Digital Parts Procurement Helps Improve Bottom Line

POSTED January 22, 2020

The collision repair industry is changing. While technology is increasing the complexity of new vehicles and their repairs, digital parts procurement provides benefits that help repair facilities directly improve their bottom line.

As MSRP for new vehicles continues to rise due to new technologies and automobile complexity, so does the cost of repair. According to a recent industry trend analysis, average parts prices across all types have “risen nearly 20% over the last fifteen years.”An online marketplace brings competitive pricing, more choices across all part types, and the opportunity to fast track repairs using more OEM parts. The ability to search and compare prices along with part types and delivery times gives the repair shop greater control over their parts supply chain.

The Advantage of the Marketplace

In the competitive auto repair industry, having the right parts procurement process, buying “the right way, all the time,” can provide a significant long-term advantage. Using a digital parts procurement platform with a search and compare function enables the repair shop to find multiple OEM dealership suppliers as well as multiple alternative parts suppliers. The marketplace creates friction where suppliers compete and no one supplier holds the repair customer’s order captive. When dealerships and alternative suppliers compete, repair shops win in multiple ways:

Improved cycle times lead to more throughput. Shops that purchase the right parts with quick delivery times from competitive suppliers will repair more cars by reducing their overall cycle times. Improving cycle times directly helps a shop’s DRP metrics, strengthening relationships with insurance carriers. Carriers will recommend these shops more often, increasing the shop’s profitability.

Digital parts procurement platforms provide benefits that help collision repair facilities directly improve their bottom line.

Conquest pricing programs lead to greater OEM parts usage
To compete with alternative parts, auto manufacturers have developed support programs, sometimes called “conquest pricing” programs that offer price matching on specific parts. Knowing that repair shops have a clear preference for using OEM parts when all other factors are equal, these pricing support programs help the OE dealer remain competitive in the marketplace.

Shops who use a digital parts procurement platform buy more OEM parts in a competitive marketplace are increasing their profitability of parts through the conquest pricing discounts and increasing overall revenue by repairing more cars.

Digital Tools Can Help Maximize Profit on Parts and Increase Shop Throughput

The PartsTrader digital parts procurement platform creates a real-time competitive marketplace for collision repair shops for every part on the estimate. Price matching through the PartsTrader platform’s unique Quote Selection Tool allows repair shops to reap the benefits of price matching and improve their bottom line.

Price matching on PartsTrader allows repair shops to use more OEM parts by reducing the OEM buy price through manufacturer conquest pricing programs. By competitively writing estimates and putting them out for quote on the PartsTrader marketplace, repair shops can unlock price supported quotes that compete with recycled and aftermarket parts also quoted on the PartsTrader marketplace.

With a one-of-a-kind integration with CollisionLink®, the repair shop that uses the PartsTrader digital parts procurement platform gains access to the manufacturer price support programs of 21 major makers across the US that help dealers compete with alternative parts suppliers. By price matching their list price using PartsTrader’s Quote Selection Tool, shops pass part cost savings along to insurance carriers, again strengthening their DRP relations and winning more business.

Additionally, while maximizing the shop’s choices, the CollisionLink integration also ensures the right parts are selected for the repair by scrubbing the parts list against manufacturer build data. This process is called VIN verification and is accessed at no cost to repair shops who use the PartsTrader digital parts procurement platform.

CollisionLink® is a trademark of OEC®.

PartsTrader Team - AUTHOR