Your Market Growth Potential
A critical aspect of Lexus dealership’s wholesale competitiveness and future success will be their ability to serve the wholesale mechanical repair market. This market, considerably larger than the collision market, provides a tremendous wholesale parts market growth potential and opportunity for Lexus dealers. Capturing wholesale mechanical repair customers means understanding and supporting their business needs, which are somewhat different than those of the collision industry.
Volume vs Dollars
Success in the mechanical repair market is a volume play. While collision repair facilities have larger, higher ticket jobs, mechanical shops have a much higher volume of jobs with quicker turn-around times and use many more parts. Mechanical wholesale profitability comes from capturing more of each Independent Repair Facilities (IRF) daily volume.
Shop Profitability
The better you understand how shops realize profit, the better positioned you are to become their reliable source of wholesale parts. Both collision and mechanical are profit-focused, but how they make that profit differs.
Collision repair facilities depend upon larger jobs, higher labor and shortening the number of days that a vehicle is in the shop. They depend upon a reliable supply of quality parts from their suppliers.
Mechanical shops are higher volume and make their money on parts margins, parts availability and throughput. They rely upon parts availability, fast delivery and healthy margins from their suppliers to help meet their profit goals.
The Need for Speed
A shop’s needs are based upon the repair process, and there is a distinct difference between collision and mechanical repair. Collision repairs are typically less urgent than mechanical repairs. Body repair is more complex and can take days or even weeks to complete. Delivery can be scheduled based on the shop’s repair cycle.
As described in Lexus WIN story “Mechanical Repair Wholesale Pats Market” (link to story #1), mechanical repair is an on-demand business. Part availability and delivery time are one of a mechanical repair shop’s most important factors in parts procurement. Your dealership’s ability to provide true hot-shot delivery service is key to growing your business.
Decision Making
Mechanical repair shops have complete control over what they buy and from whom. Parts availability and fast delivery are crucial to the buying decision. Shops want parts at the ready, meaning they want to place that order as quickly and accurately as possible. They seek suppliers that can deliver on their shop’s reputation for quality and timeliness and will likely pay more for convenience.
Collision shops are influenced by insurance companies that often restrict their preference. Shops understand the indisputable value of using Lexus Genuine Parts, so making customers happy will positively and visually impact collision shops. They must buy the parts that are negotiated between the insurance company and the Lexus owner. While laws vary from state to state, it is important that you understand your state’s laws governing a customer’s right to choose OE parts and counsel your customer regarding their options.
Shared Needs: Quality and Expertise
While a mechanical repair shop’s business needs may vary from those of a collision repair facility, their shared needs of superior quality parts and reliable brand-specific expertise give your dealership a competitive advantage. The quality, fit, and performance of Lexus Genuine Parts is unrivaled. The value of your expertise in ensuring your wholesale customer purchases the right part and all ancillary parts the first time cannot be matched.
Your dealership is uniquely positioned to become your wholesale mechanical repair customer’s reliable source for the highest quality parts and Lexus-specific diagnostic and repair expertise. As each shop’s confidence in your partnership grows, so will your opportunity to capture more market share in this untapped market.
