Retail Efficiency S
ince 2008, Dimitri Gerontis has seen a lot of growth in the u-pull-it industry. As the owner of S3 Software Solutions, the brains behind CRUSH™ – the comprehensive management software system for the self-service auto
recycling industry – he travels the country consulting with facility owners and managers who have existing u-pull-it businesses or are looking to create one. The CRUSH software has built-in features for stand-alone self-service models, and also hybrid yards. The software is utilized by about 175 yards to handle their POS and inventory management services. “What we are seeing is that many auto
recyclers are either transitioning to self- service from the full-service industry, or opening a new self-serve business,” says Gerontis. “Another popular trend is to incorporate a hybrid model in their full-service business, by running both businesses out of the same sales area. We are also seeing people create very niche self-service yards, such as premiums, trucks, etc. But, the most popular trend is the idea of melding together full- and self-service.” “We have seen owners working to create self-service business models for a long time now,” says Gerontis. “The market is getting more difficult to navigate, margins are tighter, the regulations around full-service are more costly, and the competition is steeper. The movement toward u-pull-it makes sense, in that it takes less-skilled labor, the cost of goods is cheaper … it’s just a less complicated business model. The key is that they are not looking at this as a short-term fix, but more of a shift in the business model.” The days of “just stick it out there” are long gone, Gerontis says. He suggests that operators need to understand the inventory that is available and their product mix and how they should reflect each other. Using data analytics operators can make great decisions based on the all of the data gathered from their YMS system. “Making the customer experience as friendly as possible and giving them some type of appreciation for being loyal is a good mechanism to gather the data to forecast the effects of the change operators are applying.” While there are many ways to create a hybrid facility, Gerontis says separating the yards into two businesses is the most successful model he has seen, where you can make and monitor adjustments as you go. “The nature of customer, cost of doing business, and inventory acquisition is just so different between the two, having them separate is best.” With that said, one place a hybrid model may thrive best is in demographically smaller markets. “This is where a hybrid can be most successful – because it allows you to service more customers, and adds dollars to the bottom line.” “We have seen full-service/self-service operators buy all the inventory they can, just buying anything. Then they run the vehicles through full-service YMS for profitability to then choose which yard it goes to,” he says. “We have seen full- service operators placing cars on the self-service side to get extra life from the car before crushing.” “My best advice is you must focus on 3-4 major components that the self-service business needs to do in your market, and do it well,” says Gerontis. “You should have a clean and organized retail area, robust processing and de-pollution area, completely understand the demographic of where you are operating, including the vehicles that are available to your population. Lastly, access your competition and look for opportunities or gaps in product you can fit in.”
What we are seeing is that many auto recyclers are either transitioning to self-serve from the full-service industry, or opening a new self-serve business.
42 // March-April 2019
Regardless of full- or self-service business model, establishing a professional, organized and efficient business is an important foundation to lay for success, as seen at CTV, Inc.
It is important to not run your self-service operation as a side business. Setting it up this way prevents the business from becoming stagnant over time. It also allows it to grow at its own pace and continue growth with the right metrics you develop in place.”
“Spend time tracking numbers on profit and loss to confirm the information that is being reported is correct,” says Cox. “This allows you to make decisions based on facts, not daily feelings and observations only.” “Williamson location is a self-service-only facility, as is
Bath,” says Wilbert. “Wilbert’s operates two late-model full-service operations, as well. While they share owner- ship, they are under separate management and account- ability as a viable business. Our advice to other self-ser- vice recyclers to monitor their success: Create a budget and utilize it. Review it weekly, monthly, quarterly, annu- ally, however often you feel necessary for your operation. Stay focused on your main priority.” Taking advantage of all profit-centers is important to profitability. In the scrap side of auto recycling, CTV Pik- A-Part processes 600 cars a month, with 60-90 day turn rate. “We have heavy equipment on site, such as crushers, balers and dismantlers, and pull all the wires, like the copper, and sell each commodity separately. This is the new trend in scrap profitability, and we take advantage of any trend that boosts the bottom line,” says Cox. At Wilbert’s, “We rotate inventory every 90-120 days, depending on section of vehicles. The ELVs ready for crushing are dismantled with a Kobelco nibbler prior to crushing.”
“Ultimately, both full- and self-service need good man- agement and data to remain on top of the game and max- imize profits,” says Lieberman.
Automotive Recycling