Through the Eyes Of the Bold, Part 6

Today, I will continue with some more ideas about body stocking mix. Yesterday, I showed 3 dealers and what mix of bodies they were stocking. The mixes were not as effective as they could be. All three dealers had some categories with zero and zero is very ineffective. Some had a very high percentage of one body line. Also ineffective. Why is it ineffective? Because it does not represent what the market is, so I predict that there are sales being missed. Not good in any market.

Over the years, I have developed a good rule of thumb for dealers and I have helped dealers in the last four years to learn and understand the system so they can be as effective as possible as they learn to grow in their success. I will share it with you here:

  • Contractor Body 10-15%
  • Combo Body 5-10%
  • Flatbed 20-30%
  • Service Bodies 30-45%
  • Plumber Bodies 5-10%
  • Van Bodies 15-25%
  • Dumps 5-10%
  • Other Bodies 5-10%

This formula has worked very well. The variance in the percentage is the variance from one market to the next. For example, in the Central Valley in California, it tends to be a higher number for Flatbeds and the lower number for Service bodies. In the northern areas, it is the opposite. The variance is relatively small though, so from yesterday's post we showed one dealer with 8 Contractor bodies which was 32% of inventory. It would be extremely odd to have the variance go that far over the 15% upper end in my formula. Chances are really good that these Contractors will remain in stock past the free flooring limit. That is not effective.

Service bodies have a higher percentage for a few reasons. One, there are so many different models to cover the market. Stock a 3/4-ton single rear price leader Service body, a 350 single rear super cab gas & diesel, regular cab diesel, regular cab gas, a dually 9' gas, dually 11' gas, 450 11' diesel and that is minimal coverage, but already we are up to eight units. The second reason is that there are so many businesses that use Service bodies that the market for them is much larger. You can test this yourself, by keeping track of the bodies you see on the road over a period of time. You will see more Service bodies than anything else. Flatbeds will be number two, I'm sure. Also, when it comes to Service bodies, you need to pay a good deal of attention to the mix so we continue to cover the bases needed.

Having consulted with a number of dealers over a long period of time, I can tell you that this formula produces results and helps a dealer to know how to maintain a commercial inventory that makes sense in the marketplace. It is a tool that makes sense of a complicated commercial marketplace. I didn't say perfect, but it works very well.

You can go outside of the percentage mix in the case of a special promotion, but I highly recommend that it is excess inventory, but not taking from another line to make up the difference and certainly not let levels drop to zero. Having nothing to show is not good.

When a dealer wants to expand sales even more, we need to bump up the Other bodies percentage to increase the unique bodies to create new opportunities as I discussed yesterday. At some point, I would expect this category to go to about 25% and that would be very effective. Most need to develop confidence first and that is why it is 5-10% in the formula to begin with.

So, here is a great place to start to strategize your inventory stocking with a proven formula that makes sense to dealers and is designed to cover the market effectively but keep flooring costs under control.

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