Increasing PG&A cash flow

For the first four months of this year, parts department sales were down less than 9 percent compared to a year ago for dealerships across the nation. Although that’s nothing to cheer about, it’s a whole lot better than new unit sales, according to data provided by ADP Lightspeed to Powersports Business that included more than 250 metric and V-twin dealerships.
If dealerships are going to cash in on the opportunities in the parts department, they’ll need to be able to generate enough cash from their PG&A sales. How to do just that is the focus of a Powersports Business Conference & Expo seminar to be presented by Kent Meadows, a regional vice president of training for Assurant Solutions.
Meadows will delve into the keys behind improving parts department cash flow: decreasing the percentage of obsolescent or aged inventory. Meadows says the latter can pile up quickly due to a lack of strategic ordering, a reluctance to put aged inventory on sale or not having a process to do that in an orderly and efficient way.
Meadows also will speak about the need for having different turn expectations for different parts department categories. Some of those categories include:

  • Destination parts: those items that are unique to each dealership;
  • Staple items: commodity, high-turn items that are used frequently in the service department;
  • Fashion;
  • And impulse items.
    The latter should be closely scrutinized if they are not moving at a very high turn rate. Meadows noted retail-marketing studies show consumers take less than half a second to decide whether to buy an impulse item that is likely sitting near the cash register or at the front of the store.
    To learn more about increasing cash flow in the PG&A department, make plans to attend the Powersports Business Conference & Expo. Under the theme of “Profit Xcelerator,” the two-day training event will be held Monday and Tuesday, Aug. 31 and Sept. 1, in Indianapolis. It will follow the Indianapolis MotoGP, an event that drew more than 90,000 motorcycle racing fans in 2008 in addition to a large dealer audience.
    Profit Xcelerator will feature seminars from Meadows and other leading training consultants and industry experts. Each day, two tracks of seminars will touch on a number of key dealership profit centers, including parts and accessories, pre-owned units, service department and new unit sales.
    Industry leaders and dealers also will be featured on panels that will explore several timely issues, including e-commerce and marketing.
    The Powersports Business Conference and Expo also will include nearly 14,000 square feet of exhibition space for leading industry suppliers.

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