Running an auto or tire shop is hard work, and it can be easy to let tasks that seem unimportant fall by the wayside. One example of these tasks is part core management, which is certainly understandable. After all, part cores are only used parts–does it truly matter if your shop isn’t carefully tracking them?
Tracking part cores matters more than you might think. When you neglect core management, it can quickly become a “leaky bucket” and cause problems for your shop’s books. On the other hand, if you do an excellent job of tracking your part cores, you won’t just avoid these issues–you’ll be able to transform them into an extra source of income.
Establish a Revenue Stream
There are two different kinds of part cores: “inherent” and “dirty” cores. Inherent cores are the cores “inherent” in parts that people have not used before. Meanwhile, dirty cores are precisely what they sound like–that is, the cores associated with used parts your customers remove from their equipment and bring back to your shop.
Vendors sell some parts with “core charges” added to their price. When you send these dirty cores back to the vendor, they will partially or fully refund this core charge as an incentive for returning the used part. Then, the part is refurbished or recycled by the vendor. By prioritizing the part core return process, you can turn these refunds into a reliable secondary source of revenue.
Price Them to Be Profitable
Creating invoices for parts with cores isn’t quite as simple as you might think. Instead of putting the cost for a part on one line, you’ll need three:
- A line for the price of the part itself
- A line for the price of the inherent core
- A line for the dirty core credit
By structuring your invoices like this, you’ll be able to factor in the condition of your used parts when they come back. For example, let’s say you sell a part for $200 with a core charge of $50. If the customer returned this part right away and in perfect shape, you’d give them the total $50 credit. But vendors pay less for parts that have heavy wear and tear, so if the customer returned it in poor condition, you could give them a lower credit as a result.
This invoicing method can help you ensure you’ll turn a profit on cores, no matter what shape they’re in when they come back.
Treat Them Like Other Parts
At many auto shops, part cores are considered a waste of space. When you’re building a strategy for maximizing revenue from these used parts, though, you’ll need to transform your thinking on this topic.
As part of this, you should create a dedicated space for part cores instead of tossing them into any shelf or closet with extra room. Set aside a secure area in your shop where you can safely store these parts. If you’ve got space, it’s a great idea to set up this space in your parts room since your part cores will be highly visible and secure there. Be sure to put one of your employees in charge of core management, too!
Send Them Back Immediately
Now that you’ve created a space especially for your part cores, you might feel like it’s okay to let them sit there for a while but don’t. If you keep dirty cores lying around for too long, their value might start to drop. Plus, the sooner you return your cores, the sooner you’ll get paid for them. Your best bet is setting up and sticking to a schedule for part core returns.
Create Guidelines
Managing part cores is a team effort. If everyone at your shop knows the rules surrounding part cores, you’ll have a much easier time keeping them in place and getting them sent back on time.
Consider adopting part core guidelines like these at your tire or auto shop:
- Don’t issue core credits until you physically have the parts they’re associated with
- Use the same rules your vendors do when tracking cores sold to customers
- Never repurchase cores that have been sold back
- Avoid over-returning cores to vendors or re-sending cores you’ve already sent them
Track Them
When you’re taking management of part cores seriously, a reliable tracking system is essential. Some shops try to track their cores with spreadsheets or pen and paper, but the job can quickly become overwhelming and disorganized. Part core tracking requires you to keep track of separate values for inherent cores, dirty cores, and the parts themselves–and if you fail to track any of these values at any step in the process, you’ll have trouble getting the refunds you deserve.
Instead, you may want to use a computer system with tracking and reporting capabilities. And that’s where BayIQ comes in.
BayIQ not only offers software that automatically creates reports and dashboards to make tracking easier but also enables you to manage all your marketing efforts in one convenient location. With BayIQ, you can be sure your part core management strategy, marketing campaigns, and management are all working together for the best possible results.
