Learn about a tool that is designed to help you achieve higher margins when you sell parts, while also increasing your profit and decreasing your operational costs through increased efficiency.
Episode 39: When you are running a heavy-duty parts store or a heavy-duty repair facility there are some very difficult challenges that you must overcome to be successful.
There has been a growing problem attracting and keeping qualified people. Listen to episode 11 about solving the skilled labor shortage and episode 12 which introduces you to a training platform that will help you solve the aging workforce problem.
Historically you’ve been on your own with the more advanced challenges of running a successful part or repair business. Not anymore, I’d like to introduce you to Truck Parts Premium powered by Diesel Laptops.
Since the release of this episode, Diesel Laptops has consolidated Truck Parts Premium into their new and improved website, where you can get all the tools you need in one convenient place. Go to https://parts.diesellaptops.com/
Watch the Video
Question 1: What is Truck Parts Premium?
It’s a tool that is designed to help you achieve higher margins when you sell parts, increase your profit and decrease your operational costs through increased efficiency… all without adding any work for you.
What does all that mean?
It means that you can do mass cross-references, inventory analysis, manufacturer comparisons, and mass VMRS.
Let’s go through each one of these features.
Question 2: What is Mass Cross-Reference?
Normally, most cross-references only allow you to cross one-part at a time. Some manufacturer’s websites will allow you to cross a few part numbers at a time. Baldwin Filters allows you to manually enter up to five-parts at a time.
That is time-consuming.
With Truck Parts Premium, you can cross thousands of parts by simply uploading an Excel spreadsheet, matching any parts that don’t immediately cross in the system by looking at their descriptions and in a few minutes, you will receive a report emailed to you with all the work done for you. Not only will you get all of the direct crosses but also you will get indirect crosses where two or more aftermarket numbers cross back to a single OEM part number.
Question 3: What is Inventory Analysis?
Truck Parts Premium recently concluded an Inventory Analysis for a small client in the south – a franchised International Truck dealership with about $1.8m in annual sales.
Quite often we find that heavy truck parts retailers carry the same physical part by several different manufacturers. Sometimes this is on purpose since you have specific clients that prefer one brand over another.
However, we often find that retailers aren’t aware they have overlapping parts. In this case, we found 72 “groups” of parts are identical but stocked under two or more manufacturers.
Using this data, if the company was to remove the more expensive items from shelves, it would free up $13,832.21 in frozen capital.
The other opportunity is selling parts for the correct price and increasing gross margin.
In traditional retail, retailers will calculate the margin on each individual item. The more advanced retailers will even go further and fine-tune their margin opportunity based on time of year, day of the week, weather conditions, Holidays, where the item is located on the shelf, the weight of the item, and much more. The very basic retailers will often mark up all items they sell at a certain percentage, regardless of the manufacturer or item.
We often find that heavy-duty parts retailers fall between those two. The most common method is that retailers in this industry will set gross margin calculations based on the “Source”, or where they purchase the items from. Sometimes this is with a larger distributor, other times it is when they are purchasing directly from a singular manufacturer.
An example is that a parts retailer purchases from Manufacturer ABC. The parts retailer will mark up all items from Manufacturer ABC the same, regardless of the conditions.
This is where the lost margin opportunity exists.
Regardless of the margin mark-up method your company utilizes, you must always be aware of opportunities to make more margin whenever possible. In your case, we know customers will pay more for certain parts, based on the brand name. However, the brand name is often irrelevant when both brands are of equal value.
For example, perhaps your company is stocking the same wheel seal under Meritor part number R803049 and Stemco part number MK42100S. Both are high-quality brands, both have the same warranty, and both are considered the “OEM” level.
Your company is currently paying $5.50 less for the Stemco. Your customers have been paying more for the Meritor brand, so why not charge more money for the Stemco to create more margin for yourself?
If you apply this logic to your overlapping parts, our calculations show you can generate an additional $12,954 in gross margin, which is a 2% improvement.
