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Make auto parts to make money, but the book is empty! What is the key point of profit?

April 27, 2022
Make auto parts to make money, but the book is empty! What is the key point of profit? The wise auto boss has realized this...

Over the years, the auto parts industry has such a saying: make auto parts can make money, but the book always does not come out, where did the money go?
There are many auto parts makers who say that the money is earned, but that the money earned is taken into the warehouse of new products.


The longer the operating period of most auto parts is, the more inventory items are. It is like a snowball. The heavy inventory pressure has become a headache for the generation of “old auto parts”; it is necessary to replace these overstocked commodities. The present money will be even harder...

Therefore, controlling inventory is the key to profitability.

Nowadays, as the domestic auto renewal period becomes shorter and shorter, the number of brand models is increasing, and the production quality of spare parts is getting better and better, the inventory turnover rate will become lower and lower for auto parts operators.

Because not only are most auto manufacturers now undergoing transformation, old vehicles (vehicles) are rapidly phased out, new vehicles (machines) are rapidly put on the market; and our industry is also undergoing transformation. Some large and medium-sized auto parts distribution companies with strong vision All are optimizing the capital structure, through the integration of various resources, stripping the burden of old inventory, and achieving rapid expansion to occupy the market;

In a sense, the auto parts business does not invest more and make more money; instead, the more they control bad stocks, the more they lose and the more they lose.

Therefore, the control of their own inventory, to achieve reasonable and accurate stocking, including the positioning of brand models, variety specification positioning, the number of places of origin, has become our current must do good work.

To control the auto parts inventory structure, Auto Parts has the following suggestions:

First, improve the targeting of stocking

Efforts to distinguish between wearing parts, regular spare parts and cold spare parts

It is definitely not feasible to sit behind the door and make plans to close the door. Be sure to go out and do meticulous market research within the scope of sales in this region to truly understand the characteristics and owners of the models of social vehicles.

Including the purchase habits and requirements of car owners, the dynamics of the transport market and even the feedback of new and old customers, so that they have the right goods and prepare goods.

Do not be as long as it is a new breed, not at home, no matter whether it is wearing parts, spare parts, or cold pieces all go back to stocking, and slowly sell.


Second, grasp the number of inventory items

Analyze the sales history of the previous period, find out the rules for customers to purchase goods, and make detailed determinations and arrangements for the incoming goods and purchase time cycle.

Do not covet the supplier's cheap price and overstock, or follow the usual sales experience to blindly bulk purchase.

We also need to know that there is such a rule in the auto parts business that only 20-30% of the goods in the inventory items can bring you 70-80% of the profits. Many of the profits of the goods are offset by the interest borne by the funds.

Therefore, we should spend 70-80% of our energy to complete this 20-30% of the procurement of goods replenishment work in order to maximize profits. Even if there are 50 or 100, there are only a few as many as 50.


Third, in accordance with the rules and characteristics of customer demand, no emotional impulse purchase

As a rational auto parts operator, it will not be fooled by the market and temporary demand illusions and uncertain client needs. Those who are deceived are often driven by profits. Don’t let manufacturers “flicker” because they are coveted for a temporary profit. In addition, it is necessary to prudently purchase goods and promotional items during the purchase season, but also to prevent unscrupulous merchants from saying "clearing goods and jumping prices";

IV. Accurately formulate purchasing replenishment cycle and reasonably arrange inventory structure

Each store has a period of purchase, operators must be based on the characteristics of their own sales cycle and the capital cycle to determine the long procurement cycle, the stock rate may be higher;

A short procurement cycle will result in an increase in the inventory of single species.

It is impossible to make replenishment for each component when it is most suitable. This depends on the degree to which your normal work experience and inventory structure are reasonable.

Therefore, we say that making auto parts to make a difference, the actual profit on the book is easy to do, but it is very difficult to really convert the profits into cash. You want to extract funds in the garage to do investment or diversion is even more difficult. .

See how the wise auto boss is doing:

Now some savvy auto parts bosses have realized this and are exploring countermeasures to build up inventory pull and reduce inventory unsalable goods. Some have expanded customer markets and diluted the inventory structure through complementary advantages and resource integration.

In addition, it seeks to establish joint ventures with peer companies with strong capabilities and standardized management to gradually digest and improve the structure of inventories.



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