealership.

Streamlining your quoting process is just one piece of the puzzle.

It’s important to look at all customer journey aspects and identify your weak points. This will help you meet customer expectations in the future. 

Looking for more ways to improve the customer experience at the parts department?

Check out one of our most popular guides here to learn three top strategies that can help you do that.

As a dealership, getting as close as you can to 100% absorption through the Fixed Ops department is what you aim for. The higher your absorption rate, the less likely you’ll have to rely solely on new vehicle sales to boost the bottom line. Where should your dealership start when determining how to boost its absorption rate? 

It’s important to focus on streamlining processes between the parts department and service lane to help increase sales, diversify revenue streams, and improve customer service.

Profit & Service Labor Rates

Charging customers the right cost for labor is one of the most important elements allowing a dealership to cover fixed expenses. When it comes to maximizing the profit in your service department, determining labor costs based on the market average is a good place to start.

The National Automotive Dealers Association (NADA) advises that your customer-paid labor should account for 60% of your total labor sales, with warranty and internal contributing 40%. On top of that, the service department should strive for 72% or higher gross retention in every category.

If you can’t hit the market average, look at your local competitors’ average service labor rates to better understand what you can realistically offer. You don’t want to lose out on potential profit just because you’re not confident about the current labor rates. NADA suggests surveying the market every six months or so and bumping the rates up by a few dollars if you haven’t in a while.

Streamline Parts Requests in the Service Lane

Where do most parts sales come from at the dealership? The service lane. The service lane is the number one source of parts orders and requests for the parts department. However, it can also be one of the biggest contributors to over-ordering and obsolescence. 

When the service lane puts in a parts order request, the time spent on sourcing that part can often lead to a few different outcomes. One, the customer becomes frustrated by the wait time and/or price and finds a faster or cheaper alternative. Two, the customer is scheduled for a repair at the service lane but never shows. Three, the service lane puts in an immediate parts order request even if that part is already on the shelves, resulting in multiples of that part. 

In all of these cases, the parts department is left with parts that clutter the shelves, and the service lane makes little to no revenue. Streamlining parts requests and ordering processes can help reduce the number of back-order parts, ensure that parts get used at the service lane, and generate revenue between both departments. 

What approaches can help tackle these issues?

• Have an enforced appointment policy. When appointments are scheduled at the service lane, ensure that those customers fulfill those appointments. Whether through a down payment on the appointment or a non-refundable cancellation fee, this will help you avoid losing money due to appointment issues. 
• Reduce over-ordering by the service lane. Always make sure to check your parts inventory before submitting a parts request. If the service lane puts in an immediate parts order request, make sure not to order before you take stock of what you currently have. 
• Limit special order parts returns. A strong returns policy for special order parts can greatly help combat obsolescence. High obsolescence leads to a low absorption rate; these types of parts returns are the biggest contributors. Set strict policies on returns to help alleviate this problem. 

Expand Your Auto Parts Customer Base 

Even with the best processes in place to keep both the service lane and the parts department running smoothly, the best strategy is to diversify your revenue streams to help increase the absorption rate. One way to do this is to expand your customer base by selling online. 

The online retail market is the largest in the world. With access to a national customer base, dealerships can effectively increase and diversify their revenue streams. What options should dealerships consider when focusing on online car parts sales? 

They also offer a variety of additional services to help businesses sell online easily, like:

• Shipping carrier and fulfillment services
• Discounted seller account fees
• Customer communication service tools

Through online marketplaces, dealerships can expand their parts business beyond their local market and get built-in support to help facilitate the transition onto these platforms. 

A custom-branded web store for the parts department gives you a few distinct advantages: 

• Gives you brand control
• Provides easy navigation for customers
• Makes it easier to find your dealership online

Selling through a custom-branded web store can help you generate a brand identity that fits within your customer’s expectations and help improve customer retention rates. 

Some common selling channels included in an omnichannel strategy include:

• Online marketplaces
• Designated online store
• Mobile apps

Selling through all available selling channels at the parts department can help you expand your customer base, get ahead of the competition, and establish a strong online presence that helps foster customer loyalty. A strong eCommerce strategy can help you increase parts sales and move inventory faster. 

Tackle Your Absorption Rate Today 

Having an effective fixed ops strategy in place can help you improve your absorption rate, create more revenue streams, and streamline processes between departments. With the right strategies in place, you can help both departments effectively grow their business. 