Your company can generate an additional $12,954 to your bottom line without selling more parts. You just need to sell those parts for the correct price.
Question 4: What is Manufacturer Comparison and how do you use it?
To my knowledge Manufacturer Comparison has never been available on any platform before.
It allows you to take two truck manufacturers, let’s say PACCAR (Kenworth & Peterbilt) and Mack – Volvo and compare all the parts that are identical for those trucks. This tool also allows you to identify all the parts that are specific to each manufacturer.
How much commonality is there between Kenworth’s and Peterbilt’s and Mack’s and Volvo’s? A lot more than you would expect.
Why is this valuable information?
Most heavy-duty parts stores and independent repair facilities sell to regional fleets that have a combination of different equipment manufactured by many truck manufacturers. That means that you need to have a wide breadth of products on the shelf to service all the equipment.
With Truck Parts Premium Manufacturer Comparison tool you can make intelligent decisions about which products you stock. You can eliminate the duplicate inventory that you didn’t even know was duplicate and that will save you thousands of dollars.
This is not only a tool to use internally, but if you sell to heavy-duty repair shops and fleets that do their own repairs you can use this tool to help tailor their inventory and save them lots of money as well. In a business where differentiation is virtually impossible with parts, this is a service that you can provide your customers and set yourself head-and-shoulders above your competition.
Finally, the last place you can use this tool is when you are evaluating different product lines. Which one should you stock? Well, don’t guess, use the Manufacturer Comparison tool to see which product line gives you the best coverage with the equipment your customers are maintaining.
Question 5: What are VMRS codes and why should you care?
VMRS stands for Vehicle Maintenance Reporting Standards. These codes have been around since the 1970s but have not been overly important to most heavy-duty parts stores and repair facilities.
Admittedly, these codes have been used by the big national fleets more than the regional vocational fleets.
But it is important to note that you can lose the opportunity to do business with these larger fleets if your inventory is not coded with VMRS codes. So we have included this feature on Truck Parts Premium.
Like the Mass Cross-Reference feature, it is quick and easy to code your inventory with VMRS. Export your entire inventory into an Excel spreadsheet. Upload it to our system, match the manufacturers and any part numbers that don’t automatically match with a quick search and submit the file. You will receive an email with a report that has coded all your inventory for you. Now all you must do is import this file back into your system and voila it’s all done for you saving you enormous amounts of time.
Question 6: How much is Truck Parts Premium and how do you sign up to this platform?
Truck Parts Premium is an annual subscription that costs $299.99 USD a month for the first user. Every user after that costs an additional $149.99 USD a month up to 19 users.
If you have between 20 – 49 users, you qualify for the Enterprise Pricing which costs $3000 USD a month.
If you will have more than 50 users, you qualify for the Enterprise Unlimited designation and this costs $5000 USD a month.
To put this in perspective, this pricing is comparable to Fleet Cross which is only a heavy-duty parts cross-reference tool. Remember that everyone is eligible to use TruckPartsCross.com and TruckPartsLookUp.com for FREE.
I’m suggesting that if you are currently paying for Fleet Cross you may want to consider switching and getting access to a lot more resources for a similar cost.
How do you sign up? Go to TruckPartsPremium.com/schedule/ and schedule a demonstration of the platform today.
This Episode is Sponsored by TruckPartsInventory.com
Lowering cost-per-mile is all about finding the right part quickly. At TruckPartsInventory.com you will save time by searching for inventory from around North America in one place. You will save money by having the option of buying new, used, or aftermarket parts. You will save yourself work by sending a parts request and having companies contact you. TruckPartsInventory.com is easy to use and it’s free. Go to TruckPartsInventory.com today.
Disclaimer: This podcast and description may contain affiliate links, which means that if you click on one of the product links, The Heavy-Duty Parts Report may receive a small commission.
Subscribe to Our Weekly Email
Each week we send out one email with links to all the content we produce, and you will get access to exclusive giveaways and other resources.