Thursday, 21 April 2011 20:02

Is Your Parts Supplier Purchasing Policy a Benefit or an Expense?

Written by Walter Danalevich

This month let’s take a look at parts ordering considerations that will improve your bottom line. Think for a moment of all your part suppliers both OEM and aftermarket. Do you know what the return parts policy is from each supplier?  You should if you want to maximize your business profits.

What is their return policy on parts that do not fit? Will they reimburse you for full labor or just the part cost and leave you with a “catch you on the next one” policy?

Not too long ago, it was no “big deal” to return parts for credit months later. Some of us may even remember credits issued with certain part suppliers for returns where we did not even produce evidence in the form of an invoice.  Well, times have changed considerably when ordering auto body parts. Today we have the option of ordering parts by the traditional voice phone communication or a variety of electronic options which include fax, text, digital and e-mail.

Before ordering parts, Do you know if there is a
1) Maximum part return date
2) Credit for returns for damaged parts
3) Credit for returns on electrical parts
4) Warranty for reconditioned wheels
5) Warranty for off road usage
6) Warranty for CAPA aftermarket parts (like kind & quality)
7) Warranty for Mechanical Parts
8) Warranty for Chrome parts
9) Warranty for New sheet metal rust through
10) Warranty for Non-CAPA aftermarket parts
11) Optional mechanical service warranty Agreement
12) Transferable warranty to a non-original owner
13) Policy for compensation to shop for wrong parts received
14) Fee for shipping cost on special order parts
15) Restocking fee after 30 Days

Having answers to the above parts ordering warranty concerns will assure you maintain and improve your parts department profit margins.

For example, recently our auto body shop in Santa Barbara, California had a very positive parts warranty experience involving our aftermarket parts supplier.

Our repair shop had customer approval to proceed with repairs to their 2010 Honda Civic. Their insurance company, to my complete surprise, stipulated in the repair estimate the use of an aftermarket fender and front bumper. I questioned the insurance company adjuster to make sure there was no mistake on their proposed estimate for such a new vehicle.  The Insurance adjuster replied the insured’s policy stipulates using aftermarket parts when available in exchange for a lower annual policy premium.  Upon hearing this news I decided not to make a fuss and proceeded with repairs.

All appeared well until the car bumper was installed. After the body tech installed the bumper it was quite obvious there was a “quality of fit” problem. The bumper end did not meet the attachment point of the aftermarket left fender. Additionally, there were noticeable one-inch gaps in front of both headlamps. How Sweet!!!

I immediately addressed the issue with our aftermarket supplier who referred me to the district manager. The district parts manager asked me to take a few digital pictures of the misfit and send them to him to forward onto the manufacturer. Within 24 hours he authorized the aftermarket parts manufacturer to pay 100% of all the body & paint labor, including paint supplies. We then reported the potential catastrophe to the insurance company who authorized us to install an OEM bumper. We proceeded with completing the repairs.

A couple of weeks later we received payment in full for $653.93 from the aftermarket parts supplier. The insurance company even commented on how well we handled potential part warranty replacement crisis.  This could have turned ugly if we choose to involve a less reputable aftermarket part supplier whose warranty did not conform to full reimbursement for parts and labor.

By choosing carefully your suppliers part sales warranty, you will experience increased productivity and retained shop profits.

May you all receive many “PERFECT FITTING PARTS” and added income to your bottom line!

Read 2706 times Last modified on Wednesday, 14 December 2016 00:25