RV PRO

January '20

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rv-pro.com January 2020 • RV PRO • 11 buying behavior. N o t a b l y, b o t h of these surveys suggest that con- sumers really value the RV dealership as an expert and will be happy to buy from them if added at the point of sale. Mike Keller, president Keller Marine and RV (RV parts distributor) Prep Your Dealership for an Uncertain New Year With this good economic cycle long in the tooth, we all know at some point we are due for a soft market again. Even the rosiest prediction for RV sales in 2020 is slight growth over 2019. So, how do you keep your foot on the gas but get ready for a soft market at the same time? Here are three tips: 1) Plan to make at least 5 to 6 percent plus net at your current volume. If you can't make it work, it may mean you are in the wrong place on the plateau map. Make the needed changes now. 2) If you want to increase volume in 2020, don't assume it is going to come from a rising market. Instead, figure out exactly where that volume is going to come from – which product is going to increase market share and how are you going to do that. 3) Clean up your balance sheet. If you have had strong nets and your balance sheet looks good on paper, make sure it is really good! Write down old parts, chase down any outstanding re c e i va b l e s a n d write them off if needed, re-book a n y a g e d u s e d , and make sure any aged new inventory is correctly valued. John Spader, president Spader Business Management Follow the '80/20 Rule' for Your Parts Operation In 1896, Italian economist Vilfredo Pareto identified this relationship between effects and causes. Also known as the "law of the vital few", this relationship identified that approxi- mately 80 percent of the effects derive from approximately 20 percent of the causes. Extrapolated for parts inventory per- formance, this could state that "approx- imately 80 percent of the income is gen- erated by approximately 20 percent of the part numbers." In my career as a parts manager, I determined that about 90 percent of the income in my parts departments was gen- erated by about 17 percent of the part numbers. Looking at your parts operation and applying 20/20 vision, what are the answers to each of these questions? • In your parts department, which are the "vital few" that generate the majority of the income? • For what percentage of total part numbers do these "vital few" account? • What is the current stock level of each of these "vital few" items? • Conversely, what is the cur- rent stock level of each of the remaining items? • After reviewing the answers to these previous questions, what changes might you need to make with your parts inventory? Mel Selway, president P.A.R.T.S. Inc. (consulting and training firm)

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