Looking for more ways to help boost the absorption rate at the dealership? Here are five strategies to implement to help you do just that!

Parts departments are filled with EXPERTS on auto parts but many may have little sales experience.

This can make it difficult to grow parts department sales revenue.

Sound familiar?

Your parts team might not be tapping into its full potential.

There are many tricks and tips the experts use that your team can implement to grow parts department sales and squeeze more profit into the dealership each month.

Here are 6 expert tips that will help you sell car parts at your dealership.

1. Prioritize Customer Service and Communication

Nowadays, your customers have access to a lot of information. There’s a good chance they’ve researched the parts they need online before coming to your dealership.

Creating a personalized connection with your customers goes a long way in building customer loyalty.

This, in turn, increases the chances that they’ll come back to shop with you next time!

Establish your dealership as a trustworthy and credible source of information on everything they need to know about cars.

If you’re feeling ambitious and really want to go the extra mile, start up an auto blog they can refer to for installation guides and other automotive topics.

2. Review Your Auto Parts Pricing Strategy

Instead of applying the same pricing across the board, try breaking down your inventory into smaller categories and repricing them accordingly.

There are a lot of ways you could break your inventory down, you can break them down by:

• Popularity of the part
• Price of the part
• Parts vs accessories vs. performance parts
• Transportation and handling costs
• Front­ counter vs. back counter customers

For something small and inexpensive, like nuts, bolts, and screws, apply a larger pricing margin. Instead of selling at MSRP, which might only be around 15-20 cents, you can easily set up a matrix that marks it up to around $1.

For online sales, setting different margin pricing across your inventory is absolutely essential.

Without a pricing matrix, you often end up overcharging for expensive parts and undercharging for cheap parts.

This will either scare away potential shoppers or cause you to sell parts at a loss.

Price parts accordingly and pay attention to where you need to change your pricing structure.

RELATED: 7 Pricing Mistakes that are Hurting your Parts eCommerce Store

3. Improve Your Stocking Practices

The best way to improve your parts sales is to always have the products customers need readily on hand. If you don’t have it, you can’t sell it!

Listen to customers and monitor your sales.

What sells the most? What sells the least?

If you know you can sell a LOT of something, you might even be able to order a larger pallet and qualify for a better bulk order discount.

Differentiate between what you sell from inventory and what you order specifically for a customer.

This kind of classification will improve inventory management and help you make better stocking decisions.

You can also use your inventory to compare what parts customers are buying from other dealers and include them in your future inventory.

Data-based decisions will lessen the risk of overstocking or understocking parts and accessories.

You can also try stocking fun novelty items! Shoppers are always attracted to fun items from their favorite car brands, so use this to your advantage.

Aside from auto parts, try selling things like:

• Hats
• T-shirts
• Water bottles
• Keychains
• Backpacks/Laptop bags
• License plate frames

Since auto parts are not always the most attractive items to put on display, use these items to liven up your counter.

4. Launch an Online Sales Channel for Auto Parts and Accessories

The online automotive parts market is expected to reach $22B in sales by 2023, and you don’t want to miss out on the opportunities!

The internet exposes you to new national and global markets at a fraction of the cost.

Launching your own parts website adds a valuable new channel for the parts department and can generate tens of thousands of dollars each month in sales.

Marketplaces like eBay Motors and Amazon grow larger every year… so why not sell auto parts there, too?

Solutions like RevolutionParts make it easier than ever to plug in and start selling, so don’t worry about being “technical” enough to grow parts department sales using the internet.

5. Eliminate Obsolete Auto Parts

Obsolete parts tie up money and warehouse space that you could otherwise invest in fast-moving parts.

While it’s nearly impossible to get rid of obsolete auto parts by just selling them at the counter, we have a few tricks you can use to keep them at a minimum.

6. Try Parts Marketing 

Ultimately, these strategies only work if people know you have auto parts and accessories for sale!

If you have an internal marketing department, they should be helping you with a marketing strategy specifically dedicated to the parts department.

However, that’s not an option for many dealerships.

There are plenty of easy DIY marketing tricks you can use to help drive more parts department sales.

Use online marketing tools to your advantage.

Email marketing, digital advertising, social media, and many more digital marketing tools can help your parts department grow its revenue. 

Understandably, not all parts departments have the time to do their own marketing, nor do they have the internal support or expertise to market parts.

