...Monteleone is paying premium prices, which impacts his bottom line.
“From our neighboring dealerships, the going rate charge is cost plus 15%, which is a premium price and a little steep,” he said. “If you’re selling the part to one of our wholesale shop customers, we’re already giving them a deep discount. So, we are taking a real beating on those orders and selling those parts at a loss. Serving the customer is our priority here, and this is one of the realities we have to deal with.”
In today’s wholesale parts world, the contenders are separating themselves from the pretenders, a trend that will continue, Monteleone said.
“The differences between a parts manager who is a strong retailer and focusing on profitability versus someone who is slinging a lot of paper to sell at a high volume are becoming more and more evident," he said. "We definitely want to be on the right side of this and that’s why we work so hard to be keep our wholesale customers happy while being profitable overall.”
What’s the solution?
“I can buy the parts from Walmart and make more money, so that’s what I did,” he said. “I made a big purchase and when my factory rep came in for a visit, she was surprised and a little perplexed to see a wall of parts I bought at Walmart. I told her I won’t be buying certain parts from you anymore because I can get them cheaper at Walmart. She didn’t know what to say! I originally discovered this a few years back in Florida and the same thing is happening now in Texas.”
Right now, Walmart isn’t retailing crash parts and is focusing on marketing DIY types of parts. But no one would be surprised if this trend could gain momentum in some states to the point where certain collision parts and products could be undercut by large retailers.
“The OE wants to cut out the middle man and eliminate the jobbers, to be honest,” Monteleone said. “They all want to go direct and that’s why they’ve done things like cutting their return allowances in half, for example. Why are we selling our parts at a deep discount while the manufacturers have decided to work with Walmart? It makes no sense.”
Ed Attanasio