Stocking Brake Pads

[SACTO AUTO]

Hello there.........

 

This is my first post and I wanted start by thanking you all for the wealth of information and insight available through this forum. I hope that eventually I'm be able to share some of my own insight with fellow members.

 

I have a quick question regarding stocking inventory and I apologize in advance if this has been covered in previous posts (I tried searching but was unable to find any answers to my specific question).

 

Ill try to be brief:

 

We've been in the business for roughly a year and a half and it seems I've hit a brick wall when it comes to controlling COGS. We are doing quite a bit of brake work, so I'm going to start by focusing on the profitablility of that service. I've recieved pricing from a few different vendors for brake pads and it looks like I could save anywhere from $5 - $20 per set if I buy in bulk. It has been suggested that I need to carry around 100 SKUs to achieve a respectable rate of coverage. Does anyone have any thoughts on this topic? I realize the vastness of brake part applications on todays vehicles, so my assumption has always been that this is a fools errand. However, if im able to sell a job based on the availability of parts and speed of service, while at the same time achieving lower COGS, its a win win. The pads we currently install meet or exceed OE and I have no intention of trying to expand margins by installing a lower grade pad. This is simply out of the question. Any thoughts or suggestions would be greatly appreciated.

 

Thank so much!

 

 

Edited January 22, 2014 by SACTO AUTO

[mspecperformance]

Do you have actual numbers on how many brake jobs are sold? What car makes and models? Average time you wait for deliveries? What your expected turn over rate is on stocked parts?

[CARMandP]

Unless you can get the pads in your stock on consignment, I wouldn't stock them. If you stock them it means you put the money out yourself and you have investment tied up in something that might not move. I stock almost nothing because I have two auto part stores within a mile of my shop. Like was mentioned above unless you know exact numbers you sell on a regular basis I wouldn't do it.

[mmotley]

I agree with both the comments above. I once considered stocking brake pads, and I only work on Toyota/Lexus/Scion... There are still too many variables to offset the cost of stocking pads.

[Joe Marconi]

Great post!

 

I agree with the comments too. We do a lot of brake jobs also, and on a lot of car lines. In the early 80s it was easy: Ford, GM and Chrslyer. So we stocked pads. There are too many numbers now.

 

Do your research and get the best deal on quaility parts from a supplier you have confidence in. Brakes are a great profit center.

 

Let the parts house carry the inventory, keep the cash flow in your pocket.

 

Don't look at COGs aquisition only, also look at the money sitting on the shelf. When you factor that, it makes a difference.

 

Understand your margins and insure that all jobs are generating a profit.

 

Best of luck to you, keep us posted.

[5 Star Auto Spa]

We currently are in a stocking program for brake pads with Advance Auto Parts. We only have to stock 10 sets of brake pads though and all of the brake pads we purchase from them for any type of vehicle is a set price. For us, this makes it easier to have a set price for brake service for almost every make and model. I think if we were required to stock 100 sets, we would not have done it as that is way to many.

 

[ncautoshop]

We've got stocking prices but we're not stocking anything. A good rep makes all the difference!

 

Sent from my SCH-I605 using Tapatalk 2

 

 

[5 Star Auto Spa]

And here we thought we had it good just stocking 10 sets. Thanks a lot NCAUTOSHOP...haha...j/k. Might have to inquire about that with our rep!

[xrac]

As a Car-x franchisee I have the ability to buy directly from Raybestos. We stocked brake parts for a number of years including hoses, hardware, pads, rotors, shoes, drums, and calipers. We purchased brake parts by the skid delivered by truck. You will find it hard to have the right parts in stock as usage constantly changes and you will find yourself with a lot of dead inventory on the shelf. After about 7 years I figured out that the cost savings didn't justify the extra cost spent in the overhead, shrinkage, and inventory management. We currently have limited inventory on consignment from a vendor.

[RyanGMW]

Welcome Sacto.... I'm not far away up in Auburn...

We do just euro cars. Even still there are tons of options. I stock about 8 sets of pads for cars we work on often. It doesn't really benefit us that much, we get worldpac 4x a day so we can still have a car out in 2-3 hours by ordering in.

I would say keep your inventory down as low as possible. You may pay a little more, but that's the cost of doing business on someone else's money. Say you hve 10 sets that never sell. You won't get your money back, and then you will be annoyed that you selected those pads to stock... Just not worth it.

[SACTO AUTO]

My apologies for the late response....Ive been having issues logging into the site ??? Worked with Mozilla finally.

 

Anyway, WOW!! Thanks to all of you for the comments and great advice! I would agree that only a consignment program would make this worth the effort. In a cost comparison, current vendor vs. alternate vendor SKUs, Id only be saving an avg of $8 - $10 per set which was dissapointing to say the least. Besides, having just started up I feel im still a bit underpriced given the quality of our work and the parts we install. I have no compunction whatsoever in raising prices eventually. Also, I have great service with the current vendor. Delivery times are consistent (15 mins +/-) and so far the pads themselves have performed well (the rotors not so much :/).

 

Love hearing there is profit to be found in brakes. I agree. Now if I could just find more jobs to do in a day!! The greatest challenge of all, right??

 

I am beyond excited to have found this forum. Thanks again.

Edited January 27, 2014 by SACTO AUTO

[alfredauto]

We stock oil and air filters, chemicals and oil. A selection of steel brake lines too. That's about it. The parts stores get here in 10 minutes, I let them carry the inventory. No price difference . I got a free cabinet for stocking oil filters - wow - the convenience makes it worthwhile. Even air filters are crazy , I probably have 300 in stock but if it's not here 99% of the time it won't get sold.