In this case, they may read out to outside marketing agencies.

Wherever you choose to do your marketing, you want to be sure they specialize in marketing parts if you want to see a high return on investment.

For example, dealers using RevolutionParts Marketing Services see an average return of $8.75 for every dollar spent on advertising.

Conclusion

If you want to grow parts department sales, it requires deliberate effort and innovation from the team.

These tips are a great place to start, but you can always find new ways to improve!

While there are many strategies you can employ, leverage your creativity as a team to come up with the best sales plan.

Take risks, utilize online platforms, and always place the customers’ needs at the center of your decisions.

If you want to learn more about how you can increase parts department revenue by selling OEM parts online, download our free guide to learn the 8 Keys to Success.

Parts departments struggling to manage their older inventory should look to the number one cause of high parts obsolescence, and for most departments, that offender is special order parts (SOPs). 

Special order parts are parts that a dealership does not currently have in stock when they’re requested by a customer. When an SOP has been received, it often doesn’t make it through to the customer. The customer either doesn’t pick it up or finds the same part from a competing parts seller at a lower price or with a quicker shipping time.

This leaves your parts department with a pile of specialized parts that are harder to sell and tie up inaccessible cash.

Selling these parts isn’t the only solution to the problem. Putting the right processes in place to prevent an overflow of special order parts is an essential component of combating parts obsolescence.

Here are the top strategies to both prevent obsolescence and sell obsolete parts effectively.

Preventing SOP Obsolescence

Stopping the problem before it occurs is always preferable. Here are a few things you can do to help prevent obsolescence before it happens.

Set Requirements for SOPs

One of the biggest problems parts departments face with special order parts is the cost of purchasing the part. Ordering a special part that doesn’t get picked up or gets returned, eats into the profit and revenue to be made from that part. That investment is then tied up in a part that is stuck on the shelf.

To prevent this from happening, there are some things you can do.

• Require a deposit for non-warranty services parts.

• Get confirmation from the service manager that the customer has prescheduled an appointment to get the part picked up.

• Bundle special order parts with larger orders to increase the likelihood that the customer will return for their order.

• Bundle special order parts with larger orders to increase the likelihood that the customer will return for their order.

• Set strict return policies on special order parts.

• rain staff to perform follow-ups with customers to confirm orders and order status.

Standardizing these processes can go a long way to preventing a buildup of obsolete SOPs. Remember to identify when relationships with that customer may be strained and analyze how much that will impact your business.

Evaluate the Life Cycle of SOPs

Once you’ve identified the source of high SOP obsolescence, the next step is to determine the life cycle of those parts. In short, how long do those parts sit on the shelves at the parts department? The percentage of obsolete parts that are acceptable to have sitting on the shelves is different for every dealership. 

For the average dealership, the ideal obsolescence rate is below 5%. 

The average obsolete part sits on the shelf for anywhere between 7 and 12 months, depending on your dealership’s specific definition. If your parts department has an accumulation of special order parts that are 12 months old or older, that percentage could easily rise. 

In fact, the average parts department reports that up to 30% of their total parts inventory is made up of obsolete parts. 

What can you do to lower that percentage? Identify how much of your obsolete inventory comes from special order parts. Determine how long those parts have been sitting on the shelves and develop processes to keep special order parts on the shelves for a limited time period (i.e., six months). If you can return a special order part, be sure you note the amount of time you have and return the part to the OEM.  

Creating a Special Order Parts Process

As special orders are placed, you should have a system of tracking who is ordering them, when they are ordered, and when it is time to send them back. If you miss the window to return your unused SOP to the manufacturer, you risk it becoming obsolete. Below is a simple three-step process you can implement to easily track your special order parts process.

Click through the tabs to view each step.

Selling Obsolete SOPs

Preventing future obsolescence from accumulating is an important part of the solution, but what do you do about the obsolete inventory you already have? Here are some effective channels you can use to help sell obsolete SOPs and turn them into a strong revenue stream.

Improve SOP Processes & Reduce Obsolete Inventory

Managing special order parts processes effectively can help you prevent and reduce obsolete inventory. These strategies are just the tip of the iceberg in decreasing obsolescence. Generating sales from obsolete parts is just as important.

Interested in learning about the revenue potential from selling obsolete parts? Download our free guide, “Turn Obsolescence Into Revenue With Parts eCommerce,” to learn how to get rid of your obsolete parts and turn them into profit.

