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SPOTLIGHT ON EXCELLENCE


“The self-service business is a numbers game these days.”


the company and their peers and encourages per- formance with bonuses for add-on sales like environ- mental fees and warranties.


Manage Your Inventory In the self-service business, “it’s all about inventory


turn,” Grainger says. The key to having what your cus- tomers want is to be able to buy vehicles off the street and at the salvage auctions, he reports. In Cash N Carry’s situation, LKQ’s presence in the same market makes buying challenging because the two compa- nies essentially are competing for the same vehicles. To motivate the buyers to go after sales more aggressively, Cash N Carry has devised a custom pay plan for them. Buyers are rewarded for the number of vehicles they buy and projected revenue. “Projected revenue will tell you how good they are buying vehicles,” Grainger adds. Part of managing inventory is the ability to respond to changes in the economy and the market in a way that maintains profitability, what Grainger calls “keep- ing your finger on the trigger.” That includes know- ing and understanding your business, the competition and the markets, including the steel and non-ferrous markets.


For example, the drop in steel prices translates to lower purchase prices for cars and more expensive parts. The situation has impacted Cash N Carry’s inventory by making it more difficult to buy cars because sellers expect a higher price than the current value of the crushed hulk. Accustomed to getting $400, sellers aren’t eager to sell for half that. As a result, the Grainger’s business model required some tweaking. Over the last few years with strong steel prices, Cash N Carry’s business was divided 60/40 between steel and parts. Now, Grainger has adjusted inventory buying and steel and parts sales to closer to a 50/50 mix.


64 Automotive Recycling | March-April 2015


He has his dismantlers pulling all possible metals from vehicles, and plans to “weather the storm and see how it all shakes out.”


Track Key Metrics In self-service as in any auto recycling operation, it’s


impossible to pay for performance, project revenue, know your inventory turn, change your business model quickly or just about anything else important to the bottom line without measuring. Cash N Carry takes metrics seriously, tracking approximately 80 dif- ferent ones. Some of them are universal in the auto recycling business, but self-service also includes some unique metrics like part sales per car set, dollar sales per customer, percentage of customers buying and average ticket. “The self-service business is a numbers game these days,” Grainger stresses. “To be successful, you must understand the financials and operating metrics.” That includes knowing trends in the scrap, recycling and commodities markets as well as your own sales and operating costs, he adds. All of that information is essential for doing the forecasting and planning that contribute to the business’ success.


Have an Active Internet Presence Forget the do-it-yourself website. Whether you hire


an in-house webmaster or use an outside company as Cash N Carry does to develop and host your site, your site must be professional and search-engine opti- mized.


Cash N Carry boasts a clean, contemporary website that is user-friendly with loads of essential information available from the landing page. Customers can eas- ily search inventory, review parts price lists, or get a quote on selling their vehicle. Information on poli- cies, safety, warranties and the Hollander exchange are just a click away. Promotions, new inventory,


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