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Is inventory important to the auto parts business?

For many years, with the growing auto aftermarket volume and rapid development each year, the entire industry is showing a booming trend. Many auto parts companies are getting bigger and bigger, but many auto parts people say that the business is growing. Money is also made every year, but there is no money on the books, and all new goods are stored in the warehouse. Our company stocks BMW LED angel eyes, BMW ballast, Benz ballast, Porsche ballast, BMW LED turn light, BMW control module, BMW driver computer, and we can ship them for you at any time. Reduce your financial burden.

The longer the service life of most auto parts, the more stocks they have. The more it rolls like a snowball, the heavier the inventory pressure has become a burden on the old generation auto parts manufacturers. Some of the long-term accumulated inventory has been aged, some have been damaged, and some have even been eliminated, so it is even more difficult to replace these backlogs with cash.


Benz BMW Porsche LED angel eyes


Therefore, controlling inventory is the key to profitability.


Nowadays, most automobile manufacturing enterprises are in transition, old models are gradually being phased out, new models are being launched quickly, domestic auto update periods are getting shorter, brand models are getting more and more, and the quality of parts production is getting better. For auto parts operators now, the inventory turnover rate will become lower and lower. Our industry is also transforming. Some large and medium-sized auto parts distribution companies with strength and vision are optimizing the capital structure. Through the integration of various resources, stripping the burden of inventory, and liberating pressure to achieve rapid expansion and occupy the market.

In a sense, the auto parts business is not the more investment, the more money it earns; but in turn, the more you control the inventory, the more you invest and the more you lose.

Therefore, controlling our own inventory to achieve reasonable and accurate stock preparation, including positioning of brand models, positioning of variety specifications, positioning of quantity and origin, has become a good job we must do now.


BMW control module


To control the inventory structure of auto parts, we have the following suggestions:

I. Targeted stocking

Distinguish common parts, general parts, seasonal parts and cold parts

Within the sales scope of this region, do meticulous market research to truly understand the model features and consumer groups of social vehicles. Understand the consumption habits of consumer groups, the purchasing habits and characteristics of end customers. Requirements and standards for end customers and consumers. To achieve a comprehensive range of targeted fine preparation of product categories, grades, models, etc.

2.  Grasp the purchase and inventory quantity

Based on the past sales data, we sort out and analyze the customer's purchase rule, purchase quantity, purchase cycle, growth rate and other data to formulate and adjust the amount of stock and purchase.

Don't greet the supplier with a cheap price for temporary promotion and excessive stocking or blindly buying in large quantities according to the general sales experience.

We also need to know that there is still such a rule in the auto parts business. Often, 20-30% of the goods in the inventory can bring you 70-80% of the profit. Therefore, we should spend 70-80% of the energy to do the 20 —Maximize profits by purchasing and replenishing 30% of the goods.

3. Purchase according to customer needs and market rules

As an operator, you must not be blinded by the market and temporary demand illusions and uncertain customer needs. Do not let the manufacturers "fool" because of the lucrative demand, and purchase seasonally adjusted prices and promotional items carefully. We should follow the rules of the market and the principle of customer demand for stocking, avoid a large backlog of so-called promotional items, and increase our capital pressure.

4. Accurately formulate the procurement replenishment cycle and rationally arrange the inventory structure

There is a cycle for each store's purchase. The operator must determine according to the characteristics of its own sales cycle and capital cycle. The purchase cycle is too long, and the shortage rate may be higher. If the purchase cycle is too short, it will cause a single item inventory. The amount increases.

And it is impossible to replenish each part at the most suitable time, which depends on the level of rationality of your usual work skills and inventory structure.

We said that doing auto parts is to make a difference, and the profits on the books are easy to achieve, but it is difficult to truly convert the profits into cash, and it is even more difficult for you to spend money in the auto parts warehouse to invest or change careers.

Now some wise auto parts bosses have realized this, and they are all exploring ways to reduce inventory pressure and reduce unsold stocks. Some have expanded their customer market and diluted inventory pressure through complementary advantages and resource integration.


porsche headlight control module


Others seek joint ventures with peer companies with strong and standardized management to gradually digest and improve the structure of their inventory.

At this stage, the amount of auto parts is large, but the competition is also intensifying. How to make greater use of the money and achieve greater output is a problem that every auto parts supplier should consider. A healthy inventory structure will Directly affect subsequent operating results. Therefore, at this stage we should pay attention to inventory management and improve and optimize the inventory structure.

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