Getting the most out of your quoting process is a real struggle for most parts departments. Quotes that don’t lead to sales are burning a hole through many dealerships’ pockets, but making the final sale isn’t the only challenge. Parts departments also have a hard time keeping track of the number of parts quotes that come in on a daily basis. Plus, parts advisors have better things to do than spend all their time on the phone.  

A few missed quotes here and there may not seem like a big concern, but they can add up over time. In fact, most dealerships could be losing over $1,000 a day from missed quote sales. Additionally, it costs your parts department valuable time spent on other important tasks. 

Fortunately,  with the right tools, like the RevolutionParts Quoting Tool, you can simplify and automate your process to recapture those lost quotes while saving your department time.

RevolutionParts Quoting Tool Makes It Easy

RevolutionParts makes it easy for you to create, offer, and close deals on parts quotes. Our quoting tool makes it easy for you to find the data you need and create the best quotes for your customers.

With the Quoting Tool, you’re able to:

• Access all orders from the RevolutionParts platform
• Easily create quotes and email them to the customer
• Set up custom automated emails for higher quote conversions
• Review abandoned quote reports so you can develop better selling strategies

The RevolutionParts Quoting Tool helps you seamlessly provide your customers with quick and convenient quotes that simplify your workflows by bringing together the ability to assemble, save, dispatch, and process quotes all from a single space.

Plus, the RevolutionParts Quoting Tool makes it easier for your customers to make their purchases online. When you send your customers a personalized quote through email, they can click the link and choose to buy if they like the offered price. Once they purchase, it gets saved in your parts store’s history so you can pull that customer data in the future.

Why You Should Care About Your Quotes

You might think that a few missed quotes here and it is not a big deal, but they can add up over time. In fact, most dealerships could be losing over $1,000 a day from missed quote sales. With each missed opportunity from lost quotes, you lose your customers to your competitors. 

How Can You Turn Your Quotes Into Sales?

The best way to turn quotes into final sales is to streamline your quoting process. This is where a lot of dealerships have the most trouble. Spending hours standing by and answering phones can often result in order errors and lost sales. It can also slow down the parts counter during busy hours. So how can you improve your process to help you make the final sale on quotes while still keeping the rest of your department running smoothly?

Fine-Tune Your Quoting Process

Your parts advisors have a lot on their plates. They’re not always available to give a quote over the phone. So, when a customer calls in for a quote on parts, be it a local buyer or a wholesale customer, they might not be able to get them right away. This means you lose more opportunities to close more parts sales, and your parts advisors have wasted valuable time.

The quoting tool helps you fine-tune the quoting process, making it easier for your parts advisors to

• Create a customer profile or look up an existing customer
• Collect customer data
• Quote a part directly from your catalog
• Add shipping and/or discounts
• Email the quote to the customer
• Automate follow-up emails to remind the customer to purchase

By setting your parts advisors up with streamlined quoting processes from a  single dashboard, converting them into sales gets a lot easier. 

*Plus, all of those quotes are stored in one centralized location for easy access in the future.

Get The Right Customer Data

Gathering customer data is the most important step. The more data you can collect on your customers, the better you can meet their needs. By gathering the right data, you can ensure proper fitment and have their information at the ready, so you can follow up on their quote and suggest future purchases.

If you are giving a customer a quote, it’s important to get the right information, like:

• Name, phone number, and email
• VIN number and vehicle type

Create Effective Automated Follow-up Emails

So you’ve given a customer a quote, but they’re still on the fence. Now what? Often, these customers need a small push. How can you get them to finalize their purchases? By setting up automated emails! With email automation, you can follow up with customers and remind them that you have their quotes saved so that they can make their purchases. It’s quick, it’s easy, and it’s painless. 

You can also use the information gathered during the quoting process to persuade customers to make additional purchases. With the right customer data, you can market additional products or services that are specific to that customer’s needs. You can nurture them into repeat buyers and keep their business. It’s a win-win!

Make Quotes Do The Work For You

With the help of the RevolutionParts Quoting Tool, your parts department can maximize sales from parts quotes. By gathering and using the right customer data, you can create targeted email marketing to get them interested and make it easy for them to purchase after accepting a quote online. 

With the right methods, you can add up to $1,000 a day to your parts department’s revenue. Download our guide, “How to Make an Extra $1K a Day on Parts Quotes” to learn how.

