Bulk Buying Used Parts: Benefits for Workshops

The automotive workshop business in Australia has never been that difficult to run. As overheads increase, competition intensifies, and customers seek quality and low prices, workshop owners are always in the hunt to find out how to increase profitability without reducing the level of service delivery. Bulk purchase of used car parts is one of the strategies that are changing the way smart workshops are being run.

We have worked in All Good Parts and have witnessed the process of transforming the work of a workshop through bulk purchasing arrangements. We will discuss the reasons why increased workshops in Australia are switching to bulk purchasing and how this would help your business.

The Economic argument of Bulk Purchasing.

The direct advantage of bulk purchase of used car parts is the high cost savings. Although separately purchased components already provide a saving of 50-70% relative to the new parts, bulk buying increases this saving by volume discounts.

Take the figures: a workshop which uses 5,000 monthly parts would cut this down to 2,500 by moving to quality used parts. Under bulk purchasing deals, that amount may lower to 2,000 dollars or even less. In a year, you will save 36,000, which can be reinvested back into your business or employed to work with more employees or even to raise your profits.

Other than the direct cost-saving, the other important financial benefit of bulk purchasing is predictable cash flow. When you open an account with a trustworthy supplier such as All Good Parts, you are able to agree on conditions of paying that suit your business. As opposed to paying on a part-by-part basis, monthly invoicing and credit facilities can help you in controlling cash flow better.

Operational Efficiency That Transforms Your Workshop

The workshop business is time-sensitive. Each hour of waiting for a vehicle to get parts is a wasted revenue and an angry customer. Buying in bulk is a solution to this issue as you will be able to have the parts that you frequently require at hand.

Think how it is possible to accept new engine placements within a day since you already have tested engines of such popular cars as the Toyota Hilux, Mazda CX-5, or Honda Civic in your warehouse. You aren't telling customers that you have to order the part, come back next week, but that you can have him back on the road today.

Such a quick turnaround does not only enhance customer satisfaction, but also more capacity in your workshop. With the flow of jobs and no parts delays, your mechanics are going to be busy and you are going to be able to deal with more vehicles in a week. A workshop that we provide in Melbourne had reported having 30 percent more work done each month when it applied the concept of strategic bulk purchase of common parts.

The administrative advantages should not be neglected either. The reduction of time spent on ordering, tracking deliveries and handling invoices, since it is only necessary to deal with a single reliable supplier as opposed to having a number of vendors. Your office personnel are able to concentrate on customer care and scheduling as opposed to parts acquisition.

Tactical Inventory control.

Effective bulk buying is not about buying in huge quantities but good smart inventory management. The trick is to examine the patterns of your workshop and target high turnover items.

Begin with a review of parts purchases of the last year. What are the parts that you change most often? In the case of most workshops this is engines and transmissions of major vehicle brands, typical body parts, such as doors and bonnets, lighting, and suspension parts.

These are high frequency products that are ideal in mass purchasing. At All Good Parts, we assist workshops to find the parts that are financially viable to their targeted customer base. The European vehicle workshop specializing may purchase Volkswagen and Mercedes parts in larger quantities, whereas the general repair shop may work on the Toyota, Mazda, and Honda components.

Storage is usually mentioned as an issue, but it is not necessarily a hindrance. Engines and transmissions are high-value products, although large, and are worth the space that they occupy. Racking systems can help to store body panels in a convenient manner. Even small workshops having less space can begin small like having three or four ordinary engines in stock and grow as they get to enjoy the fruits of the same.

Development of Competitive Advantage.

The modern competitive market requires workshops to have all they can get. Bulk purchase generates various competitive advantages that enable you to be different.

Price Competitiveness: Lower parts costs enable you to be able to quote at competitive prices and still have healthy margins. It is not only about competing on price but providing true value. The customers can compare quotes and your pricing gets more competitive without the decrease of your profitability.

Speed Advantage: Inventory will be faster. In a world where people can get what they want instantly, the fact that repairs will be done within a day rather than in three is a strong differentiator. Quick service creates favorable reviews, referrals via word of mouth and repeat business.

Quality Reputation: You become one of the suppliers who test their parts and offer warranties and you are developing trust among the customers. At All Good Parts, all engines are compression tested, all the transmissions are checked and all of this is backed up with some warranty. This quality assurance will enable you to stand behind what you are doing.

The Customer Value Proposition

Your clients are concerned with three aspects; quality, price, and speed. The bulk purchasing will aid you in fulfilling each of the three.

You can offer quality repairs at a lower price to families and businesses with tight budgets and pass a portion of your cost savings to customers. Our warranty assurance grants our customers security, they are not paying easy money on questionable components of undetermined quality; the opposite is that they get tested, warrantied components at a fraction of the cost of new parts.

Quick repairs imply reduced inconvenience to the lives of the customers. A working parent who must get to the school run in his car, a tradie who must get to work in his ute, or a business managing a fleet all will be in great need of a quick turnaround time.

Introduction into Bulk Buying.

When you are willing to venture into bulk purchases, the following are the steps to take:

Analyze Your Data: 6-12 months part purchases Review: spot patterns. Which are the most common parts you make purchases? What do you think are the leading brands of cars in your workshop?

Determine How much you can invest in inventory: This would involve calculating your investment. It is worth remembering that this is a pay-off investment that is saved within a very short time through cost savings and higher revenues.

Select Your Supplier Carefully: The Supplier should be an existing firm with a good reputation, extensive testing, solid warranties and flexible bulk deals. See what they are like, visit their facilities where possible and get confidence that way.

Start Strategic: Start with 3-5 parts with high turnover. Record tests the system, perfect strategy and grow slowly.

At All Good Parts, we collaborate with workshops in Melbourne and Brisbane to design individual bulk buying agreements. Either as a small independent shop or as a larger entity, we can create the solution to suit your needs, budget and storage space.

The Bottom Line

Buying large quantities of used car parts is not only the cost-cutting strategy but also the right business move to make your workshop a better place to do business. Reduced costs, quicker service, and customer satisfaction, combined with increased profitability form a vicious circle and lead to an improvement of the business.

The workshops that survive in the current competitive world are not always the largest and the most glamorous. They are the most intelligent- the ones who make strategic policies on how they procure their parts, stock and how they serve their customers.

Are you willing to investigate how bulk purchases may change your workshop? Get in touch with All Good Parts. Our plants in Melbourne and Brisbane are enabling us to make workshops in Australia work smarter, not harder. We can speak about the way a tailored bulk purchase deal might be effective in your business.