Pay for parts up front?
I lost an awning this summer in a bad storm. My insurance is paying for it less my deductible. The repair shop wants me to pay for the awning up front before they'll order it. Is this a common practic...
Forum Discussion
I once bought a dealership that included a $400,000 parts inventory. In the dealership business, parts inventories are owned outright and represent real cash. An analysis of the inventory revealed a very low turn-over rate and a high percentage of parts with no sales in 12 months. A properly managed $150,000 inventory would have been more effective than the $400,000 they had.
When we looked further, we found the parts manager ordered "special-order" parts with no control on them and had very poor follow up procedures to get the customers back in the door to pick them up. Returning parts is a very expensive process and many of them are non-returnable to begin with. If even 10% of special order parts are never used, you will soon have a major parts inventory problem. We instituted the proper controls, including paying for special orders, and soon corrected the on-going problem.
Many owner's simply don't understand their parts inventory since they came from the sales end of the business. They allow their parts manager to be the "nice guy" and take the easy way out. They will suffer the monetary consequences.
I really do not know why so many responders on here object to paying up-front. They put the cost on a credit card and can challenge the charge if the part never arrives. On the other hand, if they order the part out of convenience and then start shopping for a better price, shame on them and their ethics. Find the better price and then order.
When we looked further, we found the parts manager ordered "special-order" parts with no control on them and had very poor follow up procedures to get the customers back in the door to pick them up. Returning parts is a very expensive process and many of them are non-returnable to begin with. If even 10% of special order parts are never used, you will soon have a major parts inventory problem. We instituted the proper controls, including paying for special orders, and soon corrected the on-going problem.
Many owner's simply don't understand their parts inventory since they came from the sales end of the business. They allow their parts manager to be the "nice guy" and take the easy way out. They will suffer the monetary consequences.
I really do not know why so many responders on here object to paying up-front. They put the cost on a credit card and can challenge the charge if the part never arrives. On the other hand, if they order the part out of convenience and then start shopping for a better price, shame on them and their ethics. Find the better price and then order.