Does this sound familiar?

Your parts department just found the wrong part was ordered for a customer, so it sits on the shelf. Another customer doesn’t show up for their appointment at the service lane, so the part goes back on the shelf. A customer orders a part for pick up but never arrives, so the part goes back to the shelf and they all start collecting dust. It’s easy to end up with an obsolescence issue if you don’t have a focused strategy in place to keep parts from sitting on the shelves for too long.

It’s unlikely that a customer will waltz up to your parts counter and need a  part that’s been sitting on the shelf for a while, but that’s only because you’re selling to a limited market. If you could sell on a national level, you’d have a much higher chance of finding the customer you need.

If your dealership has an obsolescence problem, the good news is that an eCommerce platform is an easy fix. You don’t have to be tech-savvy to run a parts web store or put your inventory on today’s most popular online marketplaces, either. As long as you work with a solid eCommerce solution that offers you full support and training, you’ll feel in control every step of the way. So what are the steps to launching a successful parts eCommerce strategy to address obsolescence?

Assess Your Resources and Goals

Do you just want to eliminate obsolescence, or do you want to aggressively grow your parts department’s revenue? You can decide to start small and get used to handling more orders, or you can scale quickly. Set the pace that’s best for you and is based on your internal resources. This will help you determine which options are best for you when going digital.

The main ways to go digital are:

• Replace your parts request form with a user-friendly parts and accessories catalog to empower customers to find and reserve parts
• Sell parts on your existing dealership website
• Create a separate custom parts website to sell nationally
• Sell on marketplaces like eBay and Amazon(another great option for getting rid of obsolete parts)

Find a Parts eCommerce Solution That Aligns With Your Goals

If you evaluate your resources and still aren’t sure which channel is right for you, then you can go to an eCommerce provider for guidance. They provide the online parts and accessories catalog, shopping cart, order processing, shipping tools, and more. They’ll also handle every step of the website setup and implementation, so you don’t have to worry about the technical details.

Since the quality of the eCommerce solution is critical to your success, it’s worth your time to research your options. Look at sample sites and even view a demo if you can. You can find an auto parts eCommerce checklist below with 50 questions to ask vendors and helpful tips for evaluating eCommerce solution providers.

SEE MORE: How to Choose the Right eCommerce Platform to Sell Auto Parts Online

Configure Administrative Settings

If you pick an eCommerce provider with a reliable support team, you’ll be guided through every step of the process. They’ll guide you through things like shipping methods, tax settings, payment gateways, and other back-end settings that are necessary to run an online parts business.

If your eCommerce solution isn’t able or willing to help you out, then you might want to reconsider who you’ve decided to partner with. This is your first indicator of how the support team will work with you in the months or years to come.

Set Up a Parts Store

You have multiple options when it comes to selling online, and if you want to do it well, it’s best to sell through as many channels as you can.

Start Selling Auto Parts

Once your parts website is live, the orders will start coming in. It’s up to you to fulfill and ship these orders! Make sure you’re prepared with some packing materials on hand.

Remember, this is your chance to clear your shelf space of those obsolete parts! It’ll also help you avoid obsolescence in the future. Drop the prices for the parts you want to get rid of, and with the right marketing strategy, they’ll be off the shelf in no time.

Make Parts Marketing a Priority

Marketing is absolutely essential if you want to dominate the online retail sphere. Even if it’s as simple as a Facebook account or an email list, you need some way to let customers know that your parts website is open for business.

If you want to rank with the top competitors, write original product descriptions to boost organic traffic to your parts website. Additionally, you can set up paid ads through Google. Advertising with Google is another powerful option that’s not too difficult if you know what you’re doing—and it’s great for advertising your low-priced, obsolete auto parts.

Bottom Line

An online revenue channel will rapidly grow your market share and profit. The best part is, that it doesn’t require a ton of technical knowledge to get started. When it comes to online advertising, you can choose to invest as much or as little time as you want. Of course, you can always hire a marketing service to do all that for you, so you can focus on selling auto parts.

Setting up your parts department for sales success is easier than you think. By taking these steps, you can help reduce and eliminate obsolescence in the parts department. If you’re still unsure about the process, read through our “Parts Manager’s Guide to Beating Obsolescence,” to dive deeper into how these tools and steps can help you grow your parts business today!