by scotstrong » Mon Mar 28, 2005 3:33 pm
Did this consultant also advise your GM that along with an increase in wholesale business comes an increase in bad debts and an increase in obsolescence? These are cold, hard facts that go with the territory. As johnny o stated, you are usually just taking someone else's customers. These would be the same dealers that you probably upon occasion need to purchase a part from for your own shop or for one of your customers; how is stealing their customers going to affect this relationship? Also, the customers who are willing to switch are usually the ones you don't really want anyway -- high return rate, credit deadbeats, n.s.f. checks, never know what they really want, and on and on. If you are in a market that is already saturated with wholesaling dealers of your carline, what are you going to offer that the others do not to create an incentive for any particular customer to make a change? If it is merely a larger discount, I would strongly suggest that you determine if you are already losing money on wholesale (based on your own dept's expense structure; not some arbitrary industry 'standard'). If you would like to e-mail me, I can provide you with a formula to make this calculation. Larger discounts are only going to make this number go backwards; so you need to know where you are currently first. You can then show this info to the GM and ask "Is this really a good idea?"
Scot Strong