DealersEdge Professional Forums

We're a 6 store auto group in southeastern PA. We have witnessed a handful of similar sized groups in our area embrace central parts wharehousing.

I'm well aware of the preceived benefits like volume discounts, as well as the potential to earn more return allowance. But when looking at the 30,000 ft. view, weighing the costs & expense of additional everything, including the facility & personnel, what makes this such an attractive idea?

Needless to say, I do not have centralized parts wharehousing but I am very interested in listening to a good argument as to why I should.

What is it that I am completely missing?

The first question is are all the stores the same carline? Manufacturers generally do not allow pooling of orders for multiple dealers to achieve discounts or return reserve. If not the same carline, then where would the combined purchasing benefit come from?

Most dealerships that have gone to some type of centralized warehousing are heavily into the wholesale business; and this definitely can create significant savings by virtue of shared expenses for the warehouse, personnel, and delivery vehicles and drivers.

In absence of this, I struggle to find much significant benefit to doing so.

Scot Strong