Are EBay Sales or Losses?

Brad Bossen
I have to wonder sometimes if the due diligence has been done on these selling decisions. When EBay and Craigslist's became popular with parts departments. They were a great outlet to get rid of "dead stock." Whatever the net profit, it was better than letting it sit on the shelf and collect dust. But that's not the case if you are selling Stock Order parts. Yes you are moving parts and gaining turn advantages. But, to whom are you selling? To the Independent shops who are fixing your customers vehicles? To the individuals who take the parts to the Independents who gladly provide the labor to fix your customers vehicles? Or to one of your own technicians, moonlighting on the weekends? Let's say that sales are good and you're moving a lot of parts. What is the percentage of profit? It certainly is less than your retail price or you wouldn't be selling anything. So, the way that computes, "the more you sell at a discounted rate the lower your overall department GP is reduced", no matter how many parts you sell. Kinda like, "selling below cost, but in volume to make up the difference!" Follow the money a little further. If you're selling discounted parts to Independent shops, and to FIY'ers, what are the labor losses in your own shop? In your market? Has one of your techs ever had to wait on a part because the parts wholesale department mailed out the last one on the shelf; at a discount? Are you not supporting the very Independent shops and FIY customers that you say are the competition. As more and more parts departments increase online Stock Order parts sales, the market becomes more and more saturated, prices reduce and your GP drops even further. Now you've become an online wholesale parts house that continually must raise prices to its own "captive" service department to compensate for the GP losses! Customers are already shopping to save pennies. You'll drive them right down the road to the first Independent shop. History has proven time and time again that if you add up the costs of stocking, payroll, shipping, and all those "indirect" expenses associated with wholesale businesses that it takes A LOT of sales to reflect a real net profit. And at WHAT expense? Look at the BIG picture. A high volume wholesale parts house may find it much more economical to hire a less expensive "computer sales rep" than a manager!

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