Gold says they measure a buyer’s effectiveness by tracking the number of bids Vs wins daily as a means to give buyers an idea of “success” rates or overall team wins for the day. On a daily basis, they measure the number of bids, number of wins and the number of auctions written up. He says it’s important to give buyers an incentive to achieve the desired results. “It is important to find a solid incentive program for buyers to properly pay them on quality and volume of vehicles (as required based on goals set) as well as find a structure that works to keep the company on track to hit overall production and sales goals,” he said. “In conjunction with incentive programs, we must also monitor buyers to see how the vehicles they purchase actually perform.”

Some criteria that Gold and his team have used to “check” work is listed below, but is not limited to the examples given:

• Parts that they deem good – and are damaged • Parts that they guess wrong on the interchange that are cheaper (and parts that they attribute value to that we are over-stocked on)

• Over-valuing a vehicle based on its ACV (buying dud vehicles that are historically not worth buying)

• Older/higher mileage vehicles that are simply bad buys in the big scheme of things (bondo, rust, issues)

• Vehicles that are hit too hard, by a pole for exam- ple

• Attributing too much miscellaneous • Counting a front end sale when it should really have been broken up for parts

• Attributing a price/anticipated sale to a part that will not, in fact, sell for that amount

• Counting quarter panels of older/inappropriate vehicles

The buyer is critical – what is the criteria for a great buyer?

Gold says they use specific criteria to evaluate the buyer to understand if an employee is a good buyer. “We’ve found seven ways to evaluate a buyer,” said Gold. “In order of importance they are: total projected sales; projected sales vs. actual sales (this ratio must be right on and it must be added to the buyers buying criteria guidelines); gross margin (projected gross margin obviously – we have spot checked this before and penalized accordingly). This is the difference between what you paid for

May-June 2015 | Automotive Recycling 35