Parts Finance Operations

The Neighborhood Parts Store

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Parts_Case Study_0617

If you ask Joel Trail what it takes to retain the business of mechanical and collision repair shops in Nashville, he has a pretty straightforward answer:

“You’ve got to build brand loyalty,” he says. “And the only way to do that is treating people the way you want to be treated.”

It seems almost too simple, but since 1989 when Trail took over as parts manager for Gary Force Acura in Brentwood, Tenn., that saccharine statement has gone on to propel his department’s growth from nothing to $85,000 in gross sales for wholesale parts; from himself and no other employees to seven employees managing dozens of collision repair and mechanical relationships.

Becoming the go-to source for local shops wasn’t easy. In fact, it’s taken him years to establish the parts department’s presence. But once he did—through advertising, branding, inventory control and strategic hiring—Trail was able to ensure he ran the neighborhood parts store in the Nashville area.

 

The Stone Age

Even for 1989, when Trail started as parts manager for Gary Force Acura, it was pretty dire, he says.

“When I first came in in 1989, we did not have a computer system,” Trail says. “Everything, even inventory, was done manually. It just sounds silly today. It was like we were living in the stone age.”

Just like setting up a proper inventory at Gary Force, everything about the parts department needed to be built from scratch—especially the department’s relevance in the greater Nashville area.

“Acura was still getting off the ground, and they basically were not doing any wholesale at the time,” he says. “If anyone wanted to buy body parts or wholesale parts, they had to come to the store and pick it up. Nobody here was really pushing it. They were just focusing on the mechanical end.”

Trail, who had owned his own wholesale parts business for 10 years prior to joining Gary Force, knew the opportunity his dealership was missing. So on day one, with nobody on staff, his job was to set the parts department up for success.

 

Inventory Overhaul

Obviously, a non-computer system would not fly for Trail. But he knew simply purchasing an electronic system wouldn’t fix the department’s inventory problems—he had to form a parts ordering process and get the entire system under control.

“We had a lot of stuff we didn’t need,” he says. “When you don’t have a sale history, and when you’re manually looking up a part number up on a car to see when the last time you sold it was, there’s just no organization to anything and you can’t be a reliable source for shops.”

“So first thing I did was get the inventory built up to where I could pretty well take care of anything sheet metal-wise for current models,” Trail adds. “Then it was getting in contact with area body shops to find out what parts they needed.”

 

Branching Out

Trail’s first step was evaluating the market. There were no other Acura competitors stationed in his area—just a couple dealerships that ran routes through Nashville. So, being in such close proximity, he started cold calling body shops in the area and selling his business.

“I just started advertising us, letting them know we were in the wholesale business,” Trail says. “I let them know we were there and we could provide the service, we could deliver the parts. If we didn’t have it in stock, we’d have it in one to two days afterwards. I just offered the business and promised to take care of them.”

“If they had any special needs, specific cars that had put them in a pinch, I would help them with the price on them parts just to get my foot in the door,” Trail adds. “I would show them we could handle whatever they needed.”

On the mechanical side, Trail was a little more selective.

“The mechanical side is more difficult to sell genuine parts,” Trail says. “The mechanical shops are competing with me, and many of them buy cheaper aftermarket parts and concentrate on maintenance, so it’s harder to sell them on our parts.”

So Trail studied the mechanical shops around, approaching the more progressive shops that appeared more professional and open to purchasing OE parts.

“We ended up partnering with the best shops, the ones that are more to spending the money, buying the equipment to actually diagnose, rather than just your everyday maintenance,” he says.

 

Staffing Up

As he established those relationships with area shops, Trail began to build his staff as well. After the first few partnerships were set up, Trail brought on the service shop’s janitor as a part-time driver, and then eventually a full-time driver.

While obtaining the partnerships with shops was a lot of work, this initial hire was the key to retaining that business. Every day before any deliveries were executed, Trail would preach to his driver the parts department’s commitment to customer service.

“I would say, ‘We are a service-oriented company. We’re here to take care of our customer base,’” Trail says. “I try to express that to build loyalty, you’ve got to let people know you appreciate them, you appropriate their business, and that you’re ready to meet their needs. If it’s running all the way across Nashville for a $5 part, then we were going to do it immediately.”

Over the years, as Trail continually built up his staff, he would preach these customer service values. As business grew, he initially hired a service writer from the service side that showed an interest in parts.

“He knew the product,” Trail says. “It helps to be service oriented when selling parts because you know where the parts go on cars.”

From there, Trail began to crosstrain his service employees on parts, so he could pluck an employee whenever the parts department hit another milestone and required another full-time employee.

“I’ve actually got techs in the shop that can fill in for the parts department whenever someone is out,” he says. “I like everybody to be able to do everything.”

 

The Neighborhood Parts Store

Today, Trail manages a staff of seven, including two full-time drivers (including the one he initially hired almost 30 years ago). That staff handles dozens of body and mechanical partnerships in the Nashville area, making his department the go-to source in the neighborhood for Acura parts.

After the first year of taking over, Trail had brought gross sales to over $10,000 per month. Today, that number stands at $85,000, and his department achieves a 20 percent net profit margin on wholesale parts.

“Right now we’re to the point where we can pretty much turn anything around right away,” Trail says. “If we get an order today, even if we don’t have it in stock, we’ll have the parts ready the next day.”

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