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Ted4parts

Tradition vs. Technology in Auto Recycling

Since Chad Counselman, (now Global Sales and Operations Manager of Auto PARTnered Solutions), sold his auto recycling business two years ago, he has seen many changes in the industry, particularly when it comes to the transition of using new technologies in family-run auto recycling businesses. He provides Auto Recycling World with his insight into tradition vs. technology.

 

Tradition vs. Technology in Auto Recycling p
Chad Counselman

If a family-run, small business survives long enough, the reality of generational transition must be faced and worked through. Since selling my facility in 2019, I have had the opportunity to work with hundreds of recyclers from all over the world – and I have seen a wide variety of effects of generational transition in almost every operation. I’ve seen patriarchs that have refused to ‘hand over the reins’. I have also seen the incoming generation ‘drop the ball’ and cause the business to fail. I could write for days about issues that exist in family-run businesses, but today’s article is going to be focussed on the adoption of technology during generational shifts. 

The Automotive Recycling Industry has been a very lucrative segment of the overall automotive industry for well over a century. It has not required a lot of education, ability, or technology in order to provide an acceptable income for many generations. A strong work ethic has been all that has been required to be successful until recent years. Over the past 15-20 years, the industry has seen so many software solutions developed and introduced that I could not count them all if I tried. Some recyclers were early adopters of many technologies. Others have just sat back and allowed the industry changes to pass them by – this segment is who I would like to target today.  

As an industry, our customers have changed in the past 20 years. We now see younger and younger repairers that are in need of parts to repair vehicles. Much of the front-line workforce at the repair facilities have been raised with a phone or tablet in their hand 24/7. They have learned to communicate with friends and colleagues through electronic methods. Many of them are even afraid to talk on the phone – and these people have the responsibility to order the parts needed to enable a repair. My main question for you: What can you do to sell parts to a customer that does not want to talk on the phone? You MUST communicate with THEIR desired method – you must embrace technology to overcome this issue.     

The lingering power of tradition must be cast aside and recyclers must embrace technology or they will fail. How can a fellow recycler pay so much more than you are willing to pay for a vehicle at the auction? He knows something that you do not know. He knows what is needed and how to sell it to the people that need it – and probably at a much higher price than you could imagine.  

In January 2021, a small yard asked me to come onsite and help them develop a plan to help save the business. It was a family business that was in the middle of a generational transition – that was still doing things the way they were being done 25 years ago. No data sharing. No bidding tool. No trading partners. Not many wholesale accounts. Still only buying cars off the street. Monthly sales were low and the elder generation was very hesitant of a ‘young guy’ coming in with ‘crazy ideas’.

However, everyone reluctantly accepted my challenge to implement a 5-page report that was full of needed changes to turn the business around. Six months have passed since that original visit and that facility is now using a bidding tool to buy cars, sharing data with hundreds of potential customers, trading parts with 12 other recyclers, and supplementing his auction-buying with a couple of vehicles off the street each week. What has happened to his sales numbers? You guessed it: 300% increase in 6 months. That’s right, he is now selling 4 times what he was selling before the changes.  

The time has come to spend a little money per month and ask several of the software companies in our industry to help you share your inventory with the people that need to buy it – in a way that they want to see it. Let me be more direct: your inventory must show up inside the estimate-writing platform that the body shops and garages use. I’m not going to name all of the businesses that can help you do this, but they are at our trade shows and advertising their services to you on a regular basis. It’s time to change.

If you would like to contact Chad, email him at Chad@AutoPARTneredSolutions.com

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