This month I’m going to address something that’s not only important for running a successful dealership, but is even more important once you start selling online. Your shop’s systems and processes need to be in as close to perfect working order as possible.
That means that your inventory counts and locations need to be highly accurate. Your dealer management system needs to be up-to-date, stable, and efficient. You need to have efficient systems and processes in place for shipping and receiving (I touched on some of that from a personnel standpoint last month). In short, if you have intentions of creating a successful, high volume e-commerce operation, you need to make sure your systems can handle it.
Now I know that all of you reading this article have 100% inventory accuracy in terms of count and location, right? No? Well, if you’re not in the mid to high 90% of inventory accuracy, you’re going to want to look into getting that fixed. Do an accurate physical inventory, institute regular and rigorous cycle counts, and establish processes and systems that will keep your inventory accurate. Failure to do so will lead to a lot of problems once you start dealing with hundreds of orders a day.
The main problem is that it will kill the productivity of the person processing your orders. They will be forced to run all over your shop looking for stuff your DMS says is in stock. If they don’t do a physical verification of each part before communicating to your customer the availability status, you run the risk of telling your customers the stuff is on its way, when in fact you don’t really have it to ship. You also run the flip side risk. Your system says you don’t have Product X, so the person processing orders places Product X on order with your supplier to fulfill a customer’s requirement. The problem is that you actually have a pallet of fifty Product X’s in back that have not been entered into your DMS. Oh, and Product X costs $300. Say hello to massive inventory risk and write-offs!
The next aspect of inventory is to make sure that it’s organized and accessible to the person processing the orders. If your count and location is accurate, but the location is “the pile in the back corner of the upstairs storage area behind the pile of old bike frames” that’s not going to help increase order processing efficiency is it? You may need to look into upgrading or even buying inventory storage systems like shelves, bins, racks, etc. if you aren’t properly set up for maximum efficiency.
To summarize this point: accurate, organized, and accessible inventory is critical to efficient and accurate order processing. Failure to have efficient and accurate order processing will result in poor customer service, which will of course eventually lead to lower revenue and profit from your online operations.
The next big piece is the link between your e-commerce system and your dealer management (DMS) or point of sale system (POS). The best case scenario would be an efficient and automatic link between the online system and the system in your shop. I’m going to assume that you are at least at a level above dog-eared 3×5 cards and an abacus but below a system with fully autonomous and self-aware robots linked to your e-commerce system.
The odds are pretty good that you are using a terminal based system operating through emulators running on PCs. The lowest level of elegance would be to have a person physically read the incoming orders, and then physically re-enter the order information into your DMS or POS system. That may be totally adequate while you are just starting out and order volumes are low. However, let’s assume that you grow and are now dealing with a hundred orders a day. That’s really going to strain the typing ability of even your best parts clerk. At this point, you’re going to want to look into technology that will automate some of the repetition of taking order information and getting it into the DMS/POS system. This can be simple middle-ware or macro scripting technology that takes data from one window and dumps it into another window. The next step is a little beyond the scope of this column, but it would involve custom coding a real-time link between your DMS/POS system and your e-commerce system. If you are thinking of upgrading your DMS/POS system, don’t forget to make sure that it is based on an open and easily customizable platform to allow for future growth!
Next month I’ll address some key aspects of providing customer service when selling online.
Tags:Column, DealerNews, dealerships, E-Commerce, ecommerce, internet, motorcycle, powersports, selling